DIGITAL ASSETS AND ESTATES IN NY AND CT

Digital Assets and Property

Most people have a substantial amount of digital property and assets (electronic records, email accounts, social media accounts, and blogs) there is no federal legislation for digital property.

Digital Assets and Estates

You will have to rely on the terms of service or privacy policy of the service that manages the asset (such as Gmail, Facebook, or LinkedIn) to determine what should be done when the owner dies if there is no state law addressing the issues.

Twenty Five states have created laws that to protect people’s digital assets and give the person’s family the right to access and manage those accounts after the owner has died. There is a model law which has been proposed which is intended to permit executors and trustees access to deceased’s digital assets. It has not been widely adopted, but it provides a model law and the best concepts.

Fortunately, New York and Connecticut have updated laws which are expansive and provides for access to all digital assets.

Digital Assets and Property in New York

The law is AB A9910A (effective 9-29-16) and it provides for broad access and control over digital assets by Executors and other legal representatives.

Digital Assets and Electronic Records in Connecticut

The law is SB 262 Public Act No. 05-136 (effective 10-1-05) known as the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act.  It extends a fiduciary’s (Executor, POA, Conservator, Trustee) existing authority over a represented person’s tangible assets to include the person’s digital assets. The law specifies the conditions under which fiduciaries have the right to access digital assets.

The UFADAA applies to those residing in Connecticut, or those who resided in Connecticut at the time of their death.

The Summary from the Legislative Analysis does a great job explaining it.

The bill applies to four types of fiduciaries, regardless of when their authority became effective:

1. executors or administrators of deceased persons’ estates,
2. court-appointed conservators of protected persons’ estates,
3. agents appointed under powers of attorney, and
4. trustees.

The law establishes the processes fiduciaries must follow to gain access to a represented person’s digital assets or terminate an account used to access such assets. A fiduciary must send a written request to the custodian along with (1) a certified copy of the document granting fiduciary authority, such as a letter of appointment, court order, or certification of trust and (2) certain other information the custodian requests, such as account verification.

The custodian is the person who carries, maintains, processes, receives, or stores an account holder’s digital asset. A custodian must generally comply with a request within 60 days after receiving it and is immune from any liability for an act or omission done in good faith compliance. The law applies to a custodian if the account holder (i.e., user) resides in Connecticut or did so at the time of death.

Under the law, a user, through an online tool, may direct a custodian to allow or limit access to a designated person (recipient). (An “online tool” is an electronic service provided by a custodian that allows a user, in an agreement distinct from a service agreement, to provide directions for disclosure or nondisclosure of digital assets to a third person.)

A fiduciary or designated recipient has the same access rights as the represented person. A custodian’s service agreement that restricts a fiduciary’s or designated recipient’s access to the user’s digital assets is void unless the user gave separate affirmative consent.

The law does not apply to an employer’s digital assets used by employees in the ordinary course of business.

It replaces the provisions under current law that require email service providers to give estate executors and administrators access to, or copies of, the email account of a decedent domiciled in Connecticut when he or she died.

DESIGNATED RECIPIENT’S AUTHORITY FOR DIGITAL ASSETS

Under the law, if a custodian’s online tool allows, at all times, a user to modify or delete a direction about disclosure to a designated recipient, the direction overrides the user’s contrary direction in a will, trust, power of attorney, or other record.

If a user has not given any such direction to the custodian through an online tool or the custodian has not provided such a tool, the user may allow or prohibit disclosure, in a will, trust, power of attorney, or other record, to a fiduciary of some or all of the user’s digital assets, including electronic communications the user sent or received.

FIDUCIARY’S ACCESS TO DIGITAL PROPERTY

The law distinguishes the level of access a fiduciary may have to a user’s digital assets and the conditions under which the custodian must grant such access.

Level of Access to Digital Assets

Unless otherwise ordered by a court, directed by the represented person, or provided by the document granting authority, the law allows a fiduciary to access:

1. the content of electronic communications to the extent allowed under federal privacy laws (i.e., content disclosure);
2. the “catalogue of electronic communications” sent or received by the represented person; or
3. other digital assets, content excluded, in which the represented person has a right or interest (or had a right or interest at the time of death).

Under the law, “catalogue of electronic communications” means the (1) identifying information and email address of each person with whom the account holder communicated and (2) time and date of the communication.

Conditions for Access to Electronic Records

Generally, a trustee who is not an original user, an executor, an agent, or a conservator may access the content of a user’s electronic communications if the user expressly authorized or a court ordered such a disclosure. Specific access to the content of electronic communications must be expressly authorized in the document granting fiduciary authority that accompanies the written request (see below).

On the other hand, unless the user prohibited the disclosure or the court directed otherwise, a fiduciary may access (1) a catalogue of electronic communications the user sent and received and (2) other digital assets, excluding content.

Written Request and Document Granting Fiduciary Authority to Digital Assets

A fiduciary’s request to the custodian for access to digital assets must be in writing and accompanied by the following documents, as applicable and depending on the type of fiduciary:

1. a certified copy of the (a) certificate of appointment as executor and (b) the user’s death certificate;
2. an original or a copy of the power of attorney granting the agent authority and a certification, under penalty of perjury, that the power of attorney is in effect;
3. a certified copy of the court order that gives the conservator authority over the digital assets; or
4. a certified copy of the trust instrument and a certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust.

Custodian’s Request for Additional Information for Access to Digital Assets

Regardless of the level of access requested, a fiduciary must also provide the following information if requested by the custodian:

1. a number, username, address, or other unique subscriber or account identifier the custodian assigned to identify the user’s account or
2. evidence linking the account to the user, principal, trust, or conserved person, as applicable.

