Digital AssetsPresented by Sharon Rivenson Mark, Esq. and Shirley B.

Whitenack, Esq.Adapted from Presentation by Catherine A. Seal, Esq.

What are digital assets?

• Digital asset” means an electronic record. The term includes the content of electronic communications.• Current ULC definition (subject to change)

• There must be a right to use the record in order to be considered an asset.

Digital Assets

• Includes images, photos, text files and videos.

• May include electronic databases.

• Financial accounts – online banking

• Social Media• Facebook• Twitter • LinkedIn

Digital Assets

• Medical records

• Tax documents

• Music playlists

• Domain name

• Blogs

• Avatars

Digital Assets

• Business records• Dropbox• Client information

Tangible or intangible?

• Digital assets are intangible personal property unless they are printed.

• If they are converted to physical media, i.e., a photograph, then they are tangible personal property.

Digital Assets

Does one own the account or the contents of the account?

Terms of Service Contract

• Used by internet service providers and websites that store an individual’s personal data

• Governs the relationship between a user and service provider.

• May include a license agreement and privacy policy.

Terms of Service Contract

• Contract of Adhesion

• No way to opt out

• Who reads TOS Agreements?

Planning for Digital Assets

• Fiduciaries may need access to digital files to fulfill their obligations

• Lack of access to passwords and online accounts can make it difficult to • marshal assets• file tax returns• pay bills

Planning for Digital Assets

• Photographs and videos –sentimental value to beneficiaries

Planning Options

• Provide fiduciary with access

• Designate special fiduciary for digital assets

• Prevent access

Digital Assets Planning for Incapacity

• Options:

• Give agent under a POA the power to access digital assets

• Provide passwords

Planning

• Ask client about digital assets

• Discuss ramifications of inability of fiduciary to access digital assets

Creating an Inventory

• Should attorney ask clients to create list of digital assets and passwords?

• Need to update list frequently

• Need to tell someone where to find the list.

Access Problems

Voicemail

Home security system

Computers

Smartphones

Financial accounts

Social media sites

Federal Law

• Stored Wire and Electronic Communications and Transactional Records Access prohibits disclosure of stored communications without consent of originator or intended recipient or subscriber.

Federal Law

• Computer Fraud and Abuse Act• Criminalizes unauthorized access

Access Authorization

• Share digital assets such as photos and videos during lifetime

• Give fiduciary power to exercise control over digital assets

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Fiduciary Access to Digital Assets

On July 16, 2014, the Uniform Fiduciary Access to Digital Assets Act (UFADAA) was approved by the Uniform Law Commission (ULC) at its 123rd Annual Meeting in Seattle.

The final version of UFADAA provides the access to digital assets that fiduciaries need to carry out their duties, while respecting the privacy and intent of the account holder.

Purpose of FADAA

The purpose of UFADAA is to vest fiduciaries with the authority to access, control, or copy digital assets, while respecting the privacy and intent of the account holder.

FADAA Enactment

• Delaware

Types of Fiduciaries

This uniform law address four types of fiduciaries:

(1)personal representatives (also known as executors) of a deceased person’s estate;

(2)conservators (also known as guardians) for a living person;

(3)agents acting under a power of attorney; and

(4)trustees of a trust.

FADAA

• Sections 1- 2 General provisions, including definitions

• Sections 3 – 6 Rights of various fiduciaries

• Section 7 – Fiduciary Authority

• Section 8 – Compliance

• Section 9 – Custodian Immunity

• Sections 10 – 16 Miscellaneous provisions

Section 3

• (a) unless the will prohibits – a personal representative can obtain the digital assets and records of electronic communications, including a log of the communications and the content

Section 4

• Section 4. Control of digital property and access to communications of protected person by [conservator]. At hearing on an appointment of or authority of a [conservator], a court may authorize a [conservator] to:

Section 4

• obtain the digital assets and records of electronic communications, including a log of the communications and the content

Section 4

State law will determine the criteria for when a court will grant to the conservator the power to access digital assets of the ward

Section 5

• The authority of an agent under a POA must be expressly set forth in the POA document and cannot be prohibited by a governing instrument

Section 5

• Where a power of attorney expressly covers the content of electronic communications, Section 5 authorizes the agent to access the contents if the service is permitted to disclose.

Section 6

• Trustee may access digital assets held in the trust unless otherwise provided by a court or by the terms of the trust

Section 7

Sets forth fiduciary authority regarding digital assets

Section 8 - Compliance

• Personal representative must show letters

• Conservator must show copy of order giving authority over digital assets or electronic communication

• Agent must show copy of power of attorney that authorizes the agent to exercise authority over digital assets or electronic communication

• Trustee must show copy of trust instrument or certification of trust

Section 8 Compliance

• If fiduciary produces necessary authority to custodian or account holder, custodian must comply

• Custodian has 60 days to comply, or fiduciary may apply to court for order directing compliance

Section 9 – Custodian Immunity

• Custodians are immune from liability for any action done in compliance with the act