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The Advantages of the Revised UFADAA for Estate Planning

High wealth investors can avoid federal estate taxes on digital assets with the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) since 2015. Estate planners know that the end-of-life planning of trust and estate assets may include a whole host of digital assets, including financial assets such as cryptocurrency, as well as nonfinancial assets like business websites, digital storefronts, payment gateways, enterprise data, cloud storage repositories, contact lists, social media, subscription accounts, as even digital medical images and records.

 

Terms of Service Agreements

Legal consideration of terms of service agreements exhibits statutory provisions limiting access to designated user account access. Legal issues arise when the owner of a digital account has died or is otherwise incapacitated. Without the capacity to log into an account, an estate executor is posed with a challenge that has the potential to result in probate court intervention. If the owner of an account mentioned in a will or last testamentary documents of an estate is deceased, the account providers are under no binding legal obligation to allow others to access those digital accounts held in the decedent’s name.

 

Under RUFADAA the rules to third-party user access of designated user accounts under the name of an incapacitated or deceased party without being an authorized user is prohibited. In fact, without the proper estate planning procedure, access of a decedent’s computer or digital account without proper authorization is an act punishable by law under the Computer Fraud and Abuse Act (“CFAA”) and Electronic Communications Privacy Act (“ECPA”).

 

Advantages of RUFADAA

The main advantage of RUFADAA is it provides a legal framework for estate fiduciaries (i.e. trustees, executors, or other agents) with power of attorney appointment such as court-appointed conservators or guardians of protected persons’ estates to act on a decedent or incapacitated party’s behalf. Transparency in procedure under RUFADAA in a three (3) tiered system of priorities, allows for third-parties to gain lawful access to an individual’s digital account. RUFADAA provides clear guidelines for treatment of digital assets in the event an estate fiduciary seeks account access from a service provider.

 

Premature Termination

The premature termination of a digital account listed in a will can lead to complications. Satisfying outstanding debts is an example of extenuating legal obligation that may be connected to an estate held digital account. Early termination of an account can thus lead to probate and financial penalties as result of unresolved debts after the death of the account holder.

 

Ask a licensed attorney specializing in estate planning and matters of trust probate litigation about proper legal transfer of digital assets to beneficiaries of a will.

 

Estate Law Attorney Practice

Ettinger Law Firm is a licensed New York attorney practice specializing in estate planning and probate litigation. Contact Ettinger Law Firm to schedule a consultation about an estate planning matter involving digital accounts.

See Related Blog Posts

The Importance of Digital Assets in Estate Plans

Digital Assets May Seem Unimportant, But Families Will Want Access

 

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