cyber estate planning and administration · cyber estate planning and administration presented by:...

CYBER ESTATE PLANNING

AND ADMINISTRATION

Presented by:

Gerry W. Beyer

Governor Preston E. Smith Regents Professor of Law

Texas Tech University School of Law

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Overview of Presentation

• What are “digital assets” and “digital estates”?

• The importance of planning for these assets.

• How user policies impact the planning process.

• How Federal law impacts the planning process.

• Methods to plan for digital assets.

• Obstacles to planning for these assets.

• Fiduciary access to digital assets.

• Thoughts for the future.

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Poll Question 1

How would you rate your current experience with planning and administering digital assets?

A. None

B. Just a Little

C. Some

D. Extensive

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Definition of Digital Assets

“Text, images, multimedia information, or

personal property stored in a digital format,

whether stored on a server, computer, or other

electronic device which currently exists or may

exist as technology develops, and regardless of

the ownership of the physical device upon

which the digital asset is stored. Digital assets

include, without limitation, any words,

characters, codes, or contractual rights

necessary to access the digital assets.” [proposed

Oregon statute]

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Digital Assets -- Personal

• Types of Files:

– Documents – word processing, pdf, etc.

– Photos

– Music (mp3)

– Videos

– Spreadsheets

– Tax records and returns

– PowerPoint presentations

– e-mail and text messages

– e-books

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• Location of files:

– Computer

– Smart phone

– Tablet

– e-reader

– Camera

– Memory cards or USB flash drives

– CDs and DVDs

– Online in the cloud

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• Gaining access:

– Password to start device.

– Password to access operating

system.

– Password to open document.

– Password to access website

where material stored.

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Digital Assets – Social Media

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Digital Assets – Financial Accounts

• Examples:

– Bank accounts

– PayPal

– Bitcoin

– Investment and brokerage accounts

– Utility bill payment (water, gas, telephone, cell phone, cable, and trash disposal)

– Loan payments (mortgage, car, etc.)

– IRS e-filing

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Digital Assets – Business Accounts

• Examples:

– Customer information databases (names,

addresses, credit card numbers, order

history, pending orders, etc.).

– Inventory.

– Client records (attorney, CPA, etc.).

– Patient records (physicians, dentists, etc.).

– eBay accounts.

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Digital Assets – Internet Sites

• Domain Names

• Blogs

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Digital Assets – Loyalty

Program Benefits

• Examples:

– Frequent flyer points.

– Credit card “cash back” or “reward

points”

– Business “points,” discounts, or

vouchers.

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Digital Assets -- Others

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Importance of Planning

• 1. Make things easier for your family and

executor when you die or become disabled.

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• 2. Prevent identify theft.

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• 3. Prevent Loss to Estate

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• 4. Avoid Losing the Deceased’s

Story

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• 5. Protect Secrets from Being

Revealed

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Poll Question 2

Have you made plans for your own

digital assets upon death or incapacity?

A. Yes

B. Maybe – I don’t remember

C. No

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Deceased User PoliciesTerms of Service

• May govern what happens upon

death.

• Did decedent really know or agree?

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Deceased User PoliciesOwnership vs. License

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Federal LawThe Acts

• Stored Communications Act

• Computer Fraud and Abuse Act

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Federal LawInterface with User Agreements

• Agreements often prohibit user from

granting others access to account.

• Thus, revealing user name and

password may be in violation of federal

statutes prohibiting access without

lawful consent.

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Federal LawInterface with User Agreements

• Some proposed statutes provide that

they supersede any contrary provision

of the user agreement.

• Raises issues such as:

– Interference with contract rights.

– Are terms of service against public policy

and thus unenforceable?

– Effect of choice of law provisions.

– Constitutionality of such provisions.

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Planning Suggestions

• 1. Specific Disposition According to

Provider’s Instructions

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• 2. Backup to Tangible Media

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• 3. Prepare comprehensive inventory

– Sample Form 1 (Beyer)

– Sample Form 2 (Lamm)

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http://professorbeyer.com/Digital_Assets/Digital_Estate_Information_Form_(revised_10-18-2013).pdf

http://www.digitalpassing.com/wordpress/wp-content/uploads/2012/08/DigitalAudit.pdf


• 3. Comprehensive Inventory -- Storage

– Trusted person

– Encrypted

– Safe deposit box

– Online password storage

– Warning: Potential of violation of federal law:• Stored Communications Act

• Computer Fraud and Abuse Act

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• 4. Provide Immediate Access

to Portions of Digital Estate

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Same warning as previous

suggestion if service not designed

for multiple users.


• 5. Authorize Agent to Access

Digital Assets

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• 6. Digital Asset Trust

– Client transfers digital asset to trust

• Digital asset must be transferable

• Practical for valuable assets

• Perhaps useful for license-based assets that expire

upon “death”

– Digital asset titled in the name of trustee of the

trust.

