North Carolina Digital Asset Law

There is a question of what happens to a person’s “digital assets” upon death.

A Digital Asset is an electronic record in which an individual has a right or interest. Digital assets and content include but are not limited to individual files such as images, photos, videos, and text files.  It also includes other digital content and databases owned and/or stored either on a devise owned or used by an individual on devices accessed via the Internet or in a Cloud.  Digital Assets also include but are not limited to email accounts, social media profiles (YouTube or Flickr), social networking profiles (Facebook), LinkedIn, etc.

Are these on-line accounts automatically considered a part of the personal property of the deceased person or a separate category? Although many attorneys have been including provisions in Wills and Powers of Attorneys addressing this concern, North Carolina has recently legislated to specifically address the issue. The new law, known as the Revised Uniform Fiduciary Access to Digital Assets Act allows an individual to designate the persons who can gain access to his digital assets upon death or incapacity. This law only pertains to personal accounts and not accounts that are provided by an employer. Under the new law, an individual can designate access to his named Executor under a Last Will and Testament, Attorney-in-Fact under a Power of Attorney, or Trustee under a Trust. In addition, this law allows a court appointed guardian to access digital assets.

The need for such a law came about because digital assets are controlled by the contract that an individual signs (or clicks to agree) when engaging a new account such as Facebook, Twitter, Instagram, etc. (collectively called the “custodian” in this article). While providing for the privacy of the individual, these contracts historically did not address the issue of death or incapacity. Based upon a person’s specific designations on the account, the executor or other fiduciary can obtain access to digital assets whether it is to obtain information or shut down accounts. It is important to note, however, that on line designations that a person makes take precedent over a designation in the Will or Power of Attorney. This means that if in setting up a Facebook account, one provides that the custodian should not disclose any information, this directive will be followed and information will not be disclosed to the Executor. For this reason, it is important that the designations on the on-line account are consistent with an individual’s estate planning documents.

If an individual has not specifically consented to allow his fiduciaries to access his digital assets, then his fiduciaries may still be able to access the “catalogue” for digital assets — this is the basic identifying information such as name, date and electronic address of the communication. Access to the actual content of digital assets is allowed only if the individual consented in his Last Will and testament, Power of Attorney or on the contract with the custodian. In addition, when the custodian believes disclosing information causes an undue burden, it may still require a fiduciary obtain a court order. The custodian may also charge for the information disclosed. Once any required information is provided, the custodian has 60 days to give access. Custodians do not need to disclose digital assets that had been deleted by the original owner.

This practical lesson one should take form this new law is that it is important when setting up an account to take the time to complete the options provided by the Custodian regarding access to the account in the event of the owner’s death or disability. In addition, estate planning documents such as a last Will and Testament, Trust and/or Power of Attorney should all provide for consistent designations allowing you and your family peace of mind.

Estate Planning & Admin