© 2016 Joan E. Emery
It is estimated that by 2050, there will be more Facebook accounts for deceased users than for living users. It has also been estimated that a person now in his or her twenties has a 1 in 4 chance of being disabled for at least 3 months. The interrelationship between digital assets, disability, and death highlights the importance of the Illinois Revised Uniform Fiduciary Access to Digital Assets Act (2015) (the “Act”). My last two blog posts discussed the legislative history of the Act, some key definitions contained in the Act, and a sample of the statutory requirements for a fiduciary to access a user’s digital assets. I will discuss some additional important provisions of the Act and I will reply to the question of whether the Act should scare us.
This discussion will focus on four additional important provisions of the Act. The first of these provisions is Section 3 of the Act. This section describes what the Act does and does not apply to. For example, the Act applies to (1) a fiduciary acting under a will or power of attorney regardless of when it was executed, (2) a personal representative acting for a decedent, regardless of the date of death of the decedent, (3) a guardianship proceeding, regardless of when the proceeding was commenced, and (4) a trustee acting under a trust, regardless of when the trust was created. The Act does not apply to a digital asset of an employer, when used by an employee in the ordinary course of the employer’s business.
Another important provision of the Act is Section 4, which discusses disclosure of digital assets by means of an online tool, a will, trust, power of attorney, other record, or a terms-of-service agreement. According to Section 4, under some circumstances, an online tool trumps all other methods of directing disclosure. For example, if the online tool allows the user to modify or delete the direction at all times, a direction using an online tool overrides a contrary direction in a will, trust, power of attorney, or other record. If the user has not used an online tool or the custodian has not provided one, then the direction in a will, trust, power of attorney, or other record controls. If neither an online direction nor a direction in a will, trust, power of attorney, or other record exists, then the applicable provision (if any) in a terms-of-service agreement will control disclosure.
Section 15 is titled “fiduciary duty and authority” and it seems to focus on two aspects of a fiduciary’s potential duties, namely, (1) access to digital assets stored in the computers of a decedent, disabled person, principal, or settlor, and (2) the ability of a fiduciary to terminate a user’s digital assets account (e.g. email account, Facebook account, etc.).
“Custodian compliance and immunity” is the title of Section 16 and this section governs the custodian’s actions in the following 5 situations:
1. Not later than 60 days after receipt of the information required under Sections 7 through 15, the custodian must comply with the request from a fiduciary or designated recipient to disclose digital assets or to terminate an account;
2. A custodian may notify a user that a request for disclosure or termination has been made;
3. A custodian may deny a fiduciary’s or designated recipient’s request for disclosure or termination if the custodian is aware of lawful access to the account following receipt of the request;
4. A custodian may obtain or may require the fiduciary or designated recipient to obtain a court order which (a) specifies that the account belongs to the disabled person or principal, (b) specifies that there is sufficient consent from the disabled person or principal to support the requested disclosure, and (c) contains a finding required by law other than the Act; and
5. A custodian and its officers, employees, and agents are immune from liability for any act or omission done in good faith, except for willful and wanton misconduct, in compliance with the Act.
What is and what is not scary about the Act? In my opinion, the goal of creating a mechanism which permits a user to specify a fiduciary or designated recipient to administer the digital assets of that user is an excellent goal. However, in my opinion, the scary parts of the Act are the significant complexity to the Act and the numerous protections for custodians included in the Act. Although perhaps not realistic, in my opinion, a simpler version of the Act, focused more on users and their fiduciaries and less on custodians, would be a better (and arguably, not scary at all) version of the Act.
© 2016 Joan E. Emery
The Revised Uniform Fiduciary Access to Digital Assets Act (2015) (the “Act”) can be divided into approximately 5 parts. Those parts are preliminary matters (§§1-6), procedures for disclosure of digital assets (§§7-14), duties and authority of the fiduciary and the custodian (§§15-16), and administrative provisions (§§17-21 – however, at this time, section 17 is blank).
