Independent Thinking^®

Hey! You! Get Off of My (Digital) Cloud

It’s unlikely that Mick Jagger and Keith Richards of the Rolling Stones were thinking about Internet privacy laws when they wrote their famous lyrics over 50 years ago. But for many of us, the sentiment is all too apt. Our lives are increasingly transacted online. Over 85% of adults now use the Internet, and 72% are using some form of social media.¹ In the months since we last wrote about this issue (Independent Thinking, Spring 2016), states including New York, California, Minnesota and Florida have enacted legislation specifically addressing access to digital assets. Understanding these laws helps individuals and families preserve their personal and financial information.
 
Historically, digital custodians have denied families access to manage the contents of a deceased individual’s digital assets and even the legal right to the digital information. These rights are typically governed by a terms of service, also referred to as an end licensing agreement, which controls the relationship between the individual and the digital custodian. The newly enacted statutes, which vary by state, generally provide workable solutions to effectuate the disclosure.

Instead of summarily terminating access after death, the new laws provide a three-tiered approach to determine a fiduciary’s access to digital data:

• An individual’s direction to access to a fiduciary will prevail after his or her death as long as the tool provided the individual with the ability to modify or delete. Facebook and Google currently offer this tool.
• Absent an online tool, or use of that tool, the direction established in a will or trust, power of attorney or other record will be respected.
• In the absence of the above, the rights established in a terms of service agreement will determine a fiduciary’s rights to the digital data.

Individuals who decide to disclose digital assets to their fiduciary rightly wonder how much information to disclose.
 
Limited, or catalog, disclosure provides information that identifies each person with whom the individual has had electronic communication, the time and date of the communication, and the electronic address of the person or entity. This information is helpful to the fiduciary in determining the entities, such as Amazon and eBay, with which the person had transacted business.
 
Full content provides the complete substance of the digital asset. Effectively, the fiduciary will be able to see the substance of an email, or the actual digital photo in a cloud server. Many financial institutions give individuals the option to opt out of paper statements, allowing a fiduciary full content disclosure that can help uncover assets.
 
As this area of law and best practice evolves, individuals should avail themselves of online tools that grant or restrict authority, whenever it is offered. Consult your estate planning advisor about the laws in your state and to ensure that a directive is made in the appropriate documents to eliminate any confusion regarding your intention of partial or full access to digital data.
 
Julio Castro is a Partner and Wealth & Fiduciary Advisor at Evercore Wealth Management. He can be contacted at [email protected].

¹ Pew Research, 2015.