Attorney Kevin Walsh, Estate Planning AttorneyEstate planning traces its roots back to ancient Rome. With the codification of laws and the publication of the Twelve Tables, citizens could familiarize themselves with the law and plan their lives, including the distribution of their estates after their death. Some two-and-a-half millennia later, digital assets would become an important part of estates, and play an important role in our personal and business lives.

A digital asset is defined as “an electronic record in which an individual has a right or interest.” The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record. Hourigan, Kluger & Quinn Estate Planning Attorney Kevin Walsh illustrates the difference: “While an online bank account is a digital asset, the money in the account is a physical asset”.

Examples of digital assets

Digital assets may fall under a number of categories, including but not limited to:

  • Business assets (e.g., blogs and web sites)
  • Cryptocurrencies (e.g., Bitcoin, Litecoin, Tron)
  • Electronic communications (e.g., e-mail, texts, videos, and instant messaging)
  • Financial accounts (e.g., bank, investment, retirement, tax returns, loans)
  • Insurance records (e.g., health insurance, life insurance)
  • Medical records (e.g., doctor, hospital, test results)
  • Online storage (e.g. Google Drive, iCloud)
  • Retail accounts (e.g., PayPal, iTunes, rewards points)
  • Social media (e.g., Facebook, Twitter, Instagram, LinkedIn, YouTube, Zoom)

Until recently, Pennsylvania didn’t have a law that addressed the management, and distribution of digital assets. The lack of such a law could create legal issues for heirs, as state and federal laws make it a crime to access private data or computer systems without permission of the owner. So even if the decedent’s login information is known, permission is still required.

Pennsylvania’s Act 72 of 2020

On July 23, 2020, Act 72 of 2020 was signed into law. Pennsylvania’s version of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) are slated for early 2021. Digital assets can then be treated in the same manner as tangible property.

Pennsylvania’s law provides two ways for the owner of digital assets to authorize a third party to access those assets. The first method involves the use of an “online tool”, an electronic service provided by a digital custodian that allows the owner to express his or her wishes for disclosure of digital assets.

Some digital custodians already provide a mechanism that allow a person to express their preferences with regard to digital assets. Facebook offers a way for you to designate a “legacy contact” – a person who can manage your social media account if you pass away. Google’s Inactive Account Manager enables you to let Google know what to do with your data upon your passing. It can be shared with family and friends or deleted altogether.

The second method for authorizing a third party to access digital assets is for the account owner to give lawful consent to a fiduciary. This is accomplished by using a traditional estate planning document, such as a will, trust, or power of attorney. This method can be utilized by itself, or in conjunction with online tools.

If authorization is granted using both an online tool and estate planning documents, the specific authorization established using the online tool will typically override the general authority granted to a fiduciary. If access is not granted through either method, the custodian’s Terms of Service agreement and federal law will continue to control and, in lieu of a court order, will usually prevent access to digital assets.

Pennsylvania’s RUFADAA distinguishes between two categories of digital assets – the content of electronic communications (e.g., e-mail) and all other digital assets. Unless the decedent previously consented to or a Court specifically authorizes the custodian to divulge the content of electronic communications, the custodian will only be able to grant access to “other digital assets.”

Regardless of the type of assets involved, estate planning is best handled by an experienced attorney. To speak with one of Hourigan, Kluger & Quinn’s estate planning attorneys, call (800) 760-1529.

jelly pixel