Explaining digital assets and estate administration in NY
In the digital age, estate administration has taken on new complexities. One major development is the necessity to manage and distribute digital assets after a person’s death. Estate administrators in New York must be aware of the state’s laws and provisions to properly handle these assets and respect the decedent’s wishes.
Digital assets encompass a wide variety of possessions including online accounts, social media profiles, emails, digital photos, and other virtual property. In 2016, recognizing the increasing significance of these assets, New York enacted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). The Estate Administration and Litigation Lawyers at Mark E. Seitelman Law Offices assist clients in navigating such matters, offering comprehensive legal services tailored to estate administration needs.
The RUFADAA clarifies how these digital assets can be accessed and managed by fiduciaries, such as executors and trustees, during the estate administration process. When dealing with estate administration in New York, it is crucial to have a clear understanding of the legal landscape surrounding digital assets to ensure a smooth and efficient process.
Understanding digital assets in estate planning
Defining digital assets
Digital assets are a relatively new aspect of estate planning, encompassing various types of online records that an individual owns. These can include social media profiles, online accounts, cryptocurrencies, photos, texts, and documents, among many other types of digital content. In the context of estate planning and administration, it is important to understand how these digital assets can impact the process and the responsibilities of the involved parties, such as the executor and fiduciaries.
Importance of including digital assets in estate plans
As our lives increasingly revolve around technology, the importance of including digital assets in estate planning has become more evident. Failure to adequately address digital assets in an estate plan can lead to complications, such as limited access for the executor or fiduciary and potential disputes among beneficiaries. By incorporating digital assets into an estate plan, individuals can ensure that their online accounts, valuable files, and sentimental digital items are handled according to their wishes, thus providing a comprehensive and efficient administration process.
Digital asset categories
To better manage digital assets in estate planning, it is helpful to categorize them based on their nature and importance. Here are some common digital asset categories:
- Personal assets: This category includes items such as digital photos, videos, texts, and emails. These items may hold sentimental value or contain sensitive personal information.
- Financial assets: This encompasses items related to the individual’s finances, such as online bank accounts, investment portfolios, cryptocurrencies, and online payment platforms.
- Social media profiles: Social media profiles, such as Facebook, Twitter, and Instagram, are considered digital assets since they contain personal data, memories, and online connections.
- Business assets: For individuals with online businesses or careers, digital assets may include professional websites, blogs, client databases, and business-related accounts.
By understanding the different categories of digital assets and their implications for estate planning, individuals can ensure a smoother and more efficient administration process. This will in turn help secure the legacy and wishes of the individual for their loved ones and beneficiaries.
Legal framework and challenges in administering digital assets
Relevant New York laws and acts
New York has adopted the Uniform Fiduciary Access to Digital Assets Act (UFADAA) and its updated version, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). These acts provide a legal framework for fiduciaries to access and manage digital assets, like email accounts, social media profiles, and digital repositories of photographs, during estate administration. Moreover, New York Article 13-A of the Estates, Powers and Trusts Law, regulating fiduciary access to digital assets, sets forth a legal basis for controlling, managing and disposing of digital assets in the state.
Fiduciary access to digital assets
Under New York law, a fiduciary has the right to access and manage digital assets, just as they would physical assets, for the purpose of estate administration. Service providers may require a court order or other lawful authorization, such as the decedent’s consent or the executor’s official role, before granting access. Additionally, fiduciaries must comply with the service provider’s Terms of Service when accessing digital assets.
Privacy and consent issues
One of the key challenges in administering digital assets is striking the right balance between fiduciary access and the privacy rights of the decedent and other third-party individuals. Under RUFADAA, if a user explicitly consented to the disclosure of digital asset content, the fiduciary can access their information. However, a service provider may still require further assurances to protect user privacy.
Examples of consent include:
- Providing login information to the fiduciary
- Including a provision in a will or trust instrument permitting access
Major legal cases and precedents
Two significant New York cases have shaped the legal landscape surrounding digital asset administration:
- Matter of Serrano: In this case, the court held that an estate’s executor could access the decedent’s Google and Apple accounts under New York’s SCPA 2103 proceeding. This was a landmark decision, considering it was the first time a New York court granted such access to digital assets.
- Matter of Coleman: The court similarly granted the fiduciary access to the decedent’s email accounts for the purpose of estate administration.
These cases have set an important precedent for future estate administration cases in New York involving digital assets.
In conclusion
The administration of digital assets in New York has become a notable aspect of estate planning as well as estate litigation. In response to this growing concern, New York passed the Revised Uniform Fiduciary Access to Digital Assets Act (the Act) in 2016. This act, which forms Article 13-A of the state’s Estates Powers and Trusts Law, seeks to provide guidance for managing digital assets after an individual’s death.
Digital assets encompass a variety of electronically stored items, such as online accounts, cryptocurrencies, digital media, intellectual property, and more. Given that these assets are not physical in nature, they pose challenges in both estate administration and litigation. The Act aims to clarify the powers and obligations of fiduciaries, such as executors and trustees, to access and administer a decedent’s digital estate.
Under the Administration of Digital Assets law, the process by which fiduciaries in New York can access and manage a decedent’s digital assets is explicitly laid out. This law seeks to balance the rights and interests of various parties involved, such as the decedent, the heirs, and the digital service providers.
In the past few years, New York courts have issued numerous decisions regarding access to a decedent’s digital assets, most of which have followed the guidelines established in Act 1. These decisions have demonstrated the importance of the Act in resolving issues surrounding the administration of digital assets in a fair and equitable manner.
Overall, the Act serves as a crucial tool for providing guidance on the administration of digital assets in New York. Estate planning and litigation professionals, as well as individuals, should familiarize themselves with its provisions as digital assets continue to emerge as a significant aspect of modern estate administration.
