By Paulius Jurcys – Edited by Henry Thomas
Fiduciary Access to Digital Assets and Digital Accounts Act, 12 Del. C. §§ 5001 – 5007 (2014).
On August 12, 2014, the General Assembly of the State of Delaware adopted the Fiduciary Access to Digital Assets Act sponsored by Rep. Darryl Scott (D-Dover). The Act takes effect on January 1, 2015 and aims to solve the problem of what happens to online accounts after the account holder passes away. The State of Delaware has become one of very few jurisdictions to adopt special rules for this matter.
The Act allows a fiduciary to “have the same access as the [deceased] account holder” within 30 days of making a written request to the account “custodian.” In a departure from other statutes, the Act assumes that fiduciaries “have the lawful consent of the account holder” even when the account holder has not explicitly provided for this privilege. 12 Del. C. § 5005.
The Act was prepared by attorneys from the Delaware State Bar Association who were cooperating with colleagues from the Uniform Law Commission. The new Delaware Act is largely based on the principles of the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”) adopted by the Uniform Law Commission in its July 2014 session.
One of the notable features of the Delaware Act is that it adopts a relatively broad notion of fiduciaries covering personal representatives appointed by will, guardians, trustees, and agents. 12 Del. C. § 5002(9). Though the Act only applies to estates governed by Delaware law, its effects may be far-reaching; digital assets will be subject to the law even if the tech companies (or the deceased herself) are not residents of Delaware.
The proliferation of various digital communication media facilitated much discussion on whether third parties (such as spouses, children or estate managers) should be given access to the deceased person’s online accounts, and, if so, who should be authorized to get access and how should they be allowed to dispose the digital assets in those accounts. The goal of the Act is to lower existing hurdles which surviving family members and attorneys face in disposing with the deceased person’s digital assets. The Delaware House Democrats website explains that this new piece of legislation aims to keep Delaware’s law in pace with developing technologies and protect “the average person in the face of a rapidly evolving digital world.”
As with many new attempts to regulate online communications, the adoption of the Act sparked criticism, much of it originating from the tech-industry. PCWorld describes how various information service providers argue that the new Delaware Act would impinge on basic notions of user privacy.
Yahoo, for example, argues that the Uniform Law Commission wrongly assumed that online account users would want their data to be transferred to any of the third parties. Like many other tech companies, Yahoo uses a Terms of Service which prohibits transfer of accounts—even at death.
On the other hand, Jim Lamm of Digital Passing praises the statute for being “the most comprehensive law of its type.” He proceeds to list several other state statutes, each “unfortunately” falling short of the standards set by the Delaware law. Criticisms aside, the ideas behind the UFADAA might be spreading; the Orlando Sentinel reports that Florida legislators may attempt to pass similar legislation.
Given the differences between the regulatory intent and the existing practice, it remains to be seen how this set of regulations will be enforced in Delaware and what legislative steps other states may take.