States Examine Laws Governing Digital Accounts After Death

In this digital era, if you die or become incapacitated, it is likely that an executive, fiduciary, personal representative or a family member will want access to your online banking accounts, investment portfolio, social media sites or email. If you have not entrusted someone with the accounts’ usernames and passwords, existing law makes it difficult to access them. State legislatures began to address this issue in 2013.

Twelve states introduced legislation this year proposing to grant expanded powers to an executor, personal representative or administrator of a person’s digital assets: Maryland, Massachusetts, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon and Virginia. So far, seven states have passed laws governing digital asset management after death: Connecticut, Idaho, Indiana, Nevada, Oklahoma, Rhode Island and Virginia. Maine passed a law this session to study the issue over the interim.

The new statutes laws vary widely. The Nevada law, enacted on June 1, originally proposed to grant a broad right of access to the contents of a deceased users’ email, social networking and other online accounts. However, it was amended to only allow an executor to terminate such accounts after Google and Planned Parenthood weighed in against it.

A number of the bills debated this year proposed that the personal representative have the power to take control of, conduct, continue, or terminate social networking accounts of a deceased person. Some bills would explicitly supersede a Website’s terms of service. Others would even allow the disclosure of the contents of a deceased person’s email and/or allow an executor to trump the decedent’s own wishes by gaining access to information the person specifically requested be kept private in a will or directly to an online service.

Legislators soon learned that this is a very complex issue and debates ensued about user privacy rights, data production and retention, access, authentication, fraud, and conflicting state and federal legal requirements. Online social media sites argued that both the 1986 Stored Communications Act and voluntary terms of service agreements prohibit companies from sharing a person’s information, even if such a request were included in a last will and testament. Under the federal law, Internet companies that provide storage for digital assets are prohibited from disclosing account information, even to families, without a court order. They say unless the federal law is changed, laws passed at the state level could be unconstitutional.

The Uniform Law Commission (ULC) established a committee to attempt to find a solution that adequately balances the concerns of access to a decedent’s account, with restrictions on the disclosure of the content of electronic communications imposed under federal law by the Electronic Communications Privacy Act. The ULC goal is to craft a manageable and understandable set of rules by 2014 that will be broad and technologically flexible enough to be used in any state. Opponents argued that it is premature for states to act at this time. A draft ULC model bill is expected early this fall.

The issue will likely resurface more broadly next year as some states are expected to propose the ULC model while others may add or stray from the model. Opponents include online social media companies and privacy advocates. Proponents include estate planners and state bar associations.