– Upon client’s death or disability, trustee handles

the asset according to the client’s stated

instructions.

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• 7. Will

– Do not include user names and passwords

as will becomes public record.

– Useful to transfer digital asset upon death

if transferable.

– Grant executor access to digital assets.

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• 8. Online Afterlife Company

– Storage for user names and passwords.

– Send messages upon death.

– Send messages thereafter.

– Warning: Must use due diligence to

investigate. Can they do what they claim and

will they be in existence when needed?

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Poll Question 3

How many of these techniques will you

now consider using?

A. None

B. 1

C. 2 or 3

D. 4 or more

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Obstacles to Planning

• 1. Safety

– Computer or papers can be stolen.

– Encryption can be broken.

– Internet storage can be hacked.

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• 2. Hassle -- Information changes rapidly:

– Accounts opened.

– Accounts closed.

– Passwords change.

– Equipment is bought and sold.

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• 3. Uncertain Reliability of Afterlife

Companies and Ability to do What

Promised

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• 4. Potential Federal Law Limitations

– Can a fiduciary force a turnover?

– Will provider disclose voluntarily?

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Sahar Daftary

Fiduciary Access to Digital

Assets

• 1. First Generation State Law

– E-mail coverage only

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Connecticut has now

enacted RUFADAA.

RUFADAA is pending

in Rhode Island.

California has enacted

the executor/administrator

and trust portions of

RUFADAA.


Assets

• 2. Second Generation State Law

– Records stored electronically

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Indiana has

since enacted

RUFADAA.


Assets

• 3. Third Generation State Law

– Broader coverage to include social media

and microblogging

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Idaho has since

enacted

RUFADAA.RUFADAA is pending

in Oklahoma.

RUFADAA is pending

in Louisiana.


Assets

• 4. Specialized State Legislation

– Only if deceased account holder is a minor.

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Fiduciary Access to Digital Assets

• 5. Uniform Fiduciary Access to Digital

Assets Act

– Approved by NCCUSL on July 16, 2014

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Assets


Assets Act

• Applies to agents, guardians, trustees, and

personal representatives.

• These fiduciaries would have default access

unless person expressly provided otherwise.

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Assets Act

• Enacted by Delaware effective Jan. 1, 2015.

• Introduced in 26 other states and failed in all.

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Assets Act

– Potential problems with UFADAA

• Privacy concerns

• Federal law concerns

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• 6. Privacy Expectation Afterlife and

Choices Act

– Disclosure of existence of account after PR

obtains a court order that records needed to

resolve fiscal estate assets.

– Disclosure of contents of account after PR

obtains court order that decedent’s will or

product settings expressly consented to

after-death disclosure.

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• 6. Privacy Expectation Afterlife and

Choices Act

– Act does not address access by other

fiduciaries (e.g., agents, guardians,

trustees, conservators, etc.).

– Virginia is first (and so far only) state to

enact a version of PEAC.

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Assets

• 7. Revised Uniform Fiduciary Access

to Digital Assets Act

– In response to failure of states to enact

UFADAA and industry opposition,

UFADAA revised.

– Substantial rewrite approved July 2015.

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Assets



– Executors and administrators no longer

have default access to e-mail contents.

– Instead, access only if the decedent

consented to disclosure.

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Assets



– Encourages use of on-line tools such as

Facebook’s Legacy Contact and Google’s

Inactive Account Manager.

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Assets

• 7. Revised Uniform Fiduciary Accessto Digital Assets Act

– Priority order for access:1. On-line tool directions.

2. Directions in will, trusts, power of attorney, or court order appointing guardian.

3. Terms of service (which likely say no access).

Note: Terms of service prohibiting access to fiduciaries

no longer deemed against public policy.

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Assets



– Endorsements• Association of American Retired Persons

• Center for Democracy and Technology

• Facebook

• Google

• National Academy of Elder Law Attorneys

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Assets• 7. Revised Uniform Fiduciary Access


– 2016 Introductions (enactments in green)

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Alabama Iowa New York Washington

Arizona Louisiana North Carolina West Virginia

Colorado Maine Oklahoma Wisconsin

Connecticut Maryland Oreg0n Wyoming

Florida Michigan Pennsylvania

Hawaii Minnesota Rhode Island Calif. (partial)

Idaho Mississippi South Carolina

Illinois Nebraska Tennessee

Indiana New Jersey Utah

Poll Question 4

After this session, I will begin discussing

digital assets with:

A. All or most of my clients

B. Some of my clients

C. A few of my clients

D. None of my clients

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Thoughts for the Future

1. Amend federal statutes

2. Enact comprehensive state legislation

3. Providers gather user’s actual

preferences

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Moral

• Despite uncertainties, the prudent estate

planner should plan for a client’s digital

assets.

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Discussion

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