Additional Requirements for Access to Digital Property

In addition to the requirements described above, other specific requirements apply to executors and conservators depending on the level of access requested.

Executors Access to Digital Property

An executor requesting content disclosure, unless the user provided direction using an online tool, must give the custodian a copy of the user’s will, trust, power of attorney, or other record showing the user’s consent to such disclosure.

The custodian may ask an executor to provide a court order that finds that the user had a specific identifiable account with the custodian or that:

1. the user consented to disclosure of the content,
2. disclosure would not violate federal or other applicable electronic communications or customer privacy laws, or
3. disclosure is reasonably necessary for administration of the estate.

If the executor requested access to digital assets but not access to the content, the custodian may ask for (1) an affidavit or a court order stating that such disclosure is reasonably necessary for administration of the estate or (2) a court order that finds that the user had a specific identifiable account with the custodian.

Conservators Access to Digital Assets

A court may grant a conservator access to electronic communications and other digital assets after a legal process and a court proceeding, as is required for accessing a protected person’s tangible assets under existing law.

A conservator with general authority to manage the assets of a conserved person may ask a custodian to suspend or terminate the person’s account for good cause. Such a request must be accompanied by a certified copy of the certificate of appointment giving the conservator authority over the person’s property.

Trustee Who is an Original User of Digital Assets

A custodian must disclose to a trustee who is an original user of an account any digital asset of the account held in trust, including a catalogue of electronic communications of the trustee and the content of electronic communications.

CUSTODIAN’S COMPLIANCE WITH DIGITAL ASSET AGREEMENTS

Terms-of-Service Agreement For Digital Assets

The law specifies that it does not change or impair a custodian’s or user’s rights under a service agreement to access and use the user’s digital assets. But, a service agreement provision that restricts a fiduciary’s access to the digital assets held by a custodian is void unless the user gave separate affirmative consent.

Compliance for Digital Property in General 

A custodian must comply within 60 days after receiving all required documents in support of a disclosure or an account termination request from a fiduciary or a designated recipient. If the custodian fails to comply, the fiduciary or designated recipient may apply for a court order that directs compliance. An order directing compliance must state that such compliance would not violate federal requirements regarding voluntary disclosure of customer communications or records.

Compliance When User is Alive 

When a user is still alive, the custodian may (1) notify the user that a request was made to disclose information or terminate an account; (2) deny a request if the custodian is aware of any lawful access to the account following the receipt of the fiduciary’s request; or (3) obtain, or require a requestor to obtain, a court order.

The court order must specify:

1. that the account belongs to a conserved person or principal;
2. that there is sufficient consent from the conserved person or principal to support the requested disclosure; and
3. a finding required by law other than the bill’s provisions.

Disclosure of Digital Assets

When disclosing a user’s digital assets, the custodian may:

1. grant a fiduciary or designated recipient full access to the user’s account;
2. grant a fiduciary or designated recipient partial access to the user’s account sufficient to perform the tasks with which the fiduciary or designated recipient is charged; or
3. provide a fiduciary or designated recipient a copy in a record of any digital asset that, on the date the custodian received the request for disclosure, the user could have accessed if the user were alive and had full capacity and access to the account.

A custodian need not disclose a digital asset a user deleted.

Fees for Digital Assets

A custodian may charge a reasonable administrative fee for the cost of disclosing digital assets.

Undue Burden Exception for Digital Assets

A custodian directed or asked to disclose some of the user’s digital assets does not have to do so if separating them would unduly burden the custodian. In such a case, the custodian or fiduciary may seek a court order to disclose:

1. a subset, limited by date, of the user’s digital assets;
2. all of the user’s digital assets to the fiduciary or designated recipient;
3. none of the user’s digital assets; or
4. all of the user’s digital assets to the court for in camera review (in private) in order to issue an order.

FIDUCIARY’S DUTIES FOR DIGITAL ASSETS

Under the law, the legal duties that apply to a fiduciary charged with managing tangible property also apply to fiduciaries managing digital assets. These include the duty of care, loyalty, and confidentiality.

A fiduciary’s or designated recipient’s authority with respect to a user’s digital asset (1) is subject to copyright and other applicable law, (2) is limited by the scope of the fiduciary’s duties, (3) may not be used to impersonate the user, and (4) is subject to any applicable terms-of-service agreement that was not overridden by a user’s direction.

A fiduciary with authority over the property of a decedent, conserved person, principal, or settlor has the right to access any digital asset in which the decedent, conserved person, principal or settlor had a right or interest and that is not held by a custodian or subject to a terms-of-service agreement.

A fiduciary acting within the scope of the fiduciary’s duties is an authorized user of the property of the decedent, conserved person, principal, or settlor for the purpose of applicable computer fraud and unauthorized computer access laws.

A fiduciary with authority over the tangible, personal property of a decedent, conserved person, principal, or settlor (1) has the right to access the property and any digital asset stored in it and (2) is an authorized user for the purpose of computer fraud and unauthorized computer access laws.

TERMINATING A DIGITAL ASSET ACCOUNT

A custodian may disclose information in a user’s account to a fiduciary when the information is required to terminate an account used to access digital assets licensed to the user.

A fiduciary request to a custodian to terminate a user’s account must be in writing and accompanied by:

1. a certified copy of the user’s death certificate if the user is deceased;
2. a certified copy of the applicable document granting fiduciary authority over the account; and
3. if requested by the custodian, (a) a number, username, address or other unique subscriber or account identifier assigned by the custodian to identify the user’s account; (b) evidence linking the account to the user; or (c) a court finding that the user had a specific account with the custodian