For hundreds of years, most information existed in tangible form, usually in paper documents. However the advent of digital technology, has transformed the way people acquire and store information and transact business. As people continue to embrace digital technology, many tangible documents have been replaced by digital files. This shift towards digital media has created challenges for fiduciaries tasked with corralling digital assets for individuals who have either lost capacity or died.
In Florida, when an individual dies or is declared incapacitated, a fiduciary is required to use their legal authority to inventory the person’s assets, pay the persons creditors and expenses, and preserve the assets while they are incapacitated or transfer the assets to the proper beneficiaries. Traditionally, an individual’s personal information could be located by searching their paper records, where one could find information regarding bank accounts and bills to be paid. However, the digitalization of personal information has made locating these records more complicated. Fiduciaries must identify and locate these digital assets, determine who has control over access to the assets, and figure out how to access those assets.
Existing laws make it difficult for a fiduciary to access digital information. Both Federal and state laws prohibit unauthorized access to computers and other digitally stored information. In Florida, the “Florida Computer Crimes Act” and Florida Statute §934, title “Security of Communications; Surveillance”, establish privacy rights and prohibits certain electronic communication services from knowingly providing contests of certain digital communications and files. Neither of these statutes address a fiduciaries ability to legally obtain access or control over the digital assets.
In February 2016, the Florida Fiduciary Access to Digital Assets Act (the “Act”) unanimously passed both the House and Senate. There are two main purposes of the Act. First, to provide fiduciaries the legal authority to manage digital assets and electronic communications in the same way they manage tangible assets and accounts. Second, to provide custodians of digital assets and electronic communications the legal authority to work with fiduciaries while maintaining the user’s expectations of privacy in their personal communications.
The Act applies to four types of fiduciaries: personal representatives of decedents’ estates, guardians of the property of minors or incapacitated persons, agents who are acting under a power of attorney, and trustees. The Act allows the individual to specify whether their assets will be preserved, distributed, or destroyed. To comply with federal and state privacy laws, the Act prohibits companies that store digital information from releasing the information to a fiduciary unless the user has consented to the disclosure. In addition, fiduciaries must provide proof of their legal authority under Florida law to the companies that control the digital assets. Companies that comply with a fiduciary’s authorized request are given immunity from liability under the statutes that prohibit unauthorized access.
The Act should provide fiduciaries the legal authority necessary to comply with the individual’s estate plan, while ensuring that the individual’s privacy is protected. The Act goes into effect on July 1, 2016.
If you or anyone you know is interested in obtaining estate planning advice, the experienced attorneys at Chepenik Trushin LLP are ready, willing, and able to provide advice and assistance. Please do not hesitate to contact us for an initial consultation.