Introducing “Digital Assets” Legislation

For those that engage any financial transactions online or use social media, there are new laws going into effect you’ll want to know about, known as “Digital Assets” legislation.  These laws allow executors of estates and other agents access to a deceased person’s online records.  Digital asset laws are needed to identify the accounts the deceased person had and they help clarify what, if anything, needs to be done with those accounts.
A digital asset is any electronic record a person has a right or interest.  Usually, under digital assets laws, only enough information to tell what financial accounts a person holds is available -the email account itself is still private.  An executor, attorney in fact, or other fiduciary agent of a deceased or incapacitated person doesn’t have access to your whole account.  Rather, these laws stipulate what those agents have access to, which is usually based on your preference.

For example, in the New York legislation, agents can’t read the text of the email.  They’re only made aware of the fact a person did have communication with their bank.  Executors and agents will not be able to read what was said between a bank and a customer. They also won’t be able to see or read emails not contained in the “catalogue.”

This catalogue is made up of a list of all communications of this nature.  When a bank sends its customers monthly statements, the instance of communication is recorded in the catalogue.  It is the “content” or text of these emails they don’t have access to.  However, they can have access to the text, if you allow for that by giving consent in writing.

Here are ways to give or deny your consent.

  • Online tools
  • By expressing this wish in a will, power of attorney, trust agreement or another document.
  • Working with your estate attorney to see what level of consent you’d like

It’s best to discuss any questions with your tax attorney. There are certain definitions of what exactly fiduciaries have access to, and you’ll want to make an informed decision.

The main goal of this legislation is not to spy on the deceased and get personal information from them.  It is to simply prove what accounts they had and what can be done with them.  For this reason, the catalogue of communication is given to the executor by default, and the context of each communication is not.

What if one wishes to give an executor access to all or none of the catalogue and content? This can be expressed in their documentation of a will, power of attorney, or trust agreement.

In addition to the example state of New York, 19 other states have a form of digital asset legislation.  Many other states have had similar legislation introduced to the state legislature. Washington has a law on digital assets.  It’s been effective since June 9, 2016. For those of you in Oregon, at the start of 2017, a digital asset law will go into effect.
The Washington law, known as the “Uniform Fiduciary Access to Digital Assets Act,” has a few stipulations that need to be noted.  The companies controlling email and other accounts are known as custodians. Examples are Yahoo, Apple, and Facebook. These custodians need to provide only the necessary information to the fiduciary.  For example, fiduciaries get access to the records they need to complete their job.  However, they’re not given the deceased person’s username and password to an email account – the fiduciaries must provide the custodians with written proof of their legal authority to access these digital assets as well.  The custodian then has 60 days to get the fiduciary the records and information they need.

These laws help fiduciaries or executors as they try to find records stored digitally.  As there is more and more activity taking place online, no doubt more of their work will be in the digital arena moving forward.  Make sure to stay up-to-date with relevant information as it comes out.

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