CA Revised Uniform Fiduciary Access to Digital Assets Act
In today’s world, many people have digital assets worth hundreds of thousands or even millions of dollars. However, the biggest problem with digital assets is their accessibility. When you pass away or become incapacitated, your digital assets could be lost forever if your heirs are unable to access them or they do not know about their existence in the first place.
Digital assets have become an essential part of our legacy, which is why it is important to plan accordingly. Skilled legal guidance can be a tremendous help in these situations. Attorney Rodney Gould can guide you toward crafting a comprehensive estate plan that safeguards all of your assets, including digital ones.
The attorney at Law Office of Rodney Gould serves individuals and families in Los Angeles, California, and in the surrounding area, including Beverly Hills, Sherman Oaks, Studio City, and West Hollywood. Set up a consultation today.
Understanding Digital Assets
According to a press release by the White House in September 2022, an estimated 16% of American adults had purchased digital assets—but the number is expected to grow significantly every year.
The increase in our reliance on technology, from financial transactions to social media to storing photos and other memories, presents some legal complications for the law. For instance, what happens to our digital assets after we pass away? These are often password-protected and only accessible by the account holder. This is why California adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which took effect on January 1, 2017.
Overview of CA-RUFADAA
The RUFADAA allows a fiduciary of a decedent to have authority over his or her digital assets, with some limitations in place. A fiduciary is a person appointed to manage someone else’s property and assets in their best interests. An example of a fiduciary can be a personal representative of the estate or a trustee.
The Act intended to grant fiduciaries authority to manage digital assets while still attempting to protect the privacy of the owner of the digital assets and the custodians of the digital assets, such as those who store or provide the digital assets. A fiduciary may be specifically authorized to access an account through a will, trust, or power of attorney. If not specifically provided for in one of these legal documents, a custodian of a certain digital asset may review the terms of service to verify whether it is appropriate to grant a request to access a certain account.
The RUFADAA restricts a fiduciary’s access to certain elements of digital assets, including the contents of electronic communications like emails and private chats. If a fiduciary does not have access to a particular digital asset, they will need to petition the court and explain why they need access.
Before RUFADAA, it was difficult to figure out who would have the legal right to access the digital assets of a deceased or incapacitated individual. Additionally, other problems arose, such as the fact that if an individual passed away or became incapacitated and failed to leave a list of all usernames and passwords, then no one would have the ability to access the digital assets. This led to the loss of valuable digital assets as they would be deleted by the company controlling them or left to linger in cyberspace.
Estate Planning for Digital Assets
While RUFADAA is a major step towards making digital assets accessible to your fiduciaries after you pass away or become incapacitated, it may not be a good idea to rely on this law alone. Planning for your digital assets is just as important as planning for your more tangible assets, which is why it would make more sense to set up an estate plan that takes your digital assets into account.
When granting the personal representative access to digital assets, you must leave detailed instructions about how to gain access to the necessary accounts or files. When the instructions are not clear enough, the fiduciary will have to jump through some hoops to get access.
Leave specific instructions regarding your usernames, passwords, and how to access your accounts. Be clear on what your fiduciary is supposed to do with each asset. Keep these instructions along with your other important estate planning documents.
The Importance of Working With an Attorney
Many people do not understand the complications involved when it comes to making plans to ensure that someone they trust can gain access to their digital assets. Attorney Rodney Gould can help you navigate the complexities of digital asset estate planning and ensure that your assets are adequately protected. Get in touch now to set up a free case evaluation.