digital assets upon the client’s death
or disability. But the delay and cost is
substantial and may be easily avoided
with appropriate planning.
Digital Asset Inventory
The first step to preserving and protecting a client’s digital assets is to
create a comprehensive inventory. Few
estate planning attorneys would forgo
having a new client inventory key assets such as bank and retirement accounts. Today, a comparable inventory
of digital assets is just as necessary.
The importance of cataloging digital assets and passwords cannot be
overstated, given that it is difficult or
impossible for heirs, fiduciaries, and
family members to discover digital assets without specific knowledge of the
asset and where it exists.
To be secure, the inventory should
be an electronic file, encrypted with a
complex password. Normal password
protections of an Microsoft Word or
other Microsoft Office document are
easily circumvented, so best practices
are to use a software package designed
to store confidential documents and
passwords. The encrypted electronic
inventory file can then be stored on a
home computer, smartphone, or USB
drive, or uploaded to the cloud. The
password to access the electronic list
may be written on a piece of paper
stored with original estate planning
documents or in a safe-deposit box. It
is critical that this password be kept
up to date, because if a user changes
the password and fails to replace the
written (now outdated) password, the
person designated to access the list
will be unable to do so.
Transfer Ownership of Digital
Assets to Entity
The next step is to devise a method for
transferring the value associated with
digital assets to the client’s beneficiaries. Transferring ownership of digital
assets to an LLC, corporation, or trust
is probably the most effective way to
preserve the value and accessibility of
the client’s digital assets upon his or
her death or disability, although such a
transfer is not always possible.
Online Storage Accounts
It is essential to provide a means by
which fiduciaries will be able to iden-
tify and access the client’s digital as-
sets upon death or disability. Online
storage accounts allow users to store
digital assets and information about
them for a monthly or yearly fee.
Many allow designated persons to ac-
cess the owner’s digital assets in the
event of death or disability, and most
will store copies of important docu-
ments and frequently used data.
Accessing the Digital Assets of
a Deceased or Disabled Client
Even in the best-case scenario —
where the decedent had inventoried
all digital assets, user names, and
passwords for the fiduciary — the
administration of a deceased or disabled person’s digital assets can be
extremely complicated. Before attempting to access any digital assets,
the fiduciary should carefully review
the terms and conditions of use of all
digital assets. Federal and state laws
criminalize certain types of unauthorized access to computers or data.
If the fiduciary is not authorized to
access digital assets under the digital
asset provider’s terms of service, then
accessing the assets may be a crime,
even if the fiduciary is expressly authorized access by the estate planning documents.
All 50 states have criminal laws
prohibiting unauthorized access to
electronic data. Federal law, specifically the Computer Fraud and Abuse
Act, criminalizes intentional access
of a computer without authorization
or by exceeding authorization. The
U.S. Department of Justice has stated
that violating a term of service on
Facebook or Match.com is a federal
crime under CFAA, although the DOJ
has said it doesn’t intend to prosecute
minor violations.
Accordingly, state legislatures are
increasingly providing statutory au-
thority for fiduciaries to access cer-
tain digital assets of decedents. Eight
states (Connecticut, Oklahoma, Ida-
ho, Rhode Island, Nevada, Virginia,
Indiana, and Delaware) have statutes
giving personal representatives or ex-
ecutors limited access to certain digi-
tal assets, and four additional states
(Nebraska, Oregon, Massachusetts,
and New York) are considering simi-
lar legislation. While state laws are
well-intentioned, they conflict with
CFAA, making their validity unclear.
Working with the American Bar
Association and American College
of Trust and Estate Counsel, the Uni-
form Law Commissioners approved
the Uniform Fiduciary Access to Digi-
tal Assets Act on July 16, 2014. This
Act will likely be an important influ-
ence for other states to adopt similar
legislation. NWL
Rochelle
L. Haller
is a shareholder
with
the law
firm of
Graham
& Dunn
PC, Seattle. She can be reached
at rhaller@grahamdunn.com or
206-340-9385. A version of this
article titled “Rise of the Internet:
Planning for Digital Assets,” by
Karin C. Prangley, Rochelle L.
Haller, and Anne W. Coventry, was
published in Estate Planning in
May 2013.
ABOUT THE WSBA REAL
PROPERTY, PROBATE AND
TRUST SECTION
The mission of the Real Property,
Probate and Trust Section is to
assist members in achieving the
highest standards of competence, professionalism, and ethics in their practices; to assist
the Legislature in the enactment
and improvement of the laws affecting real property, probate,
trusts, and estates; to assist the
judiciary in the just administration of those laws; to support
the WSBA with regard to those
matters which concern the practice of law in the areas of real
property, probate, trusts, and
estates; and to otherwise serve
our members by helping them
realize their professional goals.
For more information and to
get involved, please contact the
Section chair, Joseph McCarthy,
at jpmccarthy@stoel.com.
