As seen in Wall Street Journal
(Manning Fulton attorney Andy Blair is quoted in this article published in The Wall Street Journal)
A Controversial New Delaware Law Gives Executors More Access to Online Data
By RACHEL EMMA SILVERMAN
A controversial new state law is making it easier for estate executors to access digital data—such as email, photos and social-media postings—after the account holder dies.
Many Internet companies strictly limit access to their customers’ accounts to the account holder, in accordance, they say, with federal privacy law. When an account holder dies, estate executors typically have to seek a court order to access the account, which can be expensive and time consuming—sometimes taking half a year or more—and isn’t always successful.
But under a Delaware law passed last summer, executors can now access online accounts without a court order, unless the deceased has instructed otherwise. Similar legislation is under consideration in several other states.
That’s an encouraging development to people like Andy Blair, an estate lawyer in Raleigh, N.C., who says his parents have thousands of family photos stored online. “Without a law like this,” he says, “I may never get access to those” after his parents die. But a group of Internet firms opposed the Delaware law, saying that it violates consumer privacy and may conflict with existing federal privacy law.
The new Delaware law also gives access to those serving as agents for the deceased under a power of attorney, as well as court-appointed guardians for those who are incapacitated, and to others serving in a fiduciary role.
The law could affect people beyond Delaware’s borders. Although its population is small, Delaware’s generous trust and tax laws make it a popular place for people across the country to locate trusts, particularly among wealthy families. Individuals can have a Delaware trust even if they live in a different state, as long as a trustee is located in the state. And under the new law, that trustee could access the digital data of the person’s assets that are placed in the Delaware trust.
Delaware’s law, called the Fiduciary Access to Digital Assets and Digital Accounts Act, is modeled after an act drafted by the Uniform Law Commission, a group appointed by state governments that writes up and lobbies for new state laws. So far this year, at least 13 states, including Florida, Virginia, Indiana, Kentucky, Nebraska, New Mexico, North Dakota and Washington, are considering versions of this digital data act. As legislative sessions get into gear this year, state-government watchers anticipate that other states will consider or pass new rules granting digital access to agents for the deceased.
The law is designed to give legally appointed fiduciaries the same access to digital assets as they would have for more tangible assets, such as files stored in cabinets or photos stored in shoeboxes, but not without some restraints. The law requires the fiduciary to follow the deceased or incapacitated person’s instructions for how accounts should be handled—which may include denying the fiduciary access to some or even all accounts. If there are no written instructions, the fiduciary can act as he or she sees fit, according to applicable laws.
A coalition of Internet firms unsuccessfully lobbied Delaware Gov. Jack Markell to veto the legislation. Jim Halpert, general counsel of this State Privacy and Security Coalition, says that, among other concerns, a digital-account holder may not want the content of communication with a doctor, counselor or patients disclosed.
The informal nature and sheer volume of most digital correspondence makes it significantly different from old-fashioned letters, Mr. Halpert says. “Email is a much more unfiltered form of communication,” he says. “People may not show the side of themselves that they want and other family members may be hurt by those communications.”
Mr. Blair recommends that account holders guard against such problems by spelling out in estate-planning documents how they want all their digital data treated, limiting access to sensitive accounts. He suggests doing this now, even for people outside Delaware, to ensure that those protections will be in place if the law changes where an account holder lives.
Mr. Blair cautions that while family members may share digital passwords and other login information, even a family member acting as a fiduciary should contact a lawyer before accessing any accounts, because doing so may violate state or federal law. “That’s where the minefield is right now, and that’s why this act is so important,” says Mr. Blair. “Just because you have the login and password doesn’t mean you can access it whenever you want.”
Ms. Silverman is a Wall Street Journal reporter in New York. Email: firstname.lastname@example.org.