This discussion will focus on the procedures for disclosure of digital assets contained in Sections 7 through 14 of the Act. Sections 7 and 8 address disclosure of digital assets of a deceased user. Sections 9 and 10 are concerned with disclosure of digital assets of a principal under a power of attorney. Sections 11 through 13 are directed at digital assets held in trust. Finally, Section 14 addresses the disclosure of digital assets to a court appointed guardian. For a probate estate, an agency relationship under a power of attorney, or a trust, the disclosure of digital assets is divided into two parts – disclosure of content of electronic communications and disclosure of other digital assets. “Content of an electronic communication” is defined in Section 2 of the Act as “information concerning the substance or meaning of the communication which (A) has been sent or received by a user; (B) is in electronic storage by a custodian providing an electronic-communication service… or providing a remote-computing service…; and (C) is not readily accessible to the public.” Section 2 of the Act also defines a “digital asset” as “an electronic record in which an individual has a right or interest.”
If a fiduciary is seeking disclosure of digital assets, it is absolutely necessary to read the statute carefully, because the disclosure requirements can be quite extensive. As an example, let’s look at Section 7 of the Act which contains the longest list of disclosure requirements. Section 7 controls disclosure of the contents of electronic communications of a deceased user.
Section 7 of the Act contains the following requirements, which must be complied with in order for the custodian to disclose the contents of electronic communications to the personal representative of a deceased user’s estate:
A. The deceased user consented to the disclosure; or
B. A court directs disclosure; and
C. The personal representative gives the custodian:
(1) A written request for disclosure in physical or electronic form;
(2) A certified copy of the death certificate of the user;
(3) A certified copy of the letter of appointment of the personal representative or a court order;
(4) Unless the user provided direction using an online tool, a copy of the user’s will, trust, power of attorney, or other record evidencing the user’s consent to disclosure of the contents or electronic communica-
(5) If requested by the custodian, the personal representative provides:
A) A number, username, address or other unique subscriber or account identifier assigned by the custodian to identify the user’s account;
B) Evidence linking the account to the user; or
C) A finding by the court that:
i) The user had a specific account with the custodian, identifiable by the information specified in subparagraph A);
ii) Disclosure of the content of electronic communications would not violate 18 U. S. C. Section 2701 et seq., as amended, 47 U. S. C. Section 222, as amended, or other applicable law;
iii) Unless the user provided direction using an online tool, the user consented to the disclosure of the content of electronic communications; or
iv) Disclosure of the content of electronic communications of the user is permitted under this Act and [is] reasonably necessary for the administration of the estate.
In order to determine which documents must be presented to the custodian, the first question which must be asked is, What constitutes consent to disclosure of the contents of electronic communications by the deceased user? It appears that the grant of a broad power to the fiduciary to administer the deceased user’s assets is not sufficient, and, instead, the digital asset powers granted to the fiduciary must specifically described or defined. Arguably, the simplest way to describe or define the digital asset powers granted is to refer to the Act and perhaps even to various provisions of the Act. Second, if the deceased user did not consent to the disclosure of the contents of electronic communications by using an online tool or by providing specific consent in his or her will, trust, power of attorney, or other record, can the custodian disclose this information? In the absence of consent, Section 7 appears to require that a court order must direct disclosure and must contain specific findings, including findings that disclosure is permitted under the Act and is reasonably necessary for the administration of the estate.
