Welcome to CPA at Law, helping individuals and small businesses plan for the future and keep what they have.

This is the personal blog of Sterling Olander, a Certified Public Accountant and Utah-licensed attorney. For over thirteen years, I have assisted clients with estate planning and administration, tax mitigation, tax controversies, small business planning, asset protection, and nonprofit law.

I write about any legal, tax, or technological information that I find interesting or useful in serving my clients. All ideas expressed herein are my own and don't constitute legal or tax advice.

Planning for the Transfer of Digital Assets on Death

The number, scope, and value of digital assets that individuals possess has increased dramatically in the past decade, raising the question of what happens to such assets when the owner dies or becomes incapacitated. Digital assets could theoretically have been dealt with under existing trust and estates law, but practically speaking, the privacy practices and terms of services agreements of digital asset "custodians" (Google, Facebook, etc.) made this impractical. For example, many such custodians' terms of services agreements have provided that a user's digital assets are non-transferable and that no successor had any rights of access upon death.

The Revised Uniform Fiduciary Access to Digital Assets Act attempts to address some of the unique attributes of digital assets while still adhering to the "traditional approach of trusts and estates law." The RUFADAA began to be enacted by states in 2016 and currently has been adopted by approximately 44 U.S. jurisdictions; in other words, it has been very well received since being proposed by the Uniform Law Commission. The RUFADAA establishes the rights of personal representatives, conservators, attorneys-in-fact, and trustees to access digital assets and communications of an individual.

Some digital asset custodians provide an online tool whereby a user can direct the custodian to disclose to a designated recipient the user's digital assets and/or communications; the RUFADAA confirms that such a designation by a user generally is enforceable and overrides contrary provisions found in the user's estate planning documents. However, not all custodians offer such a tool, and those that do may not offer complete access. For example, Facebook provides users the option to designate a "legacy contact" to look after their account on death, but such contact would have very limited access to the users account.

Fortunately, if a user has not utilized an online tool, they can allow fiduciary access to digital assets and/or communications in a will, trust, power of attorney, or "other record," including an electronic record. Such an instruction generally "overrides a contrary provision in a terms-of-service agreement," thus providing an alternative to a custodian's online tool that provides only limited access to a designated person. Anyone who is concerned about granting access to valuable or sentimental digital assets on death should consult with an estate planning attorney familiar with the RUFADAA.