A Digital Will for a Digital World

computer-2982270_1920

The Digital World

When Copernicus announced that the Earth revolves around the Sun, there were likely some folks in his audience who politely nodded and returned to darning their socks, making pierogis, or whatever else 16th century Polish peasants were wont to do to pass the time.  Do not be a pierogi-making peasant, and pay heed to our equally revolutionary proposition: the world is becoming more and more digital each day, whether you like it or not, and it is high time to adapt – especially your estate planning procedures.

Consider that by 2017, 92% of Americans were using the internet, and of those users, 82% accessed the internet on their mobile phone.[1]  The average American spends 23.6 hours each week online.  You read that right.  The average American spends nearly a full day online each week.  For hacking-2903156_1920comparison, in 2000, only 67% of Americans were internet users, and the weekly average was only 9.4 hours.

This explosion in internet usage has changed the very concept of what constitutes an asset and how to account for those assets in your estate plan.  A computer was once a piece of tangible personal property, having no more importance in an estate plan as an old, but trusty, toaster oven that you were given as a wedding present.  Nowadays, however, your personal computer, and to a large extent your phone, are extensions of your person and are every bit as valuable as a safe or safe deposit box – and in many cases, more so.  Computers and smart phones have replaced rolodexes, photo albums, and shopping carts – just to name a few.

Florida’s Fiduciary Access to Digital Assets Act

Prior to 2014, no state or federal law adequately addressed the fate of “digital assets,” which we’ll define in a moment.  In late 2014, the Uniform Fiduciary Access to Digital Assets Act was first proposed by the Uniform Law Center (the folks who brought you such page turners as the Uniform Trust Code and the Uniform Commercial Code).  The first iteration of the Act reached too far, implicating electronic privacy and other hot-button issues; however in late 2015, the ULC published a revised version of the Act, and in 2016, the Florida Legislature passed the Fiduciary Access to Digital Assets Act, which is codified in Fla. Stat. § 740.001, et seq.  We will examine the importance and limits of the Florida Act below.   First, however, we address what exactly is meant by the term “digital asset” and how to protect them for when you die.

Digital Assets, Defined

A “digital asset” is “an electronic record in which an individual has a right or interest.”[2]  An electronic “record” in turn is any “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.”[3]  ImportaDigital Iconsntly, the term “digital asset” does not include underlying physical assets or liabilities, unless the asset or liability is, itself, a digital asset.  This means that the online marketplace that your hipster brother has set up to sell vintage typewriters is a digital asset, while the Smith Corona typewriters themselves that gather dust in his closet for “eventual” online sale, are not.  A laptop is not, itself, a digital asset, but its contents – and more importantly, its password – are.

Now that you understand what types of assets are digital assets and what types are not, let us walk you through the process of creating a “digital will.”

The Digital Will

When this article originally was published in May, Florida did not recognize digital or electronic wills.  Since that time, the Governor signed House Bill 409 into law, which will come into effect on January 1, 2020.  Prior to the passage of the bill, Florida typically recognized only those wills executed with the formalities set forth in Fla. Stat. § 732.502, such as the presence of two witnesses at the will’s execution.

Remote Online Notarization

The new law authorizes the use of “Remote Online Notarization” (RON) by Florida notaries public.  The notary (through FaceTime, Skype, or other videoconferencing means) will be able to witness two or more witnesses and the signer of the will “in real time using a computer or mobile device, even from different states.”  The notary will also be able to review the identification of each witness through such electronic means.

One of the primary benefits to RONs is that such sessions may be recorded and used as evidence in the event of a will challenge.  Additionally, the verification of signer and witness credentials performed by an online notary is similar to those used credit card companies provided by third parties and public sources to verify that the person is who they claim to be (for example, verifying mother’s maiden name).

There are safeguards in place for vulnerable adults, and witnesses must still be physically present with a vulnerable adult in order for a legal document (will, power of attorney, etc.) to be given any effect.  The bill provides for the safekeeping of an electronic will until the testator’s death by the appointment of a qualified custodian.

Florida at the Forefront

The bill puts Florida at the forefront of recognizing the validity of electronic legal documents, such as wills and powers of attorney, by authorizing their electronic creation as well as authorizing remote signing, remote notarization, and remote witnessing, even by a witness in separate location from both the notary and the principle signer.

Electronic Will: Definition and Effect of Current Law

The bill defines an electronic will as an instrument, including a codicil, executed with a person’s electronic signature, which disposes of the person’s property on or after their death and includes an instrument which appoints a personal representative or revokes or revises another will.  The bill does not replace the existing Code (in particular Fla. Stat. § 732.502), either in whole or in part.  The bill must be read together with the rest of the Florida Probate Code.

