Digital Assets
Presented by Sharon Rivenson Mark, Esq. and Shirley B.
Whitenack, Esq.
Adapted from Presentation by Catherine A. Seal, Esq.
What are digital assets?
• Digital asset” means an electronic record. The term
includes the content of electronic communications.
• Current ULC definition (subject to change)
• There must be a right to use the record in order to be
considered an asset.
Digital Assets
• Includes images, photos, text files and videos.
• May include electronic databases.
• Financial accounts – online banking
• Social Media
• Facebook
• Twitter
• LinkedIn
Digital Assets
• Medical records
• Tax documents
• Music playlists
• Domain name
• Blogs
• Avatars
Digital Assets
• Business records
• Dropbox
• Client information
Tangible or intangible?
• Digital assets are intangible personal property unless
they are printed.
• If they are converted to physical media, i.e., a
photograph, then they are tangible personal
property.
Digital Assets
Does one own the account or the contents of the
account?
Terms of Service Contract
• Used by internet service providers and websites that
store an individual’s personal data
• Governs the relationship between a user and service
provider.
• May include a license agreement and privacy policy.
Terms of Service Contract
• Contract of Adhesion
• No way to opt out
• Who reads TOS Agreements?
Planning for Digital Assets
• Fiduciaries may need access to digital files to fulfill
their obligations
• Lack of access to passwords and online accounts can
make it difficult to
• marshal assets
• file tax returns
• pay bills
Planning for Digital Assets
• Photographs and videos –sentimental value to
beneficiaries
Planning Options
• Provide fiduciary with access
• Designate special fiduciary for digital assets
• Prevent access
Digital Assets Planning for
Incapacity
• Options:
• Give agent under a POA the power to access digital
assets
• Provide passwords
Planning
• Ask client about digital assets
• Discuss ramifications of inability of fiduciary to
access digital assets
Creating an Inventory
• Should attorney ask clients to create list of digital
assets and passwords?
• Need to update list frequently
• Need to tell someone where to find the list.
Access Problems
Voicemail
Home security system
Computers
Smartphones
Financial accounts
Social media sites
Federal Law
• Stored Wire and Electronic Communications and
Transactional Records Access prohibits disclosure of
stored communications without consent of
originator or intended recipient or subscriber.
Federal Law
• Computer Fraud and Abuse Act
• Criminalizes unauthorized access
Access Authorization
• Share digital assets such as photos and videos during
lifetime
• Give fiduciary power to exercise control over digital
assets
•
Fiduciary Access to Digital
Assets
On July 16, 2014, the Uniform Fiduciary Access to
Digital Assets Act (UFADAA) was approved by the
Uniform Law Commission (ULC) at its 123rd Annual
Meeting in Seattle.
The final version of UFADAA provides the access to
digital assets that fiduciaries need to carry out their
duties, while respecting the privacy and intent of the
account holder.
Purpose of FADAA
The purpose of UFADAA is to vest fiduciaries with the
authority to access, control, or copy digital assets, while
respecting the privacy and intent of the account holder.
FADAA Enactment
• Delaware
Types of Fiduciaries
This uniform law address four types of fiduciaries:
(1) personal representatives (also known as executors)
of a deceased person’s estate;
(2) conservators (also known as guardians) for a living
person;
(3) agents acting under a power of attorney; and
(4) trustees of a trust.
FADAA
• Sections 1- 2 General provisions, including
definitions
• Sections 3 – 6 Rights of various fiduciaries
• Section 7 – Fiduciary Authority
• Section 8 – Compliance
• Section 9 – Custodian Immunity
• Sections 10 – 16 Miscellaneous provisions
Section 3
• (a) unless the will prohibits – a personal
representative can obtain the digital assets and
records of electronic communications, including a
log of the communications and the content
Section 4
• Section 4. Control of digital property and access to
communications of protected person by
[conservator]. At hearing on an appointment of or
authority of a [conservator], a court may authorize a
[conservator] to:
Section 4
• obtain the digital assets and records of electronic
communications, including a log of the
communications and the content
Section 4
State law will determine the criteria for when a
court will grant to the conservator the power to
access digital assets of the ward
Section 5
• The authority of an agent under a POA must be
expressly set forth in the POA document and cannot
be prohibited by a governing instrument
Section 5
• Where a power of attorney expressly covers the
content of electronic communications, Section 5
authorizes the agent to access the contents if the
service is permitted to disclose.
Section 6
• Trustee may access digital assets held in the trust
unless otherwise provided by a court or by the terms
of the trust
Section 7
Sets forth fiduciary authority regarding digital assets
Section 8 - Compliance
• Personal representative must show letters
• Conservator must show copy of order giving
authority over digital assets or electronic
communication
• Agent must show copy of power of attorney that
authorizes the agent to exercise authority over digital
assets or electronic communication
• Trustee must show copy of trust instrument or
certification of trust
Section 8 Compliance
• If fiduciary produces necessary authority to
custodian or account holder, custodian must comply
• Custodian has 60 days to comply, or fiduciary may
apply to court for order directing compliance
Section 9 – Custodian
Immunity
• Custodians are immune from liability for any action
done in compliance with the act