In its most recent legislative session, which ends this month, the Connecticut General Assembly failed to pass Connecticut’s proposed version of the Uniform Fiduciary Access to Digital Assets Act (UFADA). Fiduciaries are charged with the responsibility to collect, protect and preserve the assets of a deceased or incapable individual. In modern life, electronic and digital assets are increasingly as important and valuable as physical assets. However, most agreements that govern online account access do not permit a fiduciary to access or utilize the account. Lack of access can lead to a substantial financial loss. Equally important in many respects is the sentimental value of certain digital assets. Social media accounts are often terminated or frozen on the death of the account holder. Denying access to these accounts can cause greater emotional distress for an already grieving family.
Unfortunately, the law continues to lag far behind the reality of modern economic and social life. Any fiduciary acting on behalf of the individual has the power and duty to manage and control assets to the same extent the individual could manage and control the assets. Traditional brick-and-mortar banks and brokerage firms have ample experience dealing with fiduciaries. They have adopted policies and procedures that mitigate the risk of improper use or access by a fiduciary. The law and the courts have been successfully managing these risks for centuries. However, industry providers of electronic and digital accounts seem paralyzed by fear of the risk of privacy breaches if a fiduciary access is required. Significant progress needs to be made to ensure that fiduciaries have the power to manage, protect and control all of an individual’s assets, including digital and electronic assets, while still addressing privacy concerns.