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Florida Passes Fiduciary Access to Digital Assets Act

Clients should consider updating their estate plans to reflect new law

On March 10, 2016, the Governor of Florida signed into law the Florida Fiduciary Access to Digital Assets Act (the Act). Prior to the Act, Florida, along with many other U.S. states, didn’t have laws that specifically addressed the access or disposition of an individual’s digital assets (for example, electronic records such as emails, text messages, online photographs, social media accounts and other forms of electronic records or communications), either during their incapacity or upon death resulting in custodians denying fiduciaries access to digital assets pursuant to either the terms-of-service agreements or U.S. federal laws that protected against such disclosure. Thus, the general purpose of the Act is to give Florida-resident Internet users the ability to plan for the management and disposition of their digital assets if they should die or become unable to manage their assets by vesting authorized fiduciaries with the authority to access, control or copy digital assets and accounts.

Meaning of “Digital Assets”

The Act is inherently limited by the definition of digital assets. Under the Act, digital assets are defined as an electronic record in which an individual has a right or interest, but doesn’t include an underlying asset or liability of such electronic record unless the asset or liability is itself an electronic record. Examples of digital assets include:

(i) any information stored on a computer and other digital devices; (ii) content uploaded onto websites, ranging from photos to documents; (iii) rights in digital property, such as domain names or digital entitlements associated with online games; and (iv) both the catalog and content of an electronic communication.

With respect to electronic communications, the Act distinguishes between the content of an electronic communication and a catalog of electronic communications. Content of electronic communication means information concerning the substance of the communication that isn’t readily accessible to the public. Examples of content would include the subject line and body of a user’s email messages, text messages and other messages between private parties (for example, inside the envelope). Catalog of electronic communication is simply information that identifies each person with which a user has had an electronic communication, the electronic address of such persons and the time and date of the communications (for example, outside of the envelope). The reason for such distinction is largely based on the sensitivity of disclosure of one’s private personal communications and the provisions of U.S. federal law, which distinguishes content material and non-content material when determining what can be disclosed without the lawful consent of the user.

The Act doesn’t apply to a digital asset of an employer used by an employee in the ordinary course of an employee’s business. The Act also doesn’t require a custodian to disclose any digital asset that was deleted by the user under the logic that deletion is assumed to be a good indication that the user didn’t intend to grant access.

Rules of Priority For a User’s Direction of Disclosure or Non-Disclosure

The Act provides a priority system for individuals to specifically control the disclosure or non-disclosure of some or all of their digital assets and contents of electronic communications as it relates to the direction in an online tool provided by a custodian, the user’s estate planning documents, or a terms-of-service agreement (TOS Agreement). In general, any direction contained in an online tool will control over a user’s estate planning documents or a TOS Agreement. If the custodian doesn’t provide for an online tool or the user doesn’t provide direction through the online tool, then the user may provide instructions in their estate planning documents such as a will, trust, power of attorney or other written record. A user’s direction under an online tool or in any of their estate planning documents overrides any contrary provision in a TOS Agreement. However, if a user doesn’t provide for the disposition of their digital assets whether online or in an estate planning document or a user affirmatively assents to disclosure or non-disclosure in a separately stated and distinct part of a TOS Agreement, the provisions of a TOS Agreement will always control.

Procedures for Disclosure

The Act provides detailed procedural rules for how different types of fiduciaries (for example, personal representatives, agents/attorneys-in-fact, guardians and trustees) may request disclosure from a custodian. In relation to the disclosure of content of electronic communication the procedural hurdles are greater and stricter as compared to the default rules relating to the “catalog” (for example, outside the envelope information) and “other digital assets” that have lesser protection under U.S. federal privacy laws.

Assuming the custodian has received all of the information required under the Act, a custodian must generally comply with a request to disclose digital assets but has the sole discretion to choose the way in which it may provide disclosure of a user’s digital assets. If a custodian fails to comply with a request to disclose digital assets or terminate an account, a fiduciary or designated recipient can generally apply for a court order directing compliance. If acting in good faith, a custodian is immune from liability for any act or omission in compliance with the Act.

Effective Date

The Act will be effective July 1, 2016 and apply prospectively and retroactively to all fiduciaries acting under a will, trust or power of attorney, and to guardians appointed through guardianship proceedings with respect to Florida residents. Clients who are Florida residents, or those considering becoming Florida residents, should now consider updating their estate planning documents as it relates to their wishes for disclosure or non-disclosure of their digital assets. A client’s wishes can also be bifurcated between content of electronic communications and other digital assets.

 

* This article has been reproduced Courtesy of Leimberg Information Services, Inc. (LISI) at Leimberg Information Services.

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