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How can access to digital assets and accounts be facilitated?

A Bill known as Senate File 2112 that was recently passed by the Iowa legislature has the potential to enhance the access of fiduciaries to digital assets.  As it currently stands in Iowa, many other states, and Canadian provinces including Ontario, the law has not been formally amended to reflect technological advancement and the prevalence of digital assets in estate administration.  This represents a major problem in situations where an individual has not considered his or her digital assets when creating or updating an estate plan.  The result is most often that digital assets and online accounts are inaccessible or accessible only after a Court Order is obtained, a process that may add significant time and cost to an otherwise simple estate administration.

fridaySenate File 2112 provides that fiduciaries, which class is explicitly stated to include estate trustees, guardians, and those authorized to act under a power of attorney, may access digital information on behalf of an incapable or
deceased person who has authorized them to do so.

In circumstances where there is no written direction granting access of the fiduciary to the user’s information, an estate trustee is permitted to access a deceased person’s digital assets upon providing the following to the custodian of the assets:

  1. A written request for disclosure;
  2. A certified copy of the death certificate;
  3. A certified copy of probate, an affidavit made pursuant to the Bill, or a file-stamped copy of the court order authorizing the fiduciary to administer the estate; and
  4. If requested by the custodian of the assets, any of the following:
    • A username or other unique account identifier to identify the user’s account;
    • Evidence linking the account to the user;
    • An affidavit stating that the disclosure of the digital assets is reasonably necessary for administration of the estate; and/or
    • A finding by the court that either (1) the user had a specific account with the custodian of the assets, or (2) disclosure of the digital assets is reasonably necessary for administration of the estate.

The provisions of the bill are intended to apply unless the power that it provides is restricted by Court Order or limited within the document appointing the fiduciary.

Until similar legislation is enacted in Ontario, drafting solicitors should remember to canvass the important issue of digital assets and accounts when assisting clients in creating or updating estate plans to prevent inaccessibility during incapacity and/or following death.

Have a great weekend.

Nick Esterbauer