Governor Christie Signs New Law to Cover Digital Assets
On September 13, 2017 Governor Christie signed a new bill into law, the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”). The new law becomes effective 90 days from the date of signing, December 12, 2017.
The issue of accessing digital assets has become an increasingly troublesome one over the last 15 years as the number of online accounts and other digital assets has grown exponentially. The Act permits certain fiduciaries to access a user’s digital assets. The Act defines a digital asset as an electronic record in which an individual has a right or interest but does not include the underlying asset or liability unless the asset or liability is itself an electronic record. A fiduciary includes a guardian, agent under a power of attorney, executor of a will and trustee of a trust.
What exactly does this act cover? I can, for example, sign a power of attorney specifically giving my agent the power to access my digital assets, such as my Facebook, Amazon, email accounts etc. Facebook or Amazon, as the custodian, must disclose that information to my agent. The same thing applies if my executor after my death needs to access my accounts.
Until now companies such as Facebook have relied on their own terms of service agreement to determine what access they will or will not provide. This is a much needed law. It overrides a custodian’s term of service agreement as it relates to accessing and using digital assets. There have been a number of legal cases around the country involving disputes over accessing digital assets in which the technology companies have unilaterally decided what they will and won’t do, fairly or unfairly. The UFADAA aims to fix that. The law does not, however, give the fiduciary any more rights under the term of service agreement than the user has.
To be clear, this law does not allow for the transfer of digital assets. In other words, I can’t use the UFADAA to transfer my iTunes songs and other content to someone by way of my will unless I otherwise own these assets. Typically we have a license to download the content, different than in the old days when the LPs that I purchased at the local record store were mine to keep and transfer to third persons as I saw fit. Whether I can or can’t transfer my iTunes content is probably still dependent on the terms of service agreement and whether I own the download or just a nontransferable license to enjoy the content.
Nevertheless, the new law provides a much needed remedy to the growing problem of access to digital assets. It is important, therefore, to update powers of attorney, wills, trusts etc. to explicitly provide fiduciaries with the power to access these assets (assuming that you want your fiduciary to have access) and tailor the language in these documents so that it aligns with the new law.