Most of us have digital assets whether we know it or not.  Do you have a Facebook or Instagram account with pictures from each of the last five years of family gatherings on Thanksgiving of which you love seeing the yearly memory reminders?  If you’re like me, you’ve got the pictures, but you’ve never printed them out.   You’ve deleted them from your phone to save space and uploaded them to the cloud (hopefully).  What if something happened to you?  How would someone access those memories?

On July 23, 2020, Governor Wolf signed Act 72 of 2020, the Revised Uniform Fiduciary Access to Digital Assets Act (“Act 72”). Act 72 will take effect in 180 days and amends Title 20 of the Pennsylvania statutes relating to decedents, estates and fiduciaries.  Pennsylvania now joins 47 other states which have transfer of digital assets legislation.  The underlying Senate Bill 320 was introduced by Senator Thomas H. Killion, who states that the legislation “will give people the power to plan for the management and disposition of their digital assets in the same way they can make plans for their tangible property:  by providing instructions in a will, trust, or power of attorney.” See Senate Co-Sponsorship Memoranda.

What is a digital asset?

A digital asset is defined under Act 72 as “an electronic record in which an individual has a right or interest.”  Digital assets are a large part of our lives.  Our music, photographs, and online accounts often exist only in the digital world.  They are not printed out or saved anywhere other than the cloud.  Accessing these digital assets can be problematic when a loved one dies or loses competence.

Applicability

Act 72 applies to a fiduciary acting under a will or a power of attorney, a guardianship proceeding, or under a trust executed before, on or after the effective date of Act 72.

Access to digital assets

Access to a digital asset is typically controlled by a terms-of-service agreement for the respective custodian (defined as “a person that carries, maintains, processes, receives or stores a digital asset of a user”).  The terms-of-service agreements are not the same, and some custodians have no provisions.  Some custodians have their own options for digital asset management.  For example, in 2015, Facebook permitted a legacy contact.

A user can use an online tool to direct the custodian to disclose none, some or all of the user’s digital assets, including electronic communications.  However, if the online tool allows a user to modify or delete a direction, that direction regarding disclosure “overrides a contrary direction by a user in a will, trust, power of attorney or other record.”  If there has been no use of an online tool by the user or the custodian has not provided an online tool, then the “user may, in a will, trust, power of attorney or other record, allow or prohibit disclosure to a fiduciary of some or all of the user’s digital assets, including the content of electronic communications sent or received by the user.” Section 3904(b).  The user’s direction under this section overrides a contrary provision in a terms-of-service agreement.

Procedure for disclosing digital assets

The custodian has the sole discretion to give a fiduciary or designated recipient full access, partial access sufficient to perform the tasks needed or provide a copy in a record of any digital asset that the user could have accessed if the user were alive and had full capacity and access to the account.  The custodian may assess a reasonable charge.  Deleted digital assets do not have to be disclosed by the custodian.  If the custodian believes the request or direction is an undue burden, the custodian or fiduciary can seek a court order that may change the disclosure.

Deceased user

If a personal representative of the estate seeks electronic communications or other digital assets of the deceased user, the following must be provided:  written request; certified copy of the death certificate; certified copy of the letters; copy of the will, power of attorney or other record showing consent and the custodian may request some additional information.

Living user

If the agent under a power of attorney seeks electronic communications or other digital assets of the principal, the following must be provided:  written request; an original or copy of the power of attorney expressly granting the agent authority over the electronic communications or other digital assets; a certification by the agent that the power of attorney is in effect and the custodian may request some additional information.

Trust

If the digital assets were held in trust and the trustee is the original user, the custodian shall disclose to the trustee that is an original user any digital asset of the account held in trust and include a catalog and content of electronic communications of the trustee.  The rules vary if the trustee is not the original user.

Fiduciary duties

The same legal duties that are imposed upon a fiduciary managing tangible property apply to management of digital assets, meaning, the duty of care, loyalty and confidentiality.

Custodian compliance and immunity

Custodians shall comply with a proper request to disclose digital assets or terminate an account no later than 60 days after receipt of the required information.  The custodian may notify the user that request for disclosure or termination was made.  A custodian and its officers, employees and agents are immune from liability if the act or omission is done in good faith compliance with this chapter.

What impact does Act 72 have on estate planning?

Act 72 gives direction and authority for fiduciaries to transfer digital assets to beneficiaries upon their death or during life.  Did you list a legacy contact or fill out something under the terms-of-service agreement?  It is important to keep an updated list of places where you may have digital assets, as custodians may require any number associated with the account, username, address or other unique subscriber or account identifier assigned by the custodian along with some type of proof linking the account to the principal.

Estate planning is not a one-size-fits-all or a do-it-yourself process.  Everyone’s situation is different, and many questions need to be asked as part of comprehensive estate planning.  It is important to consult with an experienced estate planning attorney.

 

Marshall, Parker & Weber is open and available to help you assess what documents you may need or whether your current plan is in good shape. Call us at 800-401-4552 to schedule an appointment. You can also check out our portal for complimentary blog articles, videos and webinars.
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