The Illinois Legislature passed a new Digital Assets Act that became effective on August 12, 2016. Where fiduciaries in the past may have had a difficult time accessing a decedent’s digital assets, this new Act sets forth procedures giving fiduciaries access to the decedent’s digital assets.
The Fiduciary
This Act applies to an executor, personal representative, guardian, agent, or trustee. Commonly, this would apply to those acting under authority of a will, power of attorney for property, trust, or guardianship.
What are Digital Assets?
The digital assets covered under this Act include e–mail, social media accounts, online financial accounts, electronic communications, photo and video storage accounts, and other assets that would fall into the definition of “an electronic record in which an individual has a right or interest.” This covers just about any accounts or stored information associated with a cell phone, computer, tablet, smartwatch, or other information–storing electronic device.
Why was the New Digital Assets Act necessary?
The reason this new Digital Assets Act is important to fiduciaries is that when a fiduciary is acting on behalf of someone who is incapacitated or has passed away, that fiduciary may need access to password protected online accounts for various information. However, state and federal privacy laws criminalize unauthorized access to electronic devices and in some cases, it is a felony.
Additionally, fiduciaries run into problems when they need access to a decedent’s electronic account, but federal laws prevent the company that the account is with from disclosing information to anyone except to the person who created the account.
The Digital Assets Act sets forth procedures for the fiduciary to correctly and legally obtain access to the deceased person’s digital assets.
Procedures under the Digital Assets Act
The default rule for digital assets, except electronic communications, is that if the executor, personal representative, guardian, agent, or trustee submits a request to a custodian of digital assets, the custodian must disclose those digital assets.
However, a user may prohibit disclosure of some or all of the user’s digital assets to a fiduciary if the user limits such disclosure in a will, power of attorney for property, trust, or other document. A user may allow disclosure of documents in the cloud, but may deny access to a Facebook account simply by stating so in a will, trust, etc.
Digital assets in the form of electronic communications call for a different procedure. For a fiduciary to acquire access to electronic communications of the user, the user must give specific authority for the disclosure of electronic communications in a will, trust, or other document.
User Direction with an “Online Tool”
An “online tool” is where a custodian of online information has a process in place where the account user may designate a secondary person to whom the custodian should disclose their digital asset information in the event the user becomes incapacitated or passes away. Two well known companies that have this tool in place are Google and Facebook.
What is interesting about using this online tool through your account custodian is that this designation overrides any contrary direction specified in a will, trust, power of attorney for property, or other record. This adds convenience to a user, but it is also vital to take this into account when estate planning.
If you have any questions on these issues or would like assistance including digital assets in your estate plan, the attorneys at Plager, Krug, Bauer & Rudolph, Ltd. are available to assist you.