Managing Digital Assets - Tennessee's Revised Uniform Fiduciary Access to Digital Assets Act

By Matthew D. Faulk, November 12, 2019

Think of that person in your life – a stay-at-home mom, a twenty-something college student, or, you know, YOU – that has a significant online presence, especially one which generates a regular stream of revenue.  Such presence may be tied together through various social media outlets (i.e., Instagram, Twitter, Facebook, etc.) and third-party financial service providers (think PayPal, Venmo, or a traditional mobile banking app).  Countless others have photographs, music purchases, video downloads (or uploads) just floating out in the ether under the auspices of content providers. 

A large number of us rely on a digital footprint to manage our daily affairs, rather than keeping to the tradition of housing physical records.  So, in the event the person mentioned above dies unexpectedly, or suffers a serious trauma that prevents easy access to his or her digital life, what tools exist to assist those left behind to manage these assets? 

The Tennessee General Assembly answered that question and enacted, effective July 1, 2016, the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”), which vests in certain fiduciaries the authority to access another’s digital assets.  For purposes of the Act, “digital assets” is defined as 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.”  A “fiduciary” is an original or successor personal representative, trustee, agent or attorney in fact under a power of attorney, conservator, or guardian.

Section 35-8-104 of the Act establishes a tiered system, under which access can be granted or denied to digital assets.  The lowest tier means your fiduciary is relying on any applicable provision in a terms-of-service agreement (“TOSA”) “that does not require the user to act affirmatively and distinctly from the user’s assent to the terms of service.” The middle tier permits access through a will, trust, power of attorney, or “other dispositive or nominative instrument.”  The highest tier, and the one that might prove easiest in accessing online materials, is what’s called as “online tool.” Such an “online tool” is offered by the service provider and “allows the user, in an agreement distinct from the [TOSA] between the custodial and user, to provide directions for disclosure or nondisclosure of digital assets to a third person.”

How many of us even read TOSA provisions when asked, for instance when installing iTunes? Relying on language we rarely, if ever, read is not a viable strategy. Tiers one and two are optimal because each allow the user to determine who has control in an affirmative way.

HERE’S THE POINT:

From the foregoing, two recommendations: One, it is highly advisable that everyone keep with their other estate planning documents a regularly revised and updated list of emails, account numbers, usernames, and passwords to your online accounts. This list can save your fiduciary untold man-hours in research and lengthy, unnecessary phone calls; and Second, in light of the Act’s second tier, estate planning documents should be drafted to specifically incorporate provisions complying with the Act.