Tuesday, February 23, 2016

Digital Assets Recognized by States - Florida Follows

Digital assets come in many ways but seldom fathomed to have any import until a loved one passes.  Our lives are increasingly absorbed by the amount of time spent in cyberspace on cellphones, tablets, computers, and participating in social platforms sharing our lives, including thoughts, photos, and experiences which soon become memories for you and for those you leave behind, yet leaving a digital footprint naked to the eye.  That digital footprint encompasses banking transactions, electronic communications for personal and professional uses, as well for financial interests and investments. We as well store photos, documents, records, wills, trusts physically in a file or bank safe deposit box. While the latter can be retrieved by instruction in a will or trust by a trusted assigned loved one, the former having a digital makeup is not so easily retrievable.  These scenarios have led states to enact fiduciary provisions to follow the Fiduciary Access to Digital Access Act of 2015 (FADAA).[1]
The difficult thus far has been that a digital asset is not easy to define for the sake of valuing.  Digital assets are also not static in nature as technology evolves before our eyes in complexity and reach into our lives, business, and government and its services. Our digital footprint gets more complicated by definition as we include the breaches in our security and services we receive via digital means, i.e., retirement accounts, insurance policies, professional associations, licenses, and accounting.  In 2011- 2012 only 5 states, Idaho, Rhode Island, Nebraska, and Connecticut were embarking on this issue of enhancing the authority of the personal representative to access certain types of deceased digital assets, followed by Indiana.  Indiana’s approach was broad and novel in that it requires the custodian of the electronic information of the deceased to provide it to the deceased’s representative.
Oregon followed in 2013 and was the first to coin the phrase “digital assets” in a legal reference in its statute.    All along the Uniform Law Commission that works on probate provisions among the states for comprising uniform provisions proceeded to organize the effort to among states to promulgate on the appropriate handling of digital assets at one’s passing. In early 2013, the first draft of the FADAA was issued for states to review and for a minimum of twenty to approve the Act.
Now in 2016, twenty states have introduced bills in their respective legislatures on their Fiduciary Access to Digital Assets Act.  Along with this group is Florida introducing Florida Fiduciary Access to Digital Assets Act (FFADAA) as its version.[2]  The purpose of the uniformity movement in this regard is to enhance the ability for executors, of a decedent’s estate, trustees, agents under a power of attorney, and conservators, to as well managing the intangible digital assets left behind.  With this in place, trusted assigned individuals by the deceased can then address the complexities of the decedent’s estate which should appropriately include the digital realm of the decedent’s life.
These authorized individuals will now have to address a laundry list of “aspects”, not just documents, where the decedent interacted; provided appropriate instructions and authorization is explicitly described in either a will, trust, or power of attorney, e.g., website URLs, files housed in hardware, virtual currency, electronic communications, and social accounts.  As this author has previously posted on digital assets and digital legacy, more is to come on this subject embracing notions about administration, definition, liabilities, and service providers.
[1] Fiduciary Access to Digital Assets Act (Draft 2013).
[2] 2016 Florida Legislature, HB747/SB 494 FFADAA.

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