The “Fiduciary Access to Digital Assets Act” will take effect on June 27, 2016. What is it, and why was it thought to be necessary? Read on to find out.
What is the Act?
This Act allows a fiduciary who falls into one of four categories to access your “digital assets.” The four categories are: (1) a person acting under a Will or Durable Power of Attorney; (2) a Personal Representative of a probate estate; (3) a Trustee of a trust created by that person; or (4) a court-appointed Conservator. Importantly, the Act applies even if any of these began before the Act took effect. Finally, it is possible for you to override these categories, if you can designate someone through the account itself. For example, Facebook allows you to name a “Legacy Contact,” which can be accessed through your account settings. Anyone named there would have priority over the other categories, but just for Facebook.
What are Digital Assets?
This definition is broad and includes virtually any digital record associated with you. It could include email, bank accounts, social media accounts, etc. Basically, anything on-line where you have a password would fall into this category. Any company managing the relevant web account is called a “Digital Custodian”.
Why was this Act necessary?
The short answer is that technology had moved beyond the state of the laws. Companies with an on-line presence have obligations when it comes to security and privacy, and they simply would not let people’s fiduciaries get access to their accounts, even when a person was deceased. This law fixes that problem and provides a clear answer so that an already difficult time when someone has become sick or died does not become an additional headache.
Are there any other requirements under the Act?
Yes. In order to access the digital assets, a fiduciary has to make a written request of the Digital Custodian and provide them with documentation showing that the fiduciary falls into one of the categories under the statute. Then the Digital Custodian has 56 days to respond. Finally, the fiduciary for your digital assets still has to follow the rules that they would have to for physical assets. For example, someone holding a power of attorney for you is not allowed to clean out your bank account. Likewise, they will not be allowed to transfer all your money away on-line if they get access to your electronic bank account.
In conclusion, this Act is a beneficial addition to Michigan’s laws, but it also should create awareness that digital assets should be not be neglected in the estate planning process as a whole.