The New ‘Uniform Fiduciary Access to Digital Assets’ (UFADA) Act
Last year I wrote an Introduction to Estate Planning for Digital Assets. One of the issues I highlighted is the lack of legal guidance addressing a fiduciary’s ability to access to digital assets. I noted that the Uniform Law Commission had formed a committee that was drafting model legislation known as the “Uniform Fiduciary Access to Digital Assets” (UFADA) Act. This committee has now concluded its work through a final vote approving UFADA on July 16, 2014. (though apparently the ULC ‘Committee on Style’ still has to review and edit before it is officially final)
The final draft was the product of collaboration among diverse interest groups, including attorneys, internet service providers, banking interests, and consumer rights and privacy groups (read the ULC press release here). This is good news. It will be even better news when states (hopefully) begin considering and enacting this model legislation (read UFADA here). A uniform act is not a law in itself, but is intended to serve as a model for state legislatures to enact. To date, just seven states have digital asset statutes (Illinois is not one of them). Most of them are either weak or unclear, and they lack uniformity and consistency.
UFADA is intended to apply to four different types of fiduciaries:
- Guardians (aka conservators) for disabled persons;
- Agents acting under a power of attorney for property;
- Executors of a decedent’s probate estate; and
- Trustees serving under a living trust or trust agreement.
As explained in the Committee’s Prefatory Note to the prior draft, “the purpose of this act is to vest fiduciaries with the authority to access, control, or copy digital assets and accounts.” The goal is to remove barriers to access, such as outdated data privacy laws and restrictive terms of service agreements, to enable a fiduciary to stand in the shoes of the original account holder. The act does not, however, address the ownership or transfer of underlying assets or accounts. That determination remains left to contract, property and estate laws.
The Committee further explains that “the general goal of the act is to facilitate fiduciary access while respecting the privacy and intent of the account holder.” Thus, the model legislation permits an account holder to alter the default rules of access in a Will or Trust. With respect to agents under a power of attorney for property, the POA must expressly grant access. For guardians, the court must specifically grant authority by court order.
Best practices for estate planning purposes remains the same, as explained in my introductory post last year:1. Make a dynamic inventory of your digital accounts and assets; and 2. Include digital asset provisions in estate planning documents. We now await consideration and adoption by Illinois and other states, and I will update as legislation progresses. The commentary I have seen is generally positive that the legislation will be widely adopted over the next couple years. Hopefully — for purposes of uniformity — states will generally enact the legislation as is, rather than creating a patchwork of differing state laws, which would make it difficult for compliance in an online world that often lacks clear state borders.