Financial transactions are increasingly occurring online. Many of us pay bills electronically, or have them automatically charged to credit cards or debited from checking accounts. Many of us also receive asset and credit card bills via email in lieu of receiving paper copies. Given that so many financial records are now digital, it may be necessary for an executor to have access to a decedent's email and other digital accounts. It may also be necessary for an agent acting under a power of attorney for an incapacitated person to have access to the person's digital accounts. On September 29, 2016, New York passed a law that will provide executors, attorneys-in-fact and other agents ("fiduciaries") with access to a person's "digital assets."
The law defines a "digital asset" as an electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record. In other words, if you have checking account statements emailed to you, an email containing the statement is a "digital asset," but the account itself is not.
The law distinguishes between a "catalogue of electronic communications" and the "content of electronic communications." A catalogue of electronic communications identifies each person with whom a user has had an electronic communication, the time and date of the communication, and the electronic address of the person. The content of an electronic communication is the substance or meaning of a communication which: (1) has been sent or received by a user; (2) is stored electronically by a custodian providing an electronic-communication service to the public or is carried or maintained by a custodian providing a remote-computing service to the public; and (3) is not readily accessible to the public.
For example, the fact that you received an email from your bank on the first day of every month is included in the catalogue. The text of the email and the attached statement is considered content. Under the law, a fiduciary will have access to the catalogue unless the person directs otherwise, but will not have access to the content unless the person expressly consents. Denying access to the catalogue or consenting to access to the content can be done either:
- by using an online tool if provided by the service provider, or
- by language in a will, power of attorney, trust agreement or other document.
In most cases, the catalogue will be sufficient to allow a fiduciary to discover a person's assets and liabilities, and for that reason the law allows access to the catalogue by default. Accordingly, in some cases it may not be necessary to revise New York estate planning documents immediately. However, if you wish to prevent your fiduciary from having access to the catalogue, or if you wish to give your fiduciary access to the content of your electronic communications, you will need to revise your documentation.
To date, 19 other states (including Connecticut and Florida) have adopted some form of this legislation, and in many others (including New Jersey), similar legislation has been introduced in the legislature. Accordingly, the discussion above may be relevant to you, even if you do not live in New York.