Effective July 1, 2017, the new Uniform Fiduciary Access to Digital Assets Act, Article 3.1 of Chapter 1 of Title 64.2 of the Virginia Code, will take effect in Virginia. The bill expands the rules allowing fiduciaries to access and manage digital accounts and electronic communications. The bill repeals and replaces the less robust Privacy Expectation Afterlife and Choices Act, which was enacted in 2015. The new law puts Virginia on par with Maryland, which enacted its own Fiduciary Access to Digital Assets Act effective October 1, 2016.
Under the new Act, “Digital asset” means an electronic record in which an individual has a right or interest. “Digital asset” does not include an underlying asset or liability unless the asset or liability is itself an electronic record. “Electronic communication” has the same meaning as the definition provided in 18 U.S.C. § 2510(12). A “Fiduciary” means an original, additional, or successor personal representative, conservator, guardian, agent, or trustee.
Under the new Act, a custodian of digital assets or electronic communications must generally provide access to a fiduciary upon being provided the following:
- Written request for disclosure in physical or electronic form;
- A certified copy of the death certificate of the user, and certified copy of the letter of appointment of the representative or a small-estate affidavit or court order (for a deceased user/owner);
- A copy of the user’s will, trust (or a certification of the trust), power of attorney evidencing the user’s consent to disclosure of the content of electronic communications;
- A certification by the fiduciary that the power of attorney/will/trust is in effect; and
- If requested by the custodian:
a. A number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the user’s account; or
b. Evidence linking the account to the user.
A fiduciary of a user may request a custodian to terminate the user’s account by following procedures similar to the above.
For representatives of deceased users seeking access to digital assets, the custodian may request (i) an affidavit stating that disclosure of the deceased user’s digital assets is reasonably necessary for administration of the estate; or (ii) a finding by the court that the deceased user had a specific account with the custodian, identifiable by the information specified in 5(a) above, or that disclosure of the deceased user’s digital assets is reasonably necessary for administration of the estate.
For representatives of deceased users seeking access to electronic communications, the custodian may request a finding by the court that (i) the deceased user had a specific account with the custodian, identifiable by the information specified in 5(a) above; (ii) disclosure of the content of electronic communications of the deceased user would not violate 18 U.S.C. § 2701 et seq., 47 U.S.C. § 222, or other applicable law; (iii) unless the deceased user provided direction using an online tool, the deceased user consented to disclosure of the content of electronic communications; or (iv) disclosure of the content of electronic communications of the deceased user is reasonably necessary for administration of the estate.
If a custodian fails to comply with a request within 60 days after receipt of the information required, the fiduciary or designated recipient may apply to the court for an order directing compliance, which shall contain a finding that compliance is not in violation of 18 U.S.C. § 2702.
A user may use an “online tool” to direct the custodian to disclose to a designated recipient or not to disclose some or all of the user’s digital assets, including the content of electronic communications. If the online tool allows the user to modify or delete a direction at all times, a direction regarding disclosure using an online tool overrides a contrary direction by the user in a will, trust, power of attorney, or other record.
The legal duties imposed on a fiduciary charged with managing tangible property apply to the management of digital assets, including: (i) the duty of care; (ii) the duty of loyalty; and (iii) the duty of confidentiality. A fiduciary with authority over the tangible personal property of a decedent, protected person, principal, or settlor: (i) has the right to access the property and any digital asset stored in it; and (ii) is an authorized user for the purposes of computer-fraud and unauthorized computer-access laws, including Article 7.1 (§ 18.2-152.1 et seq.) of Chapter 5 of Title 18.2.
The legislation also amends Va. Code § 64.2-1622 to include that authority over the content of the principal’s electronic communications is among the list of “hot powers” that must be expressly granted in a durable general power of attorney in order for the Agent to have the power to act. This of “hot powers” now includes the following:
- Power to create, amend, revoke, or terminate an inter vivos trust;
- Power to make gifts;
- Power to create or change rights of survivorship;
- Power to create or change a beneficiary designation;
- Power to delegate authority granted under the power of attorney;
- Power to waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan;
- Power to exercise fiduciary powers that the principal has authority to delegate; or
- Power to have authority over the content of an electronic communication of the principal as provided by Virginia Code § 64.2-123.
For a summary of other Virginia legislative changes taking effect July 1, 2017, click here for the 2017 Legislative Summary from the Virginia Bar Association Wills, Trusts & Estates Section.
In conclusion, although the new Act is good news for Virginia residents and their fiduciaries, it is essential to review and update your estate planning documents to ensure that your wishes with regard to the authority to access your digital assets in the event of incapacity or death are expressly stated in your Durable General/Financial Power of Attorney, Will and Revocable Trust (if applicable). Please contact us to review your estate plan in light of this and other important legislative changes. Don’t Worry, We’ve Got This!