Electronic Estate Law: New Account Access Proposal

By Ephrat Livni, Esq. on March 03, 2016 | Last updated on March 21, 2019

We used to write things down on paper, including our estate plans. That wasn't super secure -- documents erode, get lost, or are destroyed. But now we conduct much of our personal business electronically and there is a new complication, providing fiduciaries access to digital assets while maintaining user privacy.

There is a proposed solution, however: a uniform approach to electronic account access across the country -- one that protects privacy -- known as the Revised Fiduciary Access to Digital Assets Act (RFADAA). Nearly half of the states are now considering passing the legislation, so let's ignore the unwieldy name and consider what is being proposed. This is about people rifling through our electronic drawers!

What's the Big Deal?

This is a big deal because, increasingly, our accounts are online, electronic, and not actually in desk drawers. Just as we would not want our locked journals pried open to determine our last wishes when there's a will in the unlocked top drawer, we don't want anyone and everyone coming in rifling through everything in our electronic world.

So someone needs to make rules about the appropriate approach. Enter the National Conference of Commission on Uniform State Laws. It drafted the RFADAA and recommends its passage nationally, with two stated goals in mind.

The Act gives fiduciaries the legal authority to manage digital assets and electronic communications in the same way they manage tangible assets and financial accounts, to the extent possible. It also gives custodians of digital assets and electronic communications legal authority to deal with users' fiduciaries while respecting the reasonable expectation of privacy for personal communications.

Simply put, people entrusted to handle an estate will be allowed to manage accounts while maintaining the privacy of users. The Act's drafters explain, "The general goal of the act is to facilitate fiduciary access and custodian disclosure while respecting the privacy and intent of the user."

Spirit of the Act

The Act, if it passed everywhere, would make the approach to opening accounts to fiduciaries consistent across the country. It follows traditional trusts and estates law principles, just shifts the application to the electronic realm.

The Commission outlines which four types of fiduciaries have what extent of access to accounts and for what purposes, and states very clearly up front that it does not apply to family and friends who are not fiduciaries. In other words, your spouse or niece or brother or best friend will not end up reading your digital secrets ... unless you let them.

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