New Jersey Enacts Uniform Fiduciary Access To Digital Assets Act

by Cole Schotz
Contact

New Jersey recently enacted the Uniform Fiduciary Access to Digital Assets Act (the “Act”).  See the Act here.  In general, the Act provides executors, trustees, guardians, and power of attorney holders (“fiduciaries”) with the ability to access and control “digital assets” belonging to decedents, beneficiaries and wards.  The term “Digital Asset” is broadly defined under the Act as any electronic record, and includes e-mail accounts, social media accounts, virtual currency accounts (e.g., Bitcoin), domain names, blogs, photos and videos posted to the internet, music sharing services, cloud based storage accounts and more.

Obtaining Access to Digital Assets

Basically, the Act acknowledges that an individual has a property right in his or her digital assets, and permits an individual to designate a fiduciary to manage those assets.  The terms-of-service agreements (“TOSA”) used by many companies that store digital assets (e.g., Facebook or Yahoo), which are called “Custodians” under the Act, provide that an individual’s account is non-transferrable and terminates at death.  The Act essentially overrides the TOSA and allows individuals to authorize fiduciaries to access their accounts by serving a request and proof of authority on a Custodian.

Among other things, the Act seeks to address situations where a family member or loved one is denied access to a decedent’s account because the Custodian refuses to allow it.  For example, in a well-publicized case (In re Estate of Ellsworth, No. 2005-296, 651- DE (Mich. Prob. Ct. May 11, 2005), the family of a U.S. Marine killed in Iraq successfully sued Yahoo in a Michigan probate court for access to the decedent’s e-mail account.  Such a lawsuit now could be avoided under the Act in New Jersey if the decedent had authorized access during life.

The Act contains detailed procedures for obtaining or restricting access to digital assets.  First, a designation in an “Online Tool” (i.e., a tool provided by a custodian allowing an individual to grant or deny access) has priority over any designation contained in an individual’s estate planning documents or the TOSA.  If the individual does not use an Online Tool (or the Custodian does not offer one), then any direction contained in the individual’s estate planning documents controls.  If there is no Online Tool designation or direction contained in estate planning documents, then the Custodian’s TOSA will control.  See Section 4 of the Act.  Thus, an individual can specify which digital assets may be preserved for posterity, and those he or she prefers to take to the grave.

The Act does not apply to any digital asset of an employer used by an employee in the ordinary course of business.

Steps to consider

Individuals may now wish to consider:  (1) creating an inventory of their digital assets, which may include valuable domain names or virtual currency accounts; (2) using Online Tools to grant fiduciary authorizations or ensuring that estate planning documents include a specific grant of authority to access digital assets; and, (3) specifying any digital assets that they do not want fiduciaries to possess or ascertaining that the terms of the TOSA will suffice to achieve the desired restriction.

Obligations of fiduciary

The Act requires fiduciaries to act in a manner that is consistent with the individual’s wishes, and they cannot engage in conduct that violates the scope of authority provided to them.  Moreover, fiduciaries have a duty to marshal and preserve digital assets within their control and could, presumably, be held accountable for waste or mismanagement.

In sum, the Act modernizes New Jersey law by expressly recognizing and clarifying the rights and obligations of fiduciaries and individuals with respect to digital assets.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cole Schotz | Attorney Advertising

Written by:

Cole Schotz
Contact
more
less

Cole Schotz on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.