Email accounts, online banking and investment account access, music, photo and data storage accounts, Facebook, Instagram, Twitter and other social media accounts are all forms of digital assets. On a day-to-day basis, many of us spend more time using these types of assets than the more traditional forms of real and personal property and their contents may have more financial or sentimental value to us than traditional assets. While the law has long provided mechanisms for the management of real and personal property during incapacity and the succession of such assets at death, recently enacted legislation now provides a uniform framework for third-party access to digital assets as well.
The new law distinguishes between a catalogue of electronic communications (i.e., the envelope) and their actual content and establishes default rules regarding third-party access. Under the default rules, executors, trustees and agents under a power of attorney are generally entitled to an account catalogue that identifies certain information regarding electronic communications in the account (e.g., sender, recipient, date, time) but are not afforded access to the actual content of digital files and communications. These default rules can be changed in any of the following three ways:
- Via an online tool offered by the account
provider. An account provider may offer account settings
options which address future access by third
parties. For example, Google and Facebook both
provide an option that permits an account holder to (i) direct that
his or her account be deleted upon his or her death or (ii)
designate an individual to have access to the account at such time
(and specify the extent of such access). An account holder may
modify or delete designations using an online tool at any time.
While helpful, these online tools have important limitations. An
online tool may only permit an account holder to designate named
individuals (rather than whoever is acting in a fiduciary role) and
may require such designated individual to have his or her own
account with the account provider.
- Under a will, trust agreement, power of attorney or
other instrument. If an account holder has not utilized an
online tool, or if the account provider does not offer one, the
account holder's direction in a will, trust, power of attorney
or certain types of other instruments will govern third-party
account access. In the event of both a designation via an online
tool and a contradicting provision of a will, trust, power of
attorney or other instrument, the online tool designation will
control.
- By the terms of a service agreement. If an account holder does not address the issue of third-party account access, the account provider's terms of service agreement will control. Such terms of service agreements allow account providers to (i) determine the extent of account disclosure that will be provided and (ii) require a court order to make any such disclosure. When signing up for a new online account or service, many account holders agree to an account provider's terms of service without reading them, let alone considering or understanding their impact. As a result, the terms of service likely will not reflect an account holder's wishes regarding third-party account access.
Simply keeping a list of login information does not replace the need for a plan, as maintenance of an updated list is unlikely and poses a security risk and, as a legal matter, using a third party's login credentials to access their account without the proper legal authorization may violate federal and state law. In light of the new legislation, it is easier than ever for account holders to provide for appropriate management and succession of their digital accounts. We recommend that you take the following steps:
- Create a list of your online accounts.
Maintain an updated list of accounts you would like a third party
to be able to access in the event of your incapacity or death,
particularly those that require management (e.g., bank
accounts, investment accounts, accounts for paying bills online) or
contain information (including digital photos, video, records,
correspondence, etc.) that you would like to pass on to others.
Keep this list with your important legal and financial
documents.
- Include provisions for your digital assets in your estate plan. Your power of attorney, will and certain types of trusts should be updated to include directions regarding third-party access to and control of your digital assets. In addition, a knowledgeable estate planning attorney can advise whether utilizing available online tools would further or frustrate your digital asset planning objectives.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
