New California Digital Asset Law

13 Oct New California Digital Asset Law

Revised Uniform Fiduciary Access to Digital Assets Act

On September 24, 2016, Governor Brown signed new legislation that addresses how digital assets are to be handled when someone passes away. Prior to this law, when a person passed away, there was no legal direction on how to handle the person’s digital assets and digital accounts. Under the new law a “digital asset” means an electronic record in which an individual has a right or interest. The term “digital asset” does not include an underlying asset or liability, unless the asset or liability is itself an electronic record.

The law essential creates a 3 level system for handling digital assets and who can access them when a user has passed away. A user is the person who held the account. For example, John has a Gmail account. John is the “user” and Google is the service provider.

So for example, if John (as the User) passes away, this law tells the service provider how John’s Gmail account will be handled after John’s death.

Tier 1

At the first tier, the law instructs the service provider to follow the intent the user has expressed using an online tool. For example, if John has used Google’s Inactive Account Manager, and has instructed that he wants his entire Gmail account deleted, John’s intent is clear and he has used an online tool, so these instructions will be followed by the service provider.

Tier 2

At the second tier, if no online tool has been used, but the user has made his intent clear in his estate plan, like a Will or Trust, the service provider will look to those instructions. So for example, if John has named a Digital Trustee to manage his digital assets and accounts, like Gmail, the Digital Trustee’s instructions will be followed.

Tier 3

If no instructions are made in your estate plan, then the service provider’s Terms of Use will dictate what shall be done.  For example, Yahoo!’s terms of use include a clause that states the account is non transferable and will be deleted upon a user’s death. If the User did not use an online tool or have a digital estate plan, then Yahoo! will delete his account without allowing access to the contents for privacy reasons.

There are only a handful of service providers that have incorporated online tools addressing death, so if you have not done any digital planning, your account will likely be deleted pursuant to the terms of use. It is imperative that you have an estate plan in place that also takes into account digital assets and accounts. Contact our office for a free consultation at (818) 649-9110.

To read more about digital assets, click here for an article co-authored by Ms. Bazikyan in 2014: