Aftermath of the fight over fiduciary access to digital assets: The revised UFADAA and its implications for legislators and professional advisors

What happens to your emails, social media accounts, domain names, online stores, blogs, and Bitcoins if you are not able to manage them? Digital accounts and digital assets, some of which have substantial financial value, are becoming more and more popular with each passing day. Unfortunately, legislators in many states have not addressed fiduciary access to digital assets should the account holder or owner become incapacitated or pass away. Even the few states that adopted such legislation prior to 2015 were years behind digital advancements, which limited the statutes' effect on fiduciaries and estate administration. Recognizing this need, as well as the discrepancies in current legislation, the Uniform Law Commission drafted the original Uniform Fiduciary Access to Digital Assets Act (UFADAA) to grant fiduciaries access to digital assets. Major e-commerce companies, social media companies, email providers, and civil liberties groups (collectively referred to as the 'Providers'), and their trade organization, NetChoice, opposed the original UFADAA by sending letters of opposition to state legislators that had introduced a bill on the topic. After drafting their own limited provision on fiduciary access to email communications, NetChoice entered into negotiations with the Uniform Law Commission. The result of these negotiations is the Revised Uniform Fiduciary Access to Digital Assets Act (Revised UFADAA), released late in the 2015 legislative session. The Revised UFADAA maintains its applicability to a broad range of digital assets and fiduciaries, while at the same time addressing NetChoice concerns over potential violations of federal law and leeway for service providers. Some states adopted the Revised UFADAA in the 2016 legislative session; however, there are a number of states that are still ignoring fiduciary access to digital assets altogether. Even states that have adopted limited provisions have to consider the clarification and protections that the Revised UFADAA brings to both fiduciaries and Providers. If adopted, estate planners and tax advisors have to identify digital assets owned by clients and incorporate provisions of the statute into their clients' planning. State adoption of the Revised UFADAA, along with incorporation of digital assets into traditional estate and tax planning, will prevent identity theft of clients, preserve estate assets, and ease estate administration. More importantly, this combination of legislator and professional advisor action will ensure that the digital asset owner's intent is effectuated upon his or her incapacity or death.