New Law on Administration of Digital Assets in New York
Fiduciaries Now Granted Access to Important Data
Following several failed attempts to pass previous versions of the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) in 2013 and 2014, New York has amended its laws to adopt a version of RUFADAA. This amendment adds a new Article 13-A to the New York Estates, Powers and Trusts Law, which is titled “Administration of Digital Assets”. This new legislation provides guidance on how to leave digital assets behind and what powers a fiduciary, such as an executor or trustee, will have to access a person’s digital estate.
With many individuals using electronic means to store personal property, text, images, or banking information, access to such information is very important in administering an estate or a trust. Digital assets can be essential in unlocking other assets or ensuring that the risk of identity theft is minimized.
Due to terms of service by account providers, a fiduciary may find it very difficult to obtain information stored digitally by a deceased person or the creator of a trust. Account providers are also constrained in what information they can release due to federal laws such as the Electronic Computer Privacy Act, the Stored Communications Act, and the Computer Fraud and Abuse Act, which institute penalties for the unauthorized access of digital accounts.
The new law adopted in New York defines holders of online accounts as “users”. Users have various types of digital assets, such as online bank accounts, social media profiles, electronic securities trading accounts, and the like. Users are now given various options to allow fiduciaries to have access to those digital assets.
For example, a user can now create an “online tool” to direct a custodian, such as Google or Facebook, to disclose certain digital assets and/or content of electronic communications to fiduciaries. In the absence of an online tool, a user may still provide such direction in a more traditional manner through a will, trust, or power of attorney. Most importantly, this provision will override a custodian’s service agreement (sometimes known as a clickwrap agreement), which often prohibit third party access to online accounts. Additionally, fiduciaries will be granted a new managerial “power” to access the digital assets of a decedent or incapacitated person in order to administer their estate.
Ultimately, the statute provides methods for disclosures of digital assets to: (1) fiduciaries acting under a will, trust, or power, (2) an executor, administrator, or personal representative of a decedent, (3) a guardian, or (4) a trustee. Depending upon the directions of the user, the fiduciary may only be provided with a catalogue of such e-communications, rather than the actual content thereof. The law will provide default access to other digital assets, even absent a directive from the user. This access will assist in the inventory and marshaling of such assets.
New York now provides options to individuals who would like to preserve digital assets following death or disability and provides tools to those charged with serving as fiduciaries. Given these options and tools, it is important for you to consider your digital afterlife when planning your estate. The experienced professionals at O’Connell and Aronowitz are available to discuss your digital asset estate plan at their office nearest you.
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