Trusts and Estates

Ca. Trs. & Estates Quarterly 2017, Volume 23, Issue 2

PLANNING FOR DIGITAL ASSETS IN CALIFORNIA, NOW WITH LESS UNCERTAINTY!

By Michael Rosen-Prinz, Esq.*

I. INTRODUCTION

Californians who use email accounts or own other digital assets,1 which includes almost everyone in California, should breathe a sigh of relief. On September 24, 2016, Governor Brown signed AB-691-The Revised Fiduciary Access to Digital Assets Act, effective January 1, 2017 ("Cal-RUFADAA").2 Cal-RUFADAA added Part 20 to Division 2 of the Probate Code, consisting of sections 870 through 884. The language of the Probate Code sections added by Cal-RUFADAA was substantially based on the Uniform Law of the same name ("RUFADAA") drafted by the Uniform Law Commission ("ULC") in 2015.3

What does Cal-RUFADAA do? At its core, Cal-RUFADAA confirms the right of fiduciaries to receive disclosure of digital assets held by a custodian after the original user’s death.4 It is easiest to understand this, and why it is important, with a simple example. Consider an email account provided by a custodian or online service provider, such as Google (Gmail) or Yahoo. When an individual opens an email account, she receives a license to use the services provided by the service provider, governed by the terms of service ("TOS") that form a contract between the provider and the user. The user will generally have the ability to send, receive, and store email. That individual might have meaningful personal conversations over email, but also might engage in business dealings, receive bank and other financial statements, or even use the email account as a form of online storage for files or writings. A user will retain property rights over the content of the email account, but the user’s ability to access the account or share access to it will be governed by the custodian’s TOS. When the user dies, a fiduciary may not be able to access the user’s email account or the user’s property in that account. The property might be a valuable component of the decedent’s estate or necessary for efficient estate administration. By failing to gain access to the account, the fiduciary may be derelict in her fiduciary duties to administer the decedent’s estate or trust.

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