RUFADAA is a law that governs access to the online accounts of a user when that person loses the capacity to manage these accounts or dies. It guides fiduciaries and technology companies on how to handle the digital assets of deceased users and account holders. Fiduciaries are persons appointed by law to manage the properties of other persons and are subject to strict requirements to act in the principal's best interests.
The RUFADAA extends the power of fiduciaries beyond managing tangible assets to include the management of digital assets. It allows fiduciaries access to digital property, such as web domain, computer files, digital accounts, and electronic currencies. However, the act restricts fiduciary access to the client's electronic communication assets, such as text messages, email, and social media accounts unless the owner explicitly consented to fiduciary access through a trust, will, power of attorney, or other written record.
The Legal Problems Posed by Digital Assets
Most Americans have one form of digital asset or other that they use to communicate or perform basic tasks such as shopping or paying bills. Over time, people can accumulate many digital assets, such as account subscriptions and social media accounts without thinking about long-term management.
The problem is that until recently, there were very few laws that explicitly stated who could access these accounts and files in the case where the user died or became incapacitated. If the deceased or incapacitated person had wanted their digital assets to be modified, deleted, or shared among loved ones, it was hard to determine who had the legal right to access and manage them.
Unless the owner had shared the usernames and passwords, it would have been impossible for the fiduciary to access them. However, such access did not amount to legal authority and violated the custodian's terms of service, which did not permit the transfer of ownership.
Consequently, most digital assets were often deleted by the custodians or would continue to exist on the internet long after the owner had died or become incapacitated. Such assets would remain inaccessible to the family and associates of the deceased owner.
This vacuum in the law caused suffering to the relatives of deceased persons who wanted to access cherished items that were part of the deceased's online legacy. It also caused problems to the people charged with the responsibility of wrapping up the deceased's estate. In most cases, family members would endure delays, frustrating pushbacks, and even loss of valuable assets or information due to the protracted legal framework. This prompted the Uniform Law Commission (ULC) to begin developing a legal code that would address this problem in 2012.
Who Created the RUFADAA?
The RUFADAA is a legal framework developed by the ULC to provide fiduciaries, such as attorneys-in-fact and executors with a legal framework, to manage the digital assets of incapacitated or deceased principals. The legal practitioners at the ULC wanted states to adopt the act as a guide to be used within their jurisdictions. Several states have already enacted the law or are in the processing of ratifying it.
The RUFADAA confers fiduciaries with limited powers to control digital assets on behalf of the principals. The act also provides privacy protections for the owners of the digital assets and legal protections for the custodians. Further, the custodians are primarily tech companies that create, manage, and store digital assets on behalf of clients. It was hard for the ULC to balance between the interests of the principals, the fiduciaries, and the custodians. They created the first draft that failed to resonate with the state authorities and had to revise it to produce a draft law whose provisions minimally satisfy the interests of all parties.
The UFADAA First Draft
The preliminary form of the fiduciary access law was called the Uniform Fiduciary Access to Digital Access Act (UFADAA) and was completed in 2014. The makers of the UFADAA thought it was wise to grant estate agents and executioners the same access to the principal's or decedent's digital assets as they had with a traditional property. This meant that the owners could decide what to do with their digital assets in the same way they do with other assets and that fiduciaries could take control once the owner becomes incapacitated or died.
The UFADAA provided that the executioner or personal representative could have the same rights to the principal's personal accounts as the deceased had when alive or mentally sound. This implies that if the fiduciary wanted the deceased's passwords or login details, they could ask the custodian to grant access, and the company would be obliged to comply. This arrangement would have given executors access to digital assets that would have enabled them to wrap up the deceased's assets expeditiously. They could use the access to archive emails, delete photos, modify or delete social media accounts, cancel subscriptions, and pay final bills before closing or modifying accounts.
However, the UFADAA attracted strong opposition from tech companies and privacy advocacy groups. They argued that most of the provisions of the act contravened privacy and liability laws. In particular, granting executors access to the deceased's digital assets would:
- Violate the dead person's privacy in ways that the deceased would not have envisaged or accepted.
- Contravene the privacy of third parties who may have communicated or shared information with the account owner
- Constitute a dereliction of duty by companies that had promised to keep user accounts secure
- Misappropriate digital property, which differs substantially from traditional assets under the care of executors.
- Violate the privacy provisions in the federal law
The tech companies also noted that several provisions in the UFADAA contravened federal privacy laws as well as federal and state computer fraud laws. They also observed that the UFADAA had effectively overwritten the terms of service agreements (TOSAs) that users consent to when opening new digital assets accounts. Most TOSAs explicitly state that digital assets are not transferable and create strong mechanisms for preventing unauthorized access to user accounts. The UFADAA would have given executors unfettered access to principal's accounts, which is contrary to TOSA.
Further, the UFADAA's attempt to treat digital assets in a similar manner to traditional assets raised the issue of personal privacy. Privacy advocacy groups noted that people have different expectations of digital assets than traditional assets. For instance, principals would have expected executors to access physical files in drawers but may have been reticent to allowing other people to see email messages or photos stored online.
In 2015, the UFADAA was proposed by state lawmakers in several states, but most states succumbed to pressure from tech companies and privacy advocacy groups. Consequently, only Delaware enacted the original law. This turn of events forced the ULC to revise the proposed digital assets law.
The Revised UFADAA or RUFADAA
The RUFADAA provides a hierarchy of instructions on how the deceased's digital assets should be managed in case the fiduciary seeks access. It requires custodians to create an 'online tool' that acts as a digital power of attorney, specifying who has control or access to a specific site if the user dies or becomes incapacitated. The act also provides a legal framework on how digital asset rights will be stated in traditional legal documents such as wills or trusts. It is only in the absence of the online tool or legal document that the custodian's TOSAs takes control.
The revised law differs from the UFADAA in that it substantially reduces the ability of an executor to access the principal's digital assets. The main changes include:
- The executor no longer has access to the content of electronic communications such as tweets and private email unless the deceased principal explicitly consented to the disclosure.
- Executors can access the other categories of digital assets but must first obtain a court petition and explain to the court why they need the asset to wrap up the deceased's estate.
- If the executor lacks explicit permission to access the digital assets through a trust, will, or power of attorney, the custodians can refer to the TOSAs to determine if they have the discretion to comply with the request for access to the deceased user's personal accounts.
- Custodians now have several ways of preventing fiduciaries from accessing user accounts. They can demand court orders or charge fees for complying with access requests. Companies can also limit compliance to a minimum by providing access to only those assets that are absolutely necessary for wrapping up the principal's assets or reject unreasonable and burdensome requests.
- Custodians are not obliged to grant access to joint or deleted accounts.
The Future of RUFADAA
It is likely that RUFADAA will be endorsed by most states as over 40 states have already adopted it. The Fiduciary Access to Digital Assets Act, Revised page on the ULC website provides an enactment map that you can use to check if your state has ratified the law. Even though the RUFADAA has clarified how to handle digital assets after a person's death, hiccups are expected when implementing the law. That is why you should state explicitly in the power of attorney or will if you want your fiduciary to access your digital assets.
Please contact our office for a free consultation regarding your digital assets.
For more information please request a copy of our Legal Services Schedule (PDF format).
