FAQ about the Michigan Fiduciary Access to Digital Assets Act
Michigan recently passed the “Fiduciary Access to Digital Assets Act,” which will become effective on June 27, 2016. The new law is a much needed update to match Michigan estate planning rules with the realities of our digital and electronic lives.
It used to be that when a parent passed away, or needed help with financial matters, their children would simply sort through their paper files in a desk, home safe, or safety deposit box. But now that our personal and financial accounts have moved online and in the cloud, it has become increasingly difficult for your power of attorney or personal representative to gain access to your financial assets, or even things like your pictures stored on your smartphone.
A lot of companies were simply not providing your legal fiduciary with access to your online accounts, which led to frustration from family members unable to close out their loved one’s accounts after passing. In response, many states have passed new laws that provide your estate plan fiduciary (personal representative, power of attorney, successor trustee, etc.) with the same rights to your digital assets as your personal property and tangible financial assets.
Below are frequently asked questions about how the new Michigan Fiduciary Access to Digital Assets Act will operate as part of your estate plan:
What is considered a digital asset?
A digital asset means “an electronic record in which the user has a right or interest.” Common examples include your email account, your brokerage account, your social media accounts, or anything stored in the cloud, such as iCloud or Dropbox.
Specifically excluded from this law are any digital assets of an employer used by an employee in the ordinary course of business – which means that if you use your work email for personal business, your fiduciary may not be able to access your account after your passing.
What is a digital custodian?
A digital custodian means “a person that carries, maintains, processes, receives, or stores a digital asset of a user.” In other words, the companies that control access to the electronic systems where your digital assets are stored, such as Microsoft, Apple, Facebook, etc.
Who can request your digital assets from a digital custodian?
The new law names the following 4 categories of people who can legally request access to your digital assets:
- A fiduciary acting under your will or power of attorney
- A personal representative acting for your probate estate
- A trustee acting under a trust of which you are the grantor
- A court-appointed conservator for your affairs
But it is possible for you to override access to your digital account by the above persons if the digital custodian uses an online tool for you to designate a person with authority to access your account. For example, if Facebook allows you to name a legacy contact who has the right of access to your profile after your death, that designation would override your personal representative or trustee.
What is needed for a digital custodian to disclose your digital assets?
In order for the fiduciary to receive your digital assets, the following items must be provided to the digital custodian:
- A written request for disclosure
- A copy of your death certificate (if applicable)
- A copy of your personal representative’s letters of authority, or a copy of your power of attorney or certificate of trust that grants authority to your fiduciary
In addition, the digital custodian may also require any of the following information when applicable:
- A unique account identifier assigned by the custodian to identify your account
- Evidence linking the account to you (such as an email referencing your account with the custodian)
- An affidavit stating disclosure of your digital assets is necessary to administer your estate
- A finding of the court that disclosure is necessary to administer your estate
How long does a digital custodian have to respond to a disclosure request?
A digital custodian must comply to a request for disclosure, or termination of an account, with 56 days. If the custodian does not respond within 56 days, your fiduciary has the right to obtain a court order directing compliance.
How is the disclosure made by a digital custodian to a digital asset fiduciary?
The digital custodian has discretion to disclose your digital assets to a fiduciary in any of 3 ways:
- Grant your fiduciary full access to your account.
- Grant your fiduciary partial access to your account sufficient to perform the required duties (for example, providing access to only view your brokerage account statements, not make any trades).
- Provide a copy of a digital asset that the user could have accessed if they were alive (for example, forwarding the picture files stored in a cloud account).
In addition, the digital custodian may charge a reasonable fee for the cost of disclosing your digital assets, and the custodian is not required to disclose any assets that were deleted by you prior to the fiduciary’s request.
What are the legal duties of your digital asset fiduciary?
The same legal duties that apply to management of your tangible personal property and financial assets apply to management of your digital assets, including the duty of care, duty of loyalty, and duty of confidentiality.
And the law specifically says that your fiduciary’s power cannot be used to impersonate you. For example, no one is allowed to post things in your social media accounts pretending to be you.
This is a brief overview of how the new Michigan Fiduciary Access to Digital Assets Act will operate. If you are interested in learning more about how to incorporate access to your digital assets as part of a comprehensive estate plan in Michigan, please contact Attorney Adam Zuwerink at email@example.com or 231-457-4235.