New PA Law Allows Greater Control Over Digital Assets
February 4, 2021
By Marilyn Le Lodico
Many of us live a significant portion of our lives in digital realms, whether it is through accessing work files stored on an online platform or connecting with personal or professional contacts through social media applications. As a result, control over an individual’s Digital Assets has become increasingly important.
Digital Assets are electronic records in which an individual has a right or interest and can include email accounts, social media accounts, blogs, online financial accounts, e-commerce accounts (ie. Amazon), streaming platforms (ie. Apple Music, Netflix), cryptocurrency accounts (ie. Bitcoin), cell phone applications, business loyalty program accounts, and any type of electronic record stored on an online platform such as digital photographs, videos, audio recordings, and written documents.
Control over an individual’s Digital Assets held by third party private companies such as Google, Apple and Facebook is largely subject to those companies’ individual policies. Due to the increasing significance of Digital Assets, there has been a growing need to address the problem of accessing a deceased or incapacitated individual’s Digital Assets held by private companies.
A new Pennsylvania law, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), took effect January 19, 2021.
Under RUFADAA, individuals can now empower their agents, trustees, and personal representatives of their estates to access and transfer their Digital Assets, even those held by companies such as Apple, Google or Facebook by including explicit instructions in their Will, Trust or Power of Attorney.
Among its provisions, RUFADAA creates a legal framework for personal representatives of estates, agents, trustees, and guardians to access, manage, and transfer the Digital Assets of deceased and incapacitated individuals, even if held by a third party private company. Prior to RUFADAA’s enactment, compliance with private company policies has been the only mechanism, outside of an order of court, to access a deceased or incapacitated person’s Digital Assets. Under RUFADAA, Pennsylvania residents can have greater control over their Digital Assets, even after death or incapacity.
Updating Your Will and Power of Attorney
Our Estate Practice attorneys can help you prepare a comprehensive estate plan to address your Digital Assets. In order to empower the trusted persons identified under your estate planning documents (ie. a Will, a Power of Attorney, or a Trust) to access to your Digital Assets held by a private company, the estate planning documents must explicitly grant those powers.
As part of your estate planning preparations, we recommend first creating a list of all your Digital Assets, both personal and professional. Next, identify which Digital Assets must be accessed by your executor, agent or trustee after you die or become incapacitated. Then, consider to what extent you wish your executor, agent, or trustee to have access. You may want to avoid certain invasions in your privacy, even after death or incapacity. Are you comfortable giving your executor, agent or trustee access to every email stored on your Gmail account and every photo stored on the iCloud? If you have Digital Assets connected to your professional life, what concerns do you have with regards to Digital Assets containing proprietary, client, customer, or employer information? Is there a risk of harm to someone else if you give access to Digital Assets within your control?
Whether a client should immediately update his or her estate plan in light of the new law depends on the individual client’s needs and circumstances. Please feel free to contact us to discuss. If you possess Digital Assets used to generate income or in connection with your own business, then it may be prudent to consider updating your estate plan as soon as possible. However, if your main concern is online bank accounts or other online financial accounts and you already have estate planning documents or a Transfer on Death (TOD) agreement in place, then there may not be an urgent need to update your estate plan based on this new law. The wealth in those types of financial accounts can likely be accessed by your executor, trustee, agent, or designated transferee without including a grant of access to Digital Assets in your estate planning documents.
Other Digital Asset Planning Measures
Creating a Will, Power of Attorney, or Trust are not the only ways you can plan for the transfer of your Digital Assets. You could consider giving your trusted persons a list of your Digital Assets now, even if your Will, Trust or Power of Attorney is not yet prepared. For certain Digital Assets accounts, you may consider even giving your trusted persons the passwords; however, you will need to seriously weigh the risk associated with disclosing such critical information, whether disclosing the password would be in violation of the online platform’s policies, and what harm could be done to you if the trusted person were to abuse access to your Digital Assets. Certain private companies that operate online platforms, (ie. Google) allow you to direct the company to grant access to a trusted person after a period of inactivity. Utilizing these individual private company services may be helpful for your individual Digital Estate planning purposes. However, before you engage in planning measures that would give someone else access to your Digital Assets, we recommend discussing such plans with your estate attorneys.
As always, we welcome you to give us a call at (412) 338-1100 or send us an email with any questions or concerns about your estate planning or estate administration needs.