Consideration for Digital Assets In Estate Planning
Digital assets are the new normal. Nearly everyone walks around with a tiny computer in their pocket used to perform everyday tasks, such as banking, parking, grocery shopping, etc. Technology permeates almost all aspects of life in this day and age. Most assets can be accessed through online portals or stored in digital storage. When advising clients, estate planning attorneys and professionals are required to consider how technology is deeply engrained in the eb and flow of society. It begs the question – how do we incorporate digital assets in estate plans? When an individual passes away, how are these assets accessed and distributed?
Ohio passed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2017.[i] As of April 1, 2022, almost all states within the United States have passed some version of this legislation. The RUFADAA gives certain persons the right to access, manage, and distribute a deceased individual’s digital assets after they pass away. Under the RUFADAA, a digital asset is “an electronic record in which an individual has a right or interest”.[ii] This definition includes electronic communication, such as email accounts, and any other record held electronically.
The specific persons mentioned in this statute are agents acting under a power of attorney, personal representatives of an estate, duly appointed guardians of a ward, and trustees acting under an established trust agreement.[iii] However, for estate planning purposes, it is most beneficial that this statute applies to fiduciaries, namely executors, administrators, and trustees. Generally, fiduciaries are employed with legal duties and authorities under the laws of Ohio that specifically apply to managing tangible property. The RUFADAA explicitly allows for those legal duties and authorities to apply to the management of all digital assets as well.
There are a couple of things to keep in mind regarding a fiduciary’s authority under the RUFADAA. The fiduciary’s authority to access and manage digital assets is subject to the applicable terms of service of the digital service provider.[iv] It is possible that certain actions may be permissible under the provisions of the RUFADAA but may not be permissible under the custodian’s terms of service agreement. In addition, the authority bestowed in this statute may not be used to impersonate the deceased.[v] For example, while a fiduciary may be able to access a deceased person’s social media account to deactivate the account or invoke legacy settings, the fiduciary may not use RUFADAA access to post on the social media account in a manner that would appear to be a post written by the deceased individual. Finally, the authority given by the RUFADAA may be limited by the scope of fiduciary duties[vi], whether prescribed by law or document. As a part of modern estate planning, individuals may choose to explicitly include or exclude certain fiduciary powers granted under the RUFADAA.
Digital assets will be a part of modern estate planning for the foreseeable future. We must plan for our digital assets as much as we plan for our physical ones. The concept of digital assets is just one example of an area of evolving law that affects these estate planning considerations and requires time and attention as new evolutions unfold. Does your estate plan incorporate the considerations raised by the RUFADAA?
[i] Ohio Rev. Code §§ 2137.01 et seq. [ii] 2137.01(I) [iii] 2137.02(A) [iv] 2137.14(B)(1) [v] 2137.14(B)(4) [vi] 2137.14(B)(3)