Mountain Law: What happens to our “digital assets” when we die? | SummitDaily.com

Mountain Law: What happens to our “digital assets” when we die?

In 2012, beauty queen Sahar Daftary fell to her death from the 12th floor of her ex-lover's apartment in Manchester, England. The death was ruled a suicide, but Daftary's family sued Facebook seeking information from her account that might suggest a different cause. Facebook successfully opposed the disclosure on privacy grounds. The Daftary case illustrates an issue that is gaining more attention — what happens to our "digital assets" when we die?

If you start thinking about the types of digital assets that a person may have, it's staggering. Airline rewards, hotel points, e-mail accounts, social networking accounts, voicemail accounts, digital files, image sharing accounts, iTunes and bitcoin are just a few examples. Some say there are 30 million Facebook accounts belonging to dead people, the average person has 25 digital passwords and more than 2/3 of Americans use social networking sites. And it's likely that new types of digital assets will be created in the future. Some of these assets have value to others after death, economically, emotionally or otherwise. There may also be an interest, on the part of an individual or employer, in keeping these assets private.

Every state has "anti-hacking laws" that prevent unauthorized individuals from accessing digital information. In addition, two federal laws are pertinent: the Computer Fraud Abuse Act and Stored Communications Act. These laws make unauthorized access to digital assets a crime. Beware that most digital assets are governed by a "terms of service agreement" or similar agreement that addresses who may access an account. Many such agreements state that only the named user may access the account. Therefore, a fiduciary such as a personal representative, trustee or agent under a power of attorney, potentially violates state or federal law by accessing a deceased person's account even if the deceased intended to allow such access.

Because of this uncertainty, some survivors, such as the Daftary family, resort to the courts to obtain permission to access accounts after death. It is not well-established whether courts can, or should, grant such permission. In a well-known recent case, the federal government tried to force Apple to unlock a cellphone that was used by a terror suspect in the San Bernardino shooting. Apple opposed providing such access, even after a court order required it to do so, and the government eventually withdrew the request (after claiming it had been able to unlock the cellphone through other means).

Some states, including Colorado, have adopted legislation addressing digital assets

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Some states, including Colorado, have adopted legislation addressing digital assets. Colorado's law, which was adopted in 2016, is known as the Revised Uniform Fiduciary Access to Digital Assets Act. In brief, RUFADAA allows a person to leave directions using an online tool, if available, or otherwise through a written document like a will or trust for accessing or deleting digital assets. Such directions will override any terms of service agreement. Even in the absence of directions, RUFADAA allows a fiduciary to obtain a "catalog" of the digital assets held by any given provider without the need for a court order. RUFADAA absolves the provider from liability for providing digital assets.

Unfortunately, there remain questions about RUFADAA that have yet to be answered. For one, it is not established that it prevents liability under the Computer Fraud Abuse Act and the Stored Communications Act. For another, many terms of service agreements state that they are governed by California law. In that case, does a Colorado law like RUFADAA even apply?

As far as estate planning, the best approach seems to be leaving directions using online tools where available. Sites like Google and Facebook have such tools. It may be advisable to leave an inventory of digital assets with user names and passwords. However, due consideration should be given to how to store this inventory so it is both secure and available to a fiduciary when needed. It's also be advisable to leave clear written directions for how to handle digital assets in case of death or incapacity. Even in our digital world, there's still nothing like a hardcopy written directive with a signed and notarized signature.

Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.