Digital assets now pass easily to heirs under new AZ law

Many people believe their heirs will inherit their digital photos, business documents, social media accounts, web sites, text messages, bit coins or other important digital property through their will or by statute. Not true.

 

Prior to Governor Ducey signing the Fiduciary Access to Digital Assets Act (FAADA) in May, “custodian” companies that stored those assets on their servers such as Facebook, Google or Yahoo, determined who could receive those items if a person became deceased or incapacitated. The custodian’s terms-of-service agreements superseded wills and trusts preventing heirs or guardians from gaining access to the digital property.

Alexis Glascock, Fennemore Craig
Alexis Glascock, Fennemore Craig

Under the new law, a fiduciary or trusted person with legal authority to manage another person’s property will have the ability to access and distribute the deceased or incapacitated person’s digital assets.

 

FADDA provides a three-tiered system for distributing digital assets. First, if the custodian of the digital assets (online platform like Facebook) provides an online tool that allows the user to name another person to have access to the user’s digital assets, FADDA makes the user’s online instructions legally enforceable.

 

Second, if the custodian does not provide an online planning tool, or if the user does not use it, the user may give legally enforceable directions for the disposition of digital assets in a will, trust, power of attorney or other written record.

 

Third, if the user has not provided any direction, either online or in a traditional estate plan, the terms-of-service for the user’s account will determine whether a fiduciary may access the user’s digital assets.

 

If the terms-of-service do not address fiduciary access, the default rule in the new law will apply requiring the custodian of the digital assets to provide only a catalogue of the communications showing the addresses of the sender and recipient, and the date and time the message was sent.  However, if the decedent has an estate plan, power of attorney or notarized written statement, they can direct the custodian to give the fiduciary full access to the content to distribute to named heirs.

 

To obtain the digital assets, the fiduciary must send a request to the custodian with a certified copy of the document granting the fiduciary authority, such as a letter of appointment, court order, or certification of trust.

 

As a result of this new law, individuals should make a provision in their will, trust, power of attorney or other written document to distribute digital assets.  They should also be made aware that any directions they make through an on-line tool supersede their trust or will.

 

Alexis Glascock is Of Counsel at Fennemore Craig. She has worked in both private practice and in senior staff positions in state government. She has served both as Counsel to the President of the Arizona Senate and Assistant to the General Counsel of the Legislative Council.

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