There exists in this country a Uniform Law Commission the function of which is to study and propose uniform statutory codes to the various states’ legislatures. This is supposed to lead to commonality of statutory codes among the various states. In recent years, the Uniform Law Commission has found that there was considerable difficulty for family members to gain access to digital assets of a deceased or incapacitated person. The Commission proposed a uniform act called Uniform Fiduciary Access to Digital Assets Act (which will be referred to as UFADAA hereinafter), that is intended to allow “fiduciaries” access to a deceased or incapacitated person’s digital assets as a part of the administration of that person’s estate. Arizona enacted its version of the UFADAA which became effective in August of 2016. Its purpose is to provide the fiduciaries – defined as executors (personal representatives in Arizona), successor trustees of trusts and those holding powers of attorney to gain lawful access to a decedent’s digital assets.
What are digital assets? Nearly everyone now has some type of an on-line computer account used to communicate, pay bills, purchase merchandise, conduct business, even social accounts to create on-line personalities. Naturally, we protect the accounts by using our secret passwords. Digital assets also include either on-line or on-computer documents, media stored in one’s computer, photos, videos, music, medical records, legal or financial documents, web-sites, banking information and other data maintained on or through the use of our computers.
Executors of wills, successor trustees of trusts and those holding powers of attorney typically have fiduciary responsibility to manage the assets owned by the decedent’s estate or trust whether the assets are real property, personal property, money or other assets. These “other assets” are now recognized to include “digital assets.” For example, when a family member dies or becomes incapacitated, the fiduciary is authorized and, in fact, has the responsibility to contact the person or company maintaining the digital asset and, upon proving the appropriate authority, to assume control of and manage the deceased or incapacitated person’s digital assets. This is about as much help UFADAA provides – authority to assume lawful control over another person’s digital assets.
How important to day-to-day life is this new statutory scheme? Most of us maintain bank accounts, investment accounts, commercial accounts through which we purchase merchandise and other contacts through the use of the computer. How many of us cause our bank to pay bills through computer authorization? The access to such accounts is through our computers, a web site familiar to us and our using a password that is confidential to us. We are often encouraged to use such accounts in such a way as to avoid any use of paper or mail. Such paperless accounts will leave the fiduciary with little information about how to contact the bank or investment company or other account without knowing who to contact, let alone how to provide such an account holder with evidence of the fiduciary’s authority. Assuming that the fiduciary has access to information about the account and knows there is an account registered on the computer, how will the fiduciary be able to provide the confidential password necessary to gain access to the account? Many of us maintain our own records within our computers of our assets and liabilities and it can be necessary for a fiduciary to gain access to one’s computer to obtain that recorded information. The first hurdle is to recognize that there are such materials within a computer or that there are records stored within the computer that contain information about monetary or other assets that are to be managed by the fiduciary. The fiduciary has to determine where the decedent’s assets are located and, once having determined that, then access via the computer must be through the confidential password. If the deceased or incapacitated person possessed paper records of his or her accounts, the fiduciary can develop contact by either telephone or parcel post with the holder of assets and to gain access to those assets without the use of a computer or password.
There is little value in UFADAA to the fiduciary who has little information about the existence of paperless accounts, but cannot obtain passwords that enable access to such accounts. It will be of little comfort to the family of the deceased or incapacitated person that the fiduciary has discovered such paperless accounts, but cannot gain access for lack of the password.