In late June 2016, the North Carolina governor signed Senate Bill 805, Revised Uniform Fiduciary Access to Digital Assets Act, into law. The Act provides that trustees, executors, agents under powers of attorney, and other fiduciary parties in North Carolina may be granted authorities over electronic records and communications of another user.
Personal representatives, or executors, administering estates in North Carolina were previously required to follow the Terms of Services agreements associated with each of the decedent’s digital assets, which typically do not provide for someone other than the account user to access or manage the account. While these agreements still regulate access, the Act provides a legal means for fiduciaries to manage, transfer, or dispose of a decedent’s digital property if granted such authority by the user. Executors must remain cognizant of how the digital assets were acquired and familiar with the terms of service agreements respective to each item to ensure their actions remain in compliance with regulations.
The Act allows account users to direct a custodian to allow disclosure of digital assets to a fiduciary (or designated recipient), thereby granting the same rights to the digital assets that are or were held by the user. Fiduciaries do not obtain “new or expanded rights” as part of the new legislation.
The Act provides that:
- An account holder may authorize disclosure of digital assets to a fiduciary or via an online tool provided by the account custodian or by granting such authority in a will, trust, power of attorney, or other record. Thus, a decedent (during their lifetime) can consent to disclosure of their electronic communications (including digital assets held in trust).
- A custodian generally must grant a fiduciary full access to a user’s account within 60 days of the fiduciary furnishing information required by the Act in order to make a request for disclosure or termination.
- A fiduciary’s duties include care, loyalty, and confidentiality. A fiduciary acting within the scope of their duties is an “authorized user” of the account holder’s property.
While the Act provides guidance and authority for executors to manage and terminate accounts of deceased users, some complications nonetheless might arise during probate.
- Initial acquisition of the digital assets may determine how assets are managed postmortem. For example, movies and music files might be regulated under the original purchase agreement or license. Commonly, these licenses terminate upon the purchaser’s death and are nontransferable. However, some media files are transferable and must follow a specific transfer process.
- A fiduciary’s digital asset access may be compromised by a terms‑of‑service agreement if the decedent neglected to provide direction. Direction, as recognized by the Act, includes use of online tools, will, trust, or power of attorney. Some online tools are service-specific. For example, Google’s Asset Management tool and Facebook’s Legacy Contact both allow the user, during their lifetime, to designate how their accounts will be managed upon their death. If the decedent had no direction in place, included no provisions in a will, executors will need to follow the terms of service agreements. Another problem that could surface is if the decedent neglected to maintain updated estate planning measures in all areas. For example, an agent under power of attorney and the individual named in an online tool could differ if the decedent failed to keep both current. In the event this occurs, the Act recognizes settings made in online tools.
Learn more about problems with digital assets in North Carolina probate.