The Government Can Enter Your Private Electronic "House" But Your Chosen Financial Agent Could Be Committing A Felony If They Access Your Digital Assets for Your Needs.
Recent news reports of the UK
surveillance of Yahoo user's private webcam chats and video posts makes it clear that governments have the ability,
motivation, and resources to violate our privacy in the electronic world. Read here for some background.
Whether or not you agree with
the government being able to tip toe through your private electronic
data, what about your named
Executor or Financial Agent?
If you became
incapacitated or have a brain injury leading to cognitive impairment, would you
be able to pay your bills and manage your money in the future? If you were to pass away or become
incapacitated, who would be able to handle the areas of your life that
you now handle using electronic data? The proliferation of digital assets and
how your named agent may need to access this data has been a hot topic in
wealth and estate forums, for good reason.
Consider the following scenarios.
You are a budding author like
Stieg Larsen who dies before your work is published. You write your novel on a
PC which is backed up to cloud data storage. Who would have rights to access
your PC as well as any content you have kept on the cloud? Or what if you are a professional photographer, who could access and sell the photos you store in Dropbox? Do you have a gaming account which can be
exchanged into US currency? Or maybe you
set up an on-line site that accrues advertising income? If you manage health care via an online
access, would your health advocate be able to access this information in order to help
you?
Some accounts are just for
your use and benefit while you are alive. When Bruce Willis thought he would
leave his large ITunes collection of music to his kids, he found the agreement
with ITunes allowed for only his use without transfer. Other accounts build
value which may need to be accessed by your Executor or Personal Representative
or other financial agent for your benefit. An increasing number of us store valuable data or information through electronic devises and which require account access via passwords in order to use them.
Legal experts have begun to encourage people to take a digital inventory. This can help you or your agent keep track of access and usage, but it may not be enough to give your named agent the legal right to access this data.
You might think that if you
were incapacitated, a friend or relative could access your digital accounts
with only your say so. Or, you may think that your named agents; a Power of
Attorney, Trustee or even a court – ordered Conservator or Executor could access
on-line accounts for the benefit of the estate or person. This is actually not the case. They might do this informally to help you pay your
bills or to collect advertising income for your use or for your estate. If they do, they could be committing a
felony.
There are a couple of federal
laws that might prevent your named agent from helping handle the electronic or
digital assets in your life. Both of
these laws were enacted in the 1980's before the internet became ubiquitous,
the CFAA and The Stored Communications Act created laws that were designed to
create protections against computer hackers and misuse of digital accounts. You can read the US law here.
Ironically, all government
agencies have moved to electronic delivery or demand for electronic filing.
For example, the US Treasury shifted all paper delivery of federal benefits to
electronic deposits during 2013. The IRS expects almost all returns to be filed
electronically. While the government moves all services to web-based
systems; which require profiles, passwords, etc., these two laws make it
illegal or difficult for your named agent to help you.
At the same time, state
law is very slow to address the arena of digital assets. It is state laws that give your named fiduciary legal right to handle your affairs. These same laws do not address the practical need to manage digital assets. Internet providers and digital asset
providers have been slow to acknowledge the role of a duly appointed fiduciary.
Instead, when companies
address the rights of an estate administrator to your digital assets or access
for any reason, their policies usually make it harder for your named agent to
take legitimate action. Although, recently Facebook announced changes to its user policy
for deceased users. This new policy acknowledges that certain people may have the rights
to memorialize an account – check this article about Facebook. The providers of cloud storage, social media and email accounts base their authority to allow or not allow access to an account by a personal representative on the user agreement.
Just like you want a trusted friend or neighbor to have a
spare key to your home, it is prudent to create a digital "spare key". This is a digital inventory
and a way to secure and update passwords. There are a number of methods to do
this but none are perfect. No matter the method of inventory, your digital assets and your agent will be safer with a secure method of saving the keys and a written authorization to access. You can see a list of digital inventory service providers by clicking here.
Ask your named agent or professional fiduciary if they utilize a "DOLA" or contact us to help you set up a digital inventory.
