For several years the Uniform Law Commission (the “ULC”), a non-partisan body that conceives model laws addressing legal issues of widespread importance, which legislatures are free to adopt fully or in modified form, has worked on the Uniform Fiduciary Access to Digital Assets Act or “UFADA”. The UFADA is a model state law (the “model act”) that provides fiduciaries with authority to deal with “digital assets”. The final version of the ULC’s work was issued on November 13, 2014. The model act differs from state laws, which often focus on access only by personal representatives of estates, by allowing types of fiduciaries other than personal representatives the same sort of access. The UFADA is not a distribution law, it does not describe who might “inherit” or otherwise transfer digital assets. It deals with records only, not the underlying asset, such as website which “hosts” an electronic record. In addressing the subject of access, the model act treats the fiduciary as if he or she were the account holder. A precursor to the UFADA is the “Stored Communications Act” enacted by Congress in 1986 within the Electronic Communications Privacy Act (the “ECPA”).
The UFADA was drafted to apply to four types of “fiduciaries”: Guardians or “conservators” for disabled persons; agents designated in a power of attorney; executors or personal representatives of estates; and trustees under a trust agreement. Bear in mind that these “default” categories may be modified by a written instrument, such as a will, power of attorney, or trust drafted in compliance with state law. The definitions surrounding the types of fiduciaries are based on those set forth in the Uniform Probate Code.
Because the UFADA seeks to balance access and privacy concerns, it applies only to information contained in an electronic message which is not publicly accessible. Also, because of certain exceptions contained in the federal ECPA, the UFADA does not apply to employers and educational institutions. However, even with such limitations, the UFADA has very broad application to all sorts of electronic communications, including wire, oral, pager, and fund transfers.
Almost every email account would be subject to the terms of the UFADA so long as it was subject to a “terms of service agreement” of any sort. Should that agreement seek to limit access by fiduciaries to the content of the digital account, it may do so only by a provision separate and apart from other terms of the agreement.
According to the drafted model act, a guardian (conservator) may only access digital accounts after a hearing and the issuance of a court order. However, the UFADA allows access by a personal representative unless otherwise ordered by a court or directed by the terms of a will.
A power of attorney must expressly grant an agent authority to access electronic communications. The default provision of the model act is that an agent has the authority to access a digital asset. In other words, the agent, by default, may “view” a digital account but to read the messages contained in that account, the power of attorney must specifically grant such access. The distinction is an attempt by the model act to balance privacy and access to electronic communications.
With respect to trustees, the UFADA divides access into two categories: those in which the trustee is the original account holder and those in which a digital asset is placed in trust by the settlor. In the case of the former, access to digital assets and content of electronic communications is presumed. In the case of the latter, the trustee may only access the content of an electronic communication as authorized by the federal ECPA but is otherwise authorized to access the digital asset. The goal is to differentiate the trustee’s ability to view electronic communications from the trustee’s ability to administratively deal with the digital asset.
A fiduciary having the right to access a digital asset of an account holder may take any action the account holder may lawfully take regarding the digital asset; has, for the purpose of applicable electronic privacy laws, the lawful consent of the account holder for the custodian to divulge the content of an electronic communication to the fiduciary; and for the purpose of computer fraud or computer access laws is considered an “authorized user”.
The following points should be born in mind when contemplating access under the UFADA:
- A fiduciary needing access to a password protected account will generally be granted access by the service provider under the model act.
- If the “terms of service agreement” permit a fiduciary to transfer a digital account, then the account may be transferred in accordance with the agreement, NOT pursuant to the UFADA which only deals with access to, not transfer of, digital assets.
- A fiduciary may receive a “catalogue” of electronic communications from a service provider.
- A fiduciary may view the content of the items in the catalogue only if allowed under the terms of the ECPA.
Fiduciaries with the right to access a digital asset have the right, upon request, to access the asset, control it and obtain a copy of it, subject to copyright law.
Fiduciaries demonstrate their authority by:
- In the case of a personal representative, by a certified copy of letters of appointment or court order;
- In the case of a guardian or conservator, by a certified copy of a court order;
- In the case of an agent, by original or copy of the power of attorney with a certification by the agent under penalty of perjury that the power of attorney is in effect; and
- In the case of a trustee by a certified copy of the trust instrument or a trust certification, described in the model act, that authorizes the trustee to exercise authority over the digital asset. (The model act also deals with issues surrounding demands by the service provider for the trust instrument in spite of the trust certification.)
A custodian must comply with the request for access by a fiduciary within 60 days of receipt of the request’s receipt. Custodians acting in good faith under the model act are granted immunity from liability for failure to comply with the UFADA.
While it is unclear if Maryland will adopt the UFADA in whole or in part in the 2015 legislative session, an earlier “version” of the model act is in effect in Delaware as of January 1, 2015 and it has become the first state to pass adoption.
PK Law Wealth Preservation and Elder Law Attorneys can help draft documents which comply with the UFADA’s concepts and reflect your wishes regarding access to and privacy of digital assets. To contact a PK Law Attorney for additional information or to schedule an appointment click here or go to firstname.lastname@example.org.
This information is provided for general information only. None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.