If you are a fiduciary, this new Act that is contained in Chapter 740 of the Florida Statutes now allows a fiduciary to access and manage the account holder’s digital assets. Specifically, the Act grants authority to a fiduciary to access electronic records of a decedent, principal, settlor or a ward. The Act refers to the owner of the digital assets as the “user” and attempts to balance the need for such access with the user’s expectation of privacy.
So what is a digital asset? Digital assets include information stored on a computer and other digital devices, the content that has been uploaded onto websites such as photos and/or documents, as well as rights in digital property such as domain names or entitlements associated with online games. The term “digital assets” does cover both the catalogue and the content of an electronic communication. In other words, the fiduciary, whether a personal representative, an agent acting pursuant to a power of attorney, a trustee of a trust or a guardian of a ward is now able to access the “user’s” Facebook account, Twitter account, LinkedIn account, Yahoo or Google account as well as the user’s online banking accounts, eBay accounts, PayPal accounts and such.
Specifically, Section 740.006 and Section 740.007 of the Florida Statutes establishes the rights of personal representatives to decedent’s electronic communications and digital assets. The new Act permits the personal representative to access decedent’s electronic records unless there is evidence of contrary directive from the decedent.
Section 740.008 and Section 740.009 of the Florida Statutes grants an attorney in fact, an agent acting pursuant to a power of attorney, the power to access the principal’s electronic communications and digital assets.
Sections 740.01, 740.02 and 740.03 of the Florida Statutes address the trustee’s right to access such digital assets and Section 740.04 of the Florida Statutes addresses the guardian’s right to access the digital assets of a ward.
It is important to note that although the Act provides a mechanism for a fiduciary, in essence, to step into the account holder’s or “user’s” shoes when accessing the digital assets, the Act also equips the user with the ability to control that disclosure to a third party or a fiduciary through an “online tool” or “an electronic service provided by a custodian which allows the user … to provide directions for disclosure or nondisclosure of digital assets to a third person.” See Section 740.002(16) of the Florida Statutes. This online tool is distinct from the terms-of-service agreement (“TOSA”) between the custodian and the user. Id.
The Act further provides how that direction that is provided by the user using such an “online tool” supersedes or overrides a contrary direction provided by the user in his or her will, trust, power of attorney or other record. See Section 740.003(1), Florida Statutes. In the absence of such an online tool directive, the user’s direction in a will, trust, power of attorney or other record controls. See Section 740.003(2), Florida Statutes. The user’s direction provided in an online tool or in his or her will, trust, power of attorney or other record, in the absence of an online tool directive, supersedes or overrides a contrary provision in any TOSA. See Section 740.003(3), Florida Statutes. However, the TOSA will still control in the absence of any written direction provided either through the online tool or a will, trust, power of attorney or other record. See Section 740.004(3), Florida Statutes.
The Act’s grant of access and control over the account holder’s or “user’s” digital assets is not equivalent to a transfer of ownership. The fiduciary may only administer, manager and dispose of the digital assets and otherwise do electronically what the account holder could have done electronically and nothing more.
Although the fiduciary has the same authority as the account holder or the “user” would have had to access the digital asset, except where the account holder or the “user” had explicitly opted out of the fiduciary access, the Act still imposes on a fiduciary a duty of care, duty of loyalty and the duty of confidentiality when managing the account holder’s or the “user’s” digital assets. A breach of such duties would subject the fiduciary to liability.
The Act does establish 60 days as the timeframe within which a custodian must comply with the request under the Act. If the custodian fails to comply, then the fiduciary must apply to the Court for an order directing compliance. See Section 740.06(1) of the Florida Statutes.
When it comes to the manner of disclosure, the custodian may either grant the fiduciary full access to the user’s account, may grant only partial access provided such partial access is sufficient for the fiduciary to perform his or her task in question, or may simply provide the fiduciary with a “copy in a record of any digital asset”. See Section 740.005(1) of the Florida Statutes. A custodian may also assess a reasonable administrative charge for the cost of disclosing a user’s digital assets. See Section 740.005(2) of the Florida Statutes. A custodian is also not required to disclose a digital asset that has been deleted by the user. See Section 740.005(3) of the Florida Statutes. Finally, if a fiduciary requests access to some but not all of the user’s digital assets and such a request would impose an undue burden on the custodian, the custodian is then under no obligation to comply with such a request and either the fiduciary or the custodian is then free to turn to the courts for guidance on the fiduciary’s disclosure request. See Section 740.005(4) of the Florida Statutes.
The Act also grants immunity from liability to custodians when they act in good faith pursuant to this Act in disclosing or transferring copies of the account holder’s or “user’s” digital assets. See Section 740.06(6) of the Florida Statutes.
By allowing the fiduciary to access the digital assets of the user only pursuant to the authority granted by the user either through an “online tool” or a will, trust, power of attorney, other record or TOSA, the Act is able to fill-in the gap that existed when it came to fiduciary access to account holder’s electronic records and at the same time still preserve the user’s expectation of privacy when it comes to his or her electronic records.
In light of this new law, estate planning documents should be updated and electronic service agreements, an online tool, and TOSAs should be reviewed and appropriate action should be taken by the account holders in providing their specific preference on third party, fiduciary access to their digital assets.