It’s a Digital World After All

By Blake J. Birchmeier

            In today’s increasingly digital world, almost all of us have acquired a new form of property interest called digital assets.  Digital assets, which are separate from our physical possessions, consists of digital information or communications, i.e. – email accounts, social media accounts, cloud-based storage accounts, digital photos, bank or other financial accounts, and cryptocurrencies, such as Bitcoin, that are stored as data on a computer server and accessed via the internet.  Until now, however, Pennsylvania law provided zero guidance for individuals who wished to transfer their so-called “digital assets” or how these digital assets were able to be accessed by their personal representatives upon their death.  Rather, access and control of these digital assets for Pennsylvanians have been largely governed by the terms-of-service agreement existing between the individual and various private companies.  Those agreements are commonly referred to as “click-through” agreements and are the legal terms of service that almost everyone blindly agrees to by clicking the applicable boxes in order to create an online account or to utilize the online services of a company.  These terms-of-service agreements can create problems for Pennsylvania account holders when they die or become disabled and their personal representative needs to gain access to those accounts on their behalf.

            Fortunately, Pennsylvania recently passed Act 72 of 2020 to provide guidance to Pennsylvanians with respect to the ability to access or transfer their various digital assets.  The Act is formally called the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) and was signed into law by Governor Tom Wolf on July 23, 2020, and took effect in January of 2021.  RUFADAA is designed to work in tandem with Pennsylvania’s existing laws concerning probate, estates, personal representatives, powers of attorney, and trusts.  In fact, RUFADAA now provides a framework within Pennsylvania law whereby you have a direct say and control over access to and the transfer of your digital assets. 

This new framework, under RUFADAA, is strikingly similar to assets that you already own and manage, which can either be controlled by the express provisions of your Will or Trust or through the designation of specified beneficiaries.  In that sense, it is important for you to know that many of these private online companies, such as Google, Apple, Facebook, Yahoo, etc., actually provide what is called an “online tool” so that you can instruct these companies, as custodians of your accounts, exactly who can gain access or control of your account and all or what information in your account those persons have access to.  Therefore, much like a beneficiary designation on your life insurance or retirement account, you have the ability to expressly direct these companies as to the manner of control or access your personal representative has to your information, either upon your death or disability. 

            Of course, there are providers of online accounts that do not provide these sort of user-directed instructions through an online tool, which is where the framework of RUFADAA concerns the various estate planning documents that our clients currently have in effect for the transfer or control of their physical possessions and estate.  In those cases where there are not online tools or designated successors to users online accounts, RUFADDA expressly grants users the power set forth their instructions for their digital assets in their Wills, Trust, or Powers of Attorney, which will override the provisions of the terms-of-service agreement in effect between you and these private companies.  This is critically important, especially if you wish to have your digital assets transferred or accessed in the same or similar manner as your other assets that you have designated and provided instructions related thereto in your Will, Trust, or Powers of Attorney.

Pennsylvanians who fail to properly plan for the management or disposition of their digital assets, whether during life or at death, may not be able to override the express provisions of the terms-of-service agreements in effect between themselves and these private companies.  While RUFADAA provides that the same personal representative appointed to manage a person’s physical possessions will also have the ability to manage that person’s digital assets, in the absence of an online tool or direction in the person’s estate planning documents, access to certain information is limited and can be obtained only through a legal process involving a court. 

It’s a digital world after all and if your digital assets are just as important as the other assets you are passing on to your loved ones, it is important that you contact our Estates and Trusts Attorneys to consider an update to your estate planning documents, so that the provisions and protections of RUFADAA are properly incorporated into your estate plan.