© 2016 Joan E. Emery
There are 19 states which have some form of access to digital assets law. Illinois became one of those states on August 12, 2016 when Governor Rauner approved House Bill 4648. This new Illinois law is a significant step forward in the process needed answer questions such as, What constitutes a digital asset? and Who owns or controls those digital assets? The Illinois Revised Uniform Fiduciary Access to Digital Assets Act (2015) (the “Act”) has a somewhat strange name apparently because the Uniform Fiduciary Access to Digital Assets Act was first presented in Senate Bill 1376, which was introduced on February 28, 2015. Senate Bill 1376 passed the Illinois Senate on April 22, 2015, but did not pass the Illinois House and “died’ in the Rules Committee. After the failure of Senate Bill 1376, House Bill 4648 was introduced on February 2, 2016. House Bill 4648 named the potential new act the “Revised Uniform Fiduciary Access to Digital Assets Act (2015),” apparently to distinguish it from the original proposed act and perhaps to link the new proposed act to the prior proposed act.
HB 4648 provided specific procedures and requirements for the access to and control by guardians, executors, agents, and other fiduciaries of the digital assets of persons who were either deceased, under a legal disability, or subject to the terms of a trust. Unlike SB 1376, HB 4648 was more or less “fast tracked.” HB 4648 passed the House on April 22, 2016. A Senate amendment was added to the bill and, as amended, the bill passed the Senate on May 24, 2016. The bill then went back to the House for consideration of the Senate amendment and the House concurred in the Senate amendment on May 29, 2016. The bill was sent to the Governor on June 27, 2016. On August 12, 2016, the bill was approved by Governor Rauner and became Public Act 99-0775.
The Act is 8 pages of single-spaced text, so there’s plenty to read. The Act has 21 separate sections and Section 2 of the Act contains 27 definitions. I will devote several blog posts to this new Act, since there is significant new information to digest. This blog post will focus primarily on the definitions contained in the Act. These definitions specify what is and what is not included within the scope of the Act.
The Act’s 27 defined terms are the following: account; agent; carries; catalogue of electronic communications; guardian; content of electronic communications; court; custodian; designated recipient; digital asset; electronic; electronic communication; electronic communication service; fiduciary; information; online tool; person; personal representative; power of attorney; principal; person with a disability; record; remote-computing device; terms of service agreement; trustee, user; and will.
In my opinion, 10 of the most important definitions are catalogue of electronic communications, custodian, digital asset, electronic communication, fiduciary, information, person, record, remote-computing service, and user. A summary of the definitions of these 10 terms is as follows:
1. Catalogue of Electronic Communications – information that identifies each person with whom the user has an electronic communication, including the time and date of the communication and the electronic address of the person;
2. Custodian – a person who carries, maintains, processes, receives, or stores a digital asset of a user;
3. Digital Asset – an electronic record in which an individual has a right or interest;
4. Electronic Communication – as defined at 18 U. S. C. §2510(12), as amended. 18 U. S. C. §2510 is part of the Electronic Communications Privacy Act of 1986. Section 2510 contains definitions. Section 2510(12) defines “electronic communication” as a transfer of signs, signals, writing, images, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce;
5. Fiduciary - an original, additional, or successor personal representative, guardian, agent, or trustee;
6. Information – data, text, images, videos, sounds, codes, computer programs, software, databases, “or the like;”
7. Person – an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency or instrumentality, or other legal entity;
8. Record – information inscribed on a tangible medium or stored in an electronic or other medium that is retrievable in perceivable form;
9. Remote-Computing Service – a custodian that provides to a user computer-processing services or the storage of digital assets by means of an electronic communications system, as defined in 18 U. S. C. §2510(14), as amended. Section 2510(14) defines “electronic communications system” as any wire, radio, electromagnetic, photooptical, or photoelectronic facilities for the transmission of wire or electronic communications and any computer facilities or related electronic equipment for the electronic storage of such communications; and
10. User – a person who has an account with a custodian.
Although these definitions are sometimes convoluted, the obvious intent of the Act is to create specific mechanisms by which a trustee, agent under a power of attorney, guardian, executor, or other personal representative can access and administer the digital assets of a person who can no longer administer those assets for himself or herself. Next time I will discuss some of the specific procedures and requirements for the access to and control of digital assets by guardians, power of attorney agents, executors, and other fiduciaries.
I am an attorney practicing in the Chicago area.