Tax, Trusts, and Estates Client Alert

Many of us have digital assets.  Until now, the fiduciary you selected in a Will or other document may not have had the legal right to obtain, manage or distribute those assets.  Even if you had a Will or similar document prepared within the past few years, it probably did not contain provisions which gave your fiduciary the right to carry out your wishes with respect to digital assets.  New Jersey recently adopted the Uniform Fiduciary Access to Digital Assets Act (the “Act”).

We call your attention to key ways in which the Act affects you, your family, your assets, and your estate planning.  Please contact the Firm to discuss best practices for incorporating this new development into your estate planning instruments.

• The Act authorizes fiduciaries, agents under a Power of Attorney, guardians, trustees, or executors of estates to manage digital assets in the same way they have authority to manage traditional, tangible assets.

• The Act defines a digital asset as “an electronic record in which an individual has a right or interest.” What does this mean to you?  Digital assets include your online financial accounts, email accounts, social media accounts, computer files, web domains, and virtual currency.

• The Act does not apply to digital assets of an employer used by an employee. For example, your work email account would not be able to be accessed by your fiduciary.

• Under the Act, fiduciaries are bound by the same fiduciary duties that normally apply to management of tangible assets. For example, an executor would violate his or her duty by publishing a decedent’s confidential communications.

• In order to gain access to digital assets, the fiduciary must send a request to the custodian with a copy of the document granting fiduciary authority. If you wish to grant your fiduciary access to these types of assets, it is important you contact us to update your estate planning instruments.  The Act will go into effect on December 12, 2017.

• In addition to updating your estate planning instruments to authorize a fiduciary to manage your digital assets under the Act, some service providers (Facebook, Google, etc.) directly allow you to appoint someone to have access to your digital assets. This is similar to a beneficiary designation under a Life Insurance Policy, IRA or similar asset, and is referred to as a “user tool”.