Colorado’s new law on digital assets

One of the developing areas of planning law is how to handle digital assets.  Fortunately, Colorado has just enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). This new act will be effective as of August 10, 2016.

RUFADAA, C.R.S. § 15-1-1501 et seq., sets forth the circumstances under which a fiduciary is allowed or may gain access to digital assets, while also protecting the privacy interests of persons who make written plans, such as wills, trusts, and powers of attorney.

RUFADAA also takes into account the interests of the custodians of the digital assets; a custodian is defined as the person or entity that carries, maintains, processes, receives, or stores a digital asset of a user and includes entities such as banks, Google, Yahoo, and Facebook. RUFADAA offers default rules based on the assumed intent of a person, and thereby limits a fiduciary’s automatic access to digital communications, absent consent or a court order.

Absent a designation in an online tool, RUFADAA provides default rules for digital assets a fiduciary may access and how a fiduciary may gain access to additional information. All of these default rules may be changed with express instruction in a governing instrument.

These are the new default rules:

Personal representative. Unless the decedent consented, a personal representative may not access the content of the decedent’s electronic communications unless he obtains a court order finding the disclosure of the content of the communications is reasonable necessary for the administration of the estate. However, even absent express consent, a personal representative may access a decedent’s other digital assets, including the catalogue of the decedent’s electronic communications. The catalog of electronic communications is defined as “information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of the person.”

Trustee. When the trustee is the original user or account holder for the digital asset, the trustee may access all digital assets, including the content of electronic communications. When the trustee is not the original user or account holder, he may access the content of electronic communications if it is specifically authorized by the trust. Even absent express consent, the trustee may access the trust’s other digital assets, including the catalogue of electronic communications.

Conservator. A conservator may access the digital assets of the protected person only pursuant to a court order that was entered after the opportunity for a hearing.

Agent under a power of attorney. An agent under a power of attorney may access the content of the principal’s electronic communications to the extent authorized by the power of attorney. An agent with specific authority over the principal’s digital assets or with general authority to act on behalf of the principal may access the principal’s other digital assets, including the catalogue of electronic communications.

RUFADAA does not change a fiduciary’s duties.  Instead, RUFADAA provides that a fiduciary’s duties with respect to managing the Person’s tangible personal property also apply with respect to managing the Person’s digital assets. These duties include the duty of care, duty of loyalty, and duty of confidentiality.