Fiduciaries—personal representatives, trustees, agents under power of attorney, conservators—face a conundrum in Oregon and across the United States. They have obligations and duties, imposed by state law and the appointing instrument, to manage assets of an estate or an individual who is unable to manage his/her own assets. For example, under ORS 114.265, a personal representative “is under a general duty to and shall collect the income from property of the estate in the possession of the personal representative and preserve, settle and distribute the estate in accordance with the terms of the will and Oregon law as expeditiously and with as little sacrifice of value as is reasonable under the circumstances.”
However, as more and more of us do our banking and investing online, more estates include digital or electronic assets. A 2014 poll showed that 81 percent of American adults access an email account or use the internet, and 52 percent of those have multiple social media accounts. 78th Oregon Legislative Assembly - 2016 Regular Session, Measure SB 1554 A, Staff Measure Summary. For these digital assets and electronic communications, state and federal laws limit access to only the individual user on the account. As in many other situations, technology is moving faster than the law. Strict state and federal laws protect privacy and prevent fraud, but those laws also limit valid access to digital assets that a fiduciary needs. In limiting or preventing access to accounts for fiduciaries, the laws meant to protect online users may also have the effect of frustrating the users’ intentions for the management and distribution of digital assets.
With Governor Brown’s signature on March 3, 2016, Oregon became the first state to adopt the Revised Uniform Fiduciary Access to Digital Assets Act (UFADAA), introduced during the 2016 session as Senate Bill 1554. SB 1554 is effective January 1, 2017, but recognizes previously executed wills, trusts, and powers of attorney that provide for direction of digital assets. The UFADAA allows an individual to retain control over the digital assets in the same way as other assets--by granting a personal representative, trustee, agent under power of attorney, or other fiduciary access to and management of digital assets. Further, under UFADAA, fiduciaries can fulfill their obligations to gather, manage, and distribute all of the assets of estates or individuals. The statute only applies if the original user resides in Oregon or resided in Oregon at time of death; however, many other states are currently considering adoption of the Revised UFADAA.
The UFADAA benefits all Oregon residents who have any online presence—email accounts, social media, online bank accounts, etc. A digital asset, as defined by the statute is: “an electronic record in which an individual has a right or interest. ‘Digital asset’ does not include an underlying asset or liability unless the asset or liability is itself an electronic record.” The UFADAA separately defines electronic communications, and further distinguishes “catalogue of electronic communications,” which is information that identifies everyone who sent or received electronic communications, and “content of an electronic communication,” meaning “information concerning the substance or meaning of the communication that: (a) Has been sent or received by a user; (b) Is in electronic storage by a custodian providing an electronic communication service to the public or is carried or maintained by a custodian providing a remote computing service to the public; and (c) Is not readily accessible to the public.”
How does the UFADAA work? First of all, it does not grant unlimited access to online accounts. The statute does not grant any more authority over digital assets that the original user had. Neither does it give the fiduciary personal access to digital assets or electronic communications--authority is limited to that which is necessary to fulfill fiduciary obligations. The custodian may charge a reasonable fee to provide the requested information. And if the executed document provides for only limited access, and segregating the allowed assets from the restricted assets "imposes an undue burden" on the custodian, the custodian is not required to disclose the digital assets.
SB 1554 provides two primary methods for an individual to direct access and management of digital assets. First, the custodian of the digital asset or electronic communication can provide an "online tool," giving the individual user opportunity to direct access and management of that particular account. For example, Google provides a feature called “Inactive Account Manager,” where a user may select an individual to receive the data and/or direct Google to delete the data after a certain period of inactivity. The online tool overrides any direction in a will, trust, or power of attorney.
The second method is for the individual user to grant full or limited access to digital assets through provision in will, trust, power of attorney, or other document. As noted above, the statute distinguishes between digital assets, content of an electronic communication, and catalogue of electronic communications. Without a specific grant of authority to access the content of electronic communications, the fiduciary may only receive a list, or catalogue, of the communications. Whether trying to access digital assets, content or a catalogue of communications, the custodian is directed to release the information upon written request by the fiduciary, accompanied by certain proofs of authority (Letters of Administration, Small Estate Affidavit, copy or original Power of Attorney and certificate that it is in effect, copy of trust or certificate of trust, certified copy of court order appointing conservator, etc.) and other identifying information that ties the individual to the specific online account. For trusts, the custodian must release everything to a trustee who is the original user on an account that is held in trust. A conservator with "general authority to manage the assets of a protected person," as opposed to specific access to digital assets, can still request the termination or suspension of a protected person's online account "for good cause." Personal representatives, trustees, and agents under power of authority may also request that the custodian terminate an individual's online account, with a written request and appropriate proofs.
The provision in a will, trust, or power of attorney to give the fiduciary authority over digital assets overrides the general terms-of-service agreement of an online account, but as noted above, is overridden by the terms of an online tool.
Adoption of the Revised UFADAA in Oregon provides a much-needed update and will help fiduciaries to fulfill their existing obligations in a more uniform manner. Whether the digital asset has monetary value or simply memories and strong personal value, online users in Oregon can also have peace of mind in knowing those assets may also be distributed as they direct and desire.