Learn How the Digital Asset Act Impacts Estate Planning

Wed 27th Jul, 2016 Estate Planning

The Florida legislature recently passed legislation designed to enable individuals to effectively plan for the management of their digital assets in the event of incapacity or death.  The Florida Fiduciary Access to Digital Assets Act, which went into effect on July 1, 2016, has two main purposes: (1) vest fiduciaries (e.g., personal representatives, trustees, and attorneys-in-fact) with the authority to access, control, or copy digital assets and accounts and (2) provide custodians of digital assets and electronic communications the legal authority needed to interact with fiduciaries of their users while granting custodians immunity from liability for acts or omissions performed in good faith compliance with the Act.

A quick review of some vocabulary may help. A “digital asset” is an electronic record in which an individual (the “user”) has a right or interest. § 740.002(9), Fla. Stat. This term does not include an underlying asset or liability unless the asset or liability is itself an electronic record. Id.  A “custodian” is the entity that carries, maintains, processes, receives, or stores a digital asset of a user (e.g., Facebook, Google, LinkedIn, etc.).  § 740.002(7), Fla. Stat.  An “online tool” is an electronic service provided by a custodian which allows the user, in an agreement distinct from the terms-of-service agreement between the custodian and user, to provide directions for disclosure or nondisclosure of digital assets to a third person (e.g., Facebook’s Legacy Contact or Google’s Inactive Account Manager). § 740.002(16), Fla. Stat.

The Act divides digital assets into two categories and applies different default rules for the disclosure of each type of asset. Generally, a user must expressly authorize a fiduciary (in a will, trust, power of attorney, online tool, or other record) to be able to access the “content of a user’s electronic communications.”  The content of an electronic communication includes private information concerning the substance or meaning of a communication, such as the subject line and body of a user’s emails, text messages, and other private messages (i.e., inside the envelope information). See § 740.002(5), Fla. Stat.  Conversely, no such authorization is needed for a fiduciary to access a user’s other digital assets, including a user’s “catalog of electronic communications,” which includes information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of the person (i.e., outside the envelope information).  See § 740.002(4), Fla. Stat.

The Act also contains a priority system as to what controls the disclosure or non-disclosure of a user’s digital assets:

  • If the user provides directions for disclosure or nondisclosure of digital assets through an online tool, the online tool overrides contrary direction by the user in a will, trust, power of attorney, or other record. § 740.003(1), Fla. Stat.
  • If the user has not used an online tool (or one was not provided by the custodian), such direction may be provided for in a will, trust, power of attorney, or other record. § 740.003(2), Fla. Stat.
  • If the user does not provide direction through an online tool or in a will, trust, power of attorney, or other record, the custodian’s terms-of-service agreement controls. §§ 740.003 and 740.004, Fla. Stat.

Planning for digital assets is an important, albeit often overlooked, part of the overall estate planning process, and the Florida Fiduciary Access to Digital Assets Act should significantly improve the ability to undertake such planning.