The requirement that the document be signed is satisfied by an electronic signature.  An electronically signed document is deemed to be executed if the document states that the person creating the document intends to execute and understands that he or she is executing the document in and pursuant to Florida laws.

Qualified Custodian

A qualified custodian of an electronic will is a person who meets all of the following requirements: (a) is domiciled in and a resident of Florida or is incorporated or organized in Florida; (b) consistently employs a system for maintaining custody of electronic records and stores electronic records containing electronic wills under the system; and (c) furnishes for any court hearing involving an electronic will that is currently or was previously stored by the qualified custodian any information requested by the court pertaining to the qualified custodian’s policies and procedures.

A qualified custodian must maintain an audio-video recording of an electronic will online notarization.  A qualified custodian is liable for the negligent loss or destruction of an electronic record and may not limit liability for doing so.  The bill also prohibits a qualified custodian from suspending or terminating a testator’s access to electronic records.  The bill requires a qualified custodian to keep a testator’s information confidential.

Revoking an Electronic Will

A testator, or some other person in the testator’s presence and at the testator’s direction, may revoke an electronic will by deleting, canceling, rendering unreadable, or obliterating it with the intent, and for the purpose of revocation.

Devising Digital Assets in Florida

The reliance on § 732.502 remains the case for tangible assets and assets other than digital assets (as defined above).  However, for digital assets, under Fla. Stat. § 740.003, entitled “User Direction for Disclosure of Digital Assets,” a user (defined as a person holding an account with a custodian of the digital assets, like a webmaster) may use an “online tool” to direct the custodian to disclose to a designated recipient some or all of the user’s digital assets, including the content of electronic communications.  An “online tool” means a user agreement that provides directions for disclosure or nondisclosure of digital assets to a third person.[4]  Interestingly, as between a will and the “online tool,” the online tool “overrides a contrary direction by the user in a will.”[5]

Thus, in Florida at least, bequeathing a digital asset is potentially easier than bequeathing a tangible asset, insofar as your user agreement (1) can covey your digital assets and (2) trumps your typical will. Therefore, just as it makes sense to use beneficiary designations on bank accounts to avoid probate, so too does it make sense to designate an individual (or individuals) to take control of your digital assets and digitally held assets at death, if possible under the applicable user agreement(s).

The Old-Fashioned “Catch-Alls”

But what about assets that may fall through the digital cracks, and for which you have not provided a succession plan in the applicable user agreement?  Even some digital platforms and domains have not kept up with the changing tides of digital estate planning, and the option to use a user agreement to designate a succession plan might not even be available to you.

Repeat after me, I need a regular, old-fashioned will.

Old Will

(OK, maybe not that old fashioned…)

Make this a mantra until you have a fully executed copy of that will in hand.  If you still have doubts, see our previous article on Estate Planning for Millennials.  We are confident that article will clear your doubts right up.

Within the Estate Planning for Millennials article, we explain why your will should include a section that deals with your digital assets and digitally held assets, which includes specific statements of intent regarding: (1) who will be given access to your digital assets; and (2) to which precise information such person is given access.  This person is essentially your “digital executor.”

So, to slightly revise: I need a regular, old-fashioned will…with terms regarding a digital executor and digitally held assets.   It rolls off the tongue!

In addition (and to also assist in the event of your incapacity), you should also give a list of your passwords to a “trustee” (such as the person holding your power of attorney or your actual attorney) with specific instructions as to whom and under what circumstances the trustee is to provide or release such passwords to the trusted individual and what that individual should do.

Closing Thoughts

If you take nothing else away from this article, just remember that when the modern American dies, he or she is leaving behind a sizeable “data inheritance.”   And inheritances can get messy, even with the most well-meaning family members.  For example, our firm has fought bitter probate disputes that were, quite literally, settled by a sister giving her brother their mom’s old photo albums and little else.  Today, online photo albums are generally more robust and documentary than tangible photo albums; and the right to access to such digital albums is equally as valuable (and potentially as contentious).  Digital estate planning should be treated with the same importance as traditional estate planning.

Buckle up, because it is high time for you to jump on the band(width)wagon.

ipad-820272_1920

Footnotes

[1] http://www.digitalcenter.org/wp-content/uploads/2013/10/2017-Digital-Future-Report.pdf

[2] Fla. Stat. § 740.002(9).

[3] Fla. Stat. § 740.002(21).

[4] Fla. Stat. § 740.001(16).

[5] Fla. Stat. § 740.003.

Leave a Reply