Virtual Assets and Real Advice - Clients Need Candid Advice Regarding their Digital Assets (6 of 10)

The next three laws to be passed in Indiana, Oklahoma, and Idaho cover a much wider range of digital assets.[i]  In 2007, Indiana began requiring providers to give the personal representative “access to or copies of any documents or information stored electronically” with that provider.[ii]  Beginning in 2010, Oklahoma gave executors and administrators the ability to “take control of, conduct, continue, or terminate any accounts of a deceased person on any social networking website, any microblogging or short message service website or any e-mail service websites.”[iii]  In 2012, Idaho became the first state to grant similar powers to conservators by inserting into its Uniform Probate Code, almost verbatim, the language used in Oklahoma’s statute.[iv]  According to its sponsors, the law was meant to give personal representatives and conservators the power to control the “e-mail, blogs, instant messaging, Facebook types of accounts, and so forth.”[v]

Although these latter statutes seek to extend more rights over more types of digital assets, the latest two statutes, both passed in 2013, are less expansive in their reach.[vi]  Virginia’s new law only applies to personal representatives seeking access to a certain digital assets belonging to a deceased minor.[vii]   Alternatively, Nevada’s law covers digital assets of deceased minors and non-minors alike, but it does not give a legal representative any power to access online accounts.[viii]  Instead, it only gives the representative “power to direct the termination” of any such account.[ix] 

Despite the many differences of the laws passed thus far, they have some common shortcomings.[x]  First, there has been little in the way of judicial interpretation of these laws.[xi]  Also, some critics say these laws do not give full sway to the contract rights of the parties involved with digital assets stored online.[xii]  A provider may explicitly prohibit certain dispositional rights in its terms of service.[xiii]  Additionally, providers could use choice of law clauses in their terms of service to select a state without a statutory scheme that would govern any potential conflicts.[xiv]  If a user voluntarily enters into such an agreement, he may be waiving any rights that these state laws are seeking to protect.[xv]  Finally, perhaps the biggest shortcoming of these laws is how few of them there are.  If someone is domiciled in any of the other 42 states, they have no statute to rely on to protect their digital estate planning interests.  Other states are beginning to consider similar legislation in this area, but the movement has been glacial compared to the growing dilemma surrounding dispositional control of these assets.

B. Proposed Uniform State Law

    Given the lack of uniformity and slow pace of legislative action towards greater control over digital assets at death or incapacity, many have found hope in the recent attention being paid by the Uniform Law Commissioners (“ULC”).[xvi]  The ULC formed a committee to draft a model state law that could adequately address the dispositional interests of digital asset owners, the contract interests of service providers, and the restrictions imposed by federal privacy laws.[xvii]  In April 2014, after more than two years of work, the committee completed the final draft of the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”). [xviii]  UFADAA’s purpose is to give personal representatives, conservators, agents, and trustees, “authority to access, control, or copy digital assets and accounts” while leaving other law “such as fiduciary, probate, trust, banking, investment securities, and agency law” unaffected.[xix]  However, some of the same concerns regarding the conflicts between property, contract, and privacy laws that applied to the current state laws would arguably apply to a uniform state law.  Whether UFADAA is constructed properly to deliver on its lofty purpose is a question for another day.  But even if it is perfectly crafted, millions of people will be left unprotected unless UFADAA is widely adopted.  Unfortunately, the history of other Uniform Laws and the growing opposition to this type of legislation makes a high adoption rate unlikely.