Bryan Kirk, managing director and trust counsel at New York-based Fiduciary Trust Company International, notes that the definition of digital assets can expand to encompass mobile phone log-ins, online photos, digitally recorded music or in-process writings such as books, even if we might tend to think of it as merely encompassing e-mail and social media accounts.
“Digital assets can be easy to miss, and there’s a lot of them,” says Kirk. “Finding them takes a bit of a needle-in-a-haystack approach, because some of the key things for a person’s trustee or executor may be buried in a lifetime’s worth of e-mail, or thousands of files on a hard drive. Identifying what’s important and what has value to the client is something that financial advisors can do to help make sure there’s proper planning around those assets as well.”
In New Jersey, fiduciaries will not be able to access online communications accounts, including e-mail and social media accounts, unless the original user consents via a will, trust or power of attorney.
Under the law, fiduciaries will be able to access other digital assets by filing requests with the custodians of those assets and proving their fiduciary relationship to the original asset holder.
“It’s such a new law that the practicalities of that process, how it works, how requests are communicated, how promptly folks respond—that all needs to be sorted out,” says Kirk. “From a fiduciary standpoint, there’s still a question of how deep do I go into the digital assets, and how deep do I have to go. If there’s something in my decedent’s estate only available via e-mail, or buried on a hard drive, am I on the hook if I don’t dig deep and find it?”
The movement toward protecting digital assets started in the last decade but did not gain traction until recently, says Anthony Stich, director of global marketing at Milwaukee-based Advicent solutions.
A Movement
“The first law was very early, right around 2005, but it became a movement in 2013 and 2014,” says Stich. “These laws place the onus on the estate, or the person designated in the will. We think there will still be a technological solution, where technology will prompt a user to check a box that will allow a designated third party to access and distribute their electronic data.”
Stich says that such technology is already being used in the medical field, where privacy regulations require providers to restrict access to patients’ medical records. Among social media providers, Facebook has a “legacy” function allowing users to designate parties responsible for their accounts in case the users die or become incapacitated.
Most of the 24 states with laws concerning the handling of digital assets have adopted the uniform act, draft legislation from the National Conference of Commissioners on Uniform State Laws, with very little variance from state to state.