Digital Asset Planning
As technology advances over time, the average person owns more and more digital assets. The same applies to businesses too, where the rise of technology also plays a large part in its development. If companies like Salesforce know it’s importance, then it is definintely something worth considering. We doubt technology is going to disappear anytime soon, so using it to our advantage can be very beneficial.
People want to get more assets over this transition and therefore may want to dispose of the old ones, which is why exittechnologies.com is brilliant for the disposal or renewal of your old IT equipment. The definition of digital assets is very broad and includes intangible assets ranging from online accounts, such as bank accounts, email accounts, and social media, to digital files stored on a computer or in the cloud. Traditional estate planning tools have been useful in dealing with comparable non-digital assets, such as by allowing a person’s fiduciary to deal with a bank in person. However, the efficacy of traditional estate planning tools on digital assets is still unclear.
Digital Assets Under Federal Law
While most issues of property disposition are handled by state laws, digital assets are usually controlled at the federal level because of their interstate nature. Original guidance was offered by the Electronic Communications Privacy Act of 1986 (ECPA)’s Stored Communications Act (SCA). The SCA allows digital asset providers to deny access to anyone, but includes a now-abused “lawful consent” exception. The exception is not applied uniformly between states and is therefore unclear and unhelpful.
Digital Assets Under Texas State Law
More recently, twenty-three states have passed the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in some form, which provides specific guidance on how to distribute digital assets upon death. RUFADAA allows a person’s fiduciary, such as an agent or executor, access to online accounts if the person explicitly grants the power in an estate planning document or through a service provider’s own procedures. RUFADAA also allows the fiduciary to determine how to distribute and manage the assets after the person’s death. RUFADAA was filed in the Texas Legislature on February 21, 2017 for consideration during the 85th Regular Session.
In states that have not passed RUFADAA, planning for the disposition of digital assets remains unclear. Most digital assets will be governed by the user’s licensing agreements, which vary over time and between assets. More certainty will likely arise as these assets become more prevalent.
Estate Planning for Digital Assets
Whether or not the Texas legislature adopts RUFADAA, special considerations for digital assets should be included in every estate plan. The attorneys at Farrow-Gillespie & Heath, LLP understand the issues digital assets present and are prepared to help clients address them in a way that is appropriate for each client’s particular situation.
- Peggy H. Keene, Who Gets my iTunes After I Die?, Dallas Bar Association (January 23, 2017)
- Gerry W. Beyer & Naomi Cahn, When You Pass on, Don’t Leave the Passwords Behind: Planning for Digital Assets, American Bar Association, 26 Probate & Property Magazine 1 (2012)
- Fiduciary Access to Digital Assets Act, Revised (2015), Uniform Law Commission
- HB 2158, History, Texas Legislature Online
About the Author
Catherine Parsley was an intern at Farrow-Gillespie Heath Witter, LLP. Ms. Parsley is a law student at SMU Dedman School of Law in Dallas, Texas, where she is a staff editor of the SMU Law Review. Catherine served as a judicial extern for Chief Justice Nathan L. Hecht, of the Supreme Court of Texas. She holds a B.S. in communications studies, cum laude, from the University of Texas at Austin.