New York law concerning fiduciary access to digital assets
New York recently passed a law that brings uniformity to rules around fiduciary access to digital assets.
Digital assets are playing a growing role in estate planning. From social media to banking, most Americans have many assets, both of the monetary and sentimental kind, located in the digital world. What a lot of people don’t realize, however, is that when a person dies access to those assets can be extremely difficult and complicated. That’s because such access is often determined by the Terms of Service agreements that users agree to when they first sign up for various digital services. Fortunately, New York recently passed an estate planning law that makes fiduciary access to digital assets more predictable and uniform.
Why are digital assets different?
Most people understandably assume that when they die, their fiduciary, such as the estate executor, guardian, or trustee, will have access to all of their assets. While this is true for tangible assets, the situation gets a little more complicated with digital assets. That’s because service providers are often concerned about fraud and unauthorized users gaining access to somebody’s account. As a result, some service providers have been overly zealous in protecting their users’ accounts to the point of even barring fiduciaries access to those accounts. Furthermore, the fact that each service provider has its own Terms of Service agreement also creates a lack of uniformity in how digital assets are treated when users pass away.
Many service providers, for example, will refuse to provide access to a user’s account or their password to anybody who has not been specifically authorized such access by the user. Of course, in cases where the user is deceased, getting such authorization to access those digital accounts can present a bit of a headache and in many cases has required a court order.
Making access the law
As Kiplinger reports, to address this problem a number of states have adopted what is called the Uniform Fiduciary Access to Digital Assets Act. In New York, this act was made state law in September 2016 through Article 13-A of the Estates Powers and Trusts Law.
The law essentially extends to digital assets what has long been the case for physical assets. With the new law, there is now a clear process by which fiduciaries can access a deceased person’s digital assets without worrying about differences in each service provider’s Terms of Service agreements. Furthermore, the law allows testators to specify which accounts or which portions of certain accounts fiduciaries are not allowed to access, thus preserving their privacy even after death.
Estate planning law
Estate planning is something that can help families avoid costly disputes and provide them with peace of mind. An estate planning attorney can help individuals come up with an estate plan that best protects their assets and their family’s future, and best assures them that their final wishes will be respected after they pass on.