The Covid-19 pandemic accelerated the shift towards a more digitally-enabled world. In this digital world, the meaning of property and assets has changed.
Until recently, there was no formal recognition of these assets as an individual’s property. This posed several challenges as to how these assets can be transitioned or passed on post death.
Most digital accounts do not permit a transfer of ownership. So, your family could potentially be found guilty of breaking the law, even though the details may have been given to them legally.
Most state laws and directives that govern personal property and assets were enacted before email and social media and do not account for digital property. There was hence a need for a new set of legally acceptable guidelines.
RUFADAA for Digital Assets
Status: This law has been enacted and effective from July 1, 2017.
Description: Fiduciary access to digital assets. Enables a fiduciary to gain access to the digital accounts and digital assets of the person or estate to whom he owes a fiduciary duty upon making a written request to the custodian of the digital accounts and digitals assets and submitting proof of the fiduciary relationship.
The Uniform Law Commission created the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2015, which received widespread support.
Virginia passed the revised RUFADAA bill to smoothen the process for executors or attorneys to disclose the digital asset to its authorized recipients or fiduciaries under a legal framework, as directed by the user digital estate plan or will. This bill enables the user to manage digital assets along with their physical properties. It clearly specifies the authority of users in managing digital assets.
What makes RUFADAA different is that for the first time, property law recognizes the existence of digital property as a property right that can be managed, conserved, and, in certain instances, accessed by third parties, in much the same manner as other rights in real and tangible personal property.
The most useful aspect of RUFADAA is that it gives clear instructions for how a person’s digital assets are to be treated should a fiduciary seek access, which may include not only executors after death, but trustees, court-appointed guardians, and attorneys-in-fact.
The starting point is that online service providers can create an “online tool” that functions as a form of “digital power of attorney” to specify who has control and access to that specific site.
RUFADAA provides a clear legal framework for digital asset rights to be specified in traditional legal documents (e.g., Wills and powers of attorney). And clarifies that it’s only in the absence of an online tool, or any legal documents, that finally, the service provider’s own Terms of Service will control.