Florida Passes Fiduciary Access to Digital Assets Act by Richard A. Berkowitz, JD, CPA
Facebook recently sent me a notification about the birthday of a close friend who passed away a year ago. Did I want to post a birthday message? After a moment of mourning, I was struck by the conundrum fiduciaries face in managing the electronic communications of those who are no longer here.
Today, individuals store most all of their important data electronically, including emails, text messages, social media postings, banking and other financial transactions, as well as photos and audio/visual files. Federal and state privacy laws prohibit unauthorized users from accessing an individual’s digitally stored data after the individual passes away or becomes incapacitated. As a result, this lack of access has prevented survivors from paying bills, downloading cherished photos or identifying insurance policies or financial accounts for which a decedent did not make them aware.
For residents of Florida, however, the ability to preserve, manage, share, and/or dispose of these digital assets and electronic records after death is now possible under the recently enacted Florida Fiduciary Access to Digital Assets Act.
Effective July 1, 2016, Floridians may authorize a named fiduciary to act on their behalf to access, manage and control the personal and business-related digital property they leave behind after death, including the following:
- Email accounts
- Financial banking, credit cards, brokerage, insurance and bill-pay accounts
- Accounting firm or healthcare provider portals
- Utilities, including Internet service providers
- Tax filing sites, such as e-file and EFTPS accounts
- Social media accounts, including Facebook, Twitter, Instagram, Snapchat and LinkedIn
- Retail shopping sites, such as Amazon, Best Buy, Target
- Travel accounts used for hotel bookings and managing airline mileage
- Entertainment sites such as iTunes and Netflix
- Sites for storing and sharing photos, videos and important documents, including Google Cloud, Amazon Drive or Shutterfly
Naming a fiduciary ensures that these personal records are addressed after an individual’s death in the same way and with the same legal authority that a fiduciary will manage one’s tangible assets. Special care should be taken to designate an appropriate custodian who an individual can entrust to act on behalf of his or her best interests. This may include a personal representative, a guardian of the property of minors or incapacitated persons, or a trustee or administrator of an estate.
Designating a custodian may be accomplished through a revocable trust, a power of attorney or a will. The latter, however, will become public record after one’s passing. Individuals should also look to each of their online service providers to determine if there is an option for them to name a custodian directly on the providers’ websites. For example, Facebook users may log in to their accounts and designate a “legacy contact” to manage their profiles, download photos and even post messages after their passing. Similarly, Google allows its users to name and grant permission for their friends or family members to download data from their accounts, when those accounts go unused for three months.
To take advantage of the new law, individuals should provide to their named fiduciary a current inventory of all of their digital assets and electronic communications and include URL’s, locations of files, login information, passwords and answers to security questions, which should be updated periodically. Under the law, individuals may specify the amount of access they grant to a custodian as well as details on how they wish each electronic record or digital asset to be preserved or destroyed. For example, individuals may grant a fiduciary the authority to access the complete contents of their digital assets, or they may limit a custodian’s access to a listing of the records. They may grant the custodial permission to cancel subscriptions, continue making automatic payments from bank accounts or delete or preserve social media accounts.
As technology advances, records management and estate planning options will evolve to keep up with these changes. In response, individuals should regularly review and update their estate plans and adapt to new planning methods to ensure their estates are properly settled, to their wishes, after death.
About the Author: Richard A. Berkowitz, JD, CPA, is founder and CEO of Berkowitz Pollack Brant Advisors and Accountants, where he works with individuals, families and entrepreneurs to develop comprehensive income, estate and business plans that meet goals and improve tax efficiencies. He can be reached at the CPA firm’s Miami office at 305-379-7000 or via email at firstname.lastname@example.org.