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George F. Bearup, J.D. Senior Legal Trust Advisor

20-Apr-18

Accessing Digital Assets- Powers of Attorney, Wills, Trusts Use the word ‘Content”

Take-Away: With Michigan’s adoption of the Revised Uniform Fiduciary Access to Digital Assets Act, there is still the need for express authority given to the fiduciary in a Will, Trust, or Durable Power of Attorney to grant access the contents of the individual’s digital asset. Giving authority to the fiduciary to ‘deal with’ or ‘handle’ digital assets will not be sufficient to empower the fiduciary to access the contents of a decedent or principal’s digital assets.

Background: Welcome to the world of uniform laws.

  • Uniform Power of Attorney Act: Michigan has not adopted the Uniform Power of Attorney Act (UPOAA) which was created in 2006. One of the fundamental principles of the Uniform Power of Attorney Act which has been adopted in 22 states, is that a principal must expressly grant to the agent authority over the contents of electronic communications. [UPOAA Section 301(a)(8).] Consequently, any generic delegation of authority to the agent under the power of attorney, e.g. ‘any powers that I might have over my assets I hereby delegate to my agent acting under this durable power of attorney,’ is insufficient to give to the attorney-in-fact access to the contents of the principal’s digital assets. Therefore,  a generic reference in a durable power of attorney to ‘all powers’ [often found in a ‘short form’ durable power of attorney] will only permit the agent to receive a catalogue of the electronic communications sent or received by the principal, but not the contents those electronic communications. This distinction is sometimes analogized to the postal mail- an envelope vs. a letter inside the envelope: the fiduciary can gain access to the envelope, but not to the letter that is inside the envelope without express authorization to also access the letter.
  • Revised Uniform Fiduciary Access to Digital Assets Act: In early 2017, Michigan adopted the Revised Uniform Fiduciary Access to Digital Assets Act (the Revised Act).  Several parts of this Revised Act were based upon the Uniform Power of Attorney Act.  The Revised Act creates a hierarchy of agent-access to digital assets dependent upon the text used in the power of attorney or another governing instrument. [Comments to Act, Sections 9 and 10.] The Revised Act mimics the Uniform Power of Attorney Act as it creates the same catalogue/content/ dichotomy  for electronic communications akin to the envelop/letter Section 9 of the Revised Act requires that “a power of attorney must expressly grant an agent authority over the content electronic communications” before an agent may access to such content. [Section 9 of the Act.] What is important is that the Revised Act makes it clear that if the governing instrument only grants (i) ‘general authority to act on behalf of a principal’, or  (ii) ‘specific authority over my digital assets,’ the fiduciary may only obtain a catalogue of the electronic  communications sent or received by the principal. [Section 10 of the Act.]That catalogue of electronic communications is limited under the Revised Act to information that identifies each person with which a user has had an electronic communication, the time, date of the communication, and the electronic address of the person.” [Section 2(4).] In short, while the Revised Act contemplates that a governing instrument (will, trust, durable power of attorney) may give to a fiduciary express ‘authority over digital assets,’ that general delegation of power and authority that refers to digital assets does not permit access to the contents of those same digital assets, which is usually what a fiduciary needs to review.

Content vs. Catalogue: The envelope/letter distinction used in the Revised Act is a bit of a surprise when you read the definitions provided by that Act. Consider the following definitions:

– Digital Asset: means an electronic record in which an individual has a right or interest

– Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

Opt-In Approach: If you combine those two definitions, digital asset necessarily includes all information stored in any electronic medium that is retrievable in any form, which defines digital asset  sufficiently broadly enough to include everything that anyone would want to retrieve from the Internet. Consequently, it is not clear, in light of the broad definition of digital assets as used by the Revised Act, and the expansive interpretation usually applied to the word authority over those digital assets, why a governing instrument like a will, trust, or durable power of attorney would not include access to the contents of those digital assets. But the Revised Act uses the letter vs envelope distinction, which requires an affirmative opt-in approach if the principal wants their fiduciary to access the content of their digital assets.

Vague Grants of Authority: Nor does this Act address how to proceed when language is used in a will, trust or durable power of attorney is other than the precise examples used in the Revised, Act either the greater grant ‘express authority over the contents of the electronic communications’ or the lesser grant of ‘specific authority over my digital assets.’  In Michigan, since it has not adopted the Uniform Power of Attorney Act, most powers of attorney are created by lawyers who use their own forms, meaning there is no set format for a durable power of attorney or the authority that the durable power of attorney delegates to the agent. For those states that have adopted the Uniform Power of Attorney Act, any power of attorney instrument will be interpreted with reference to the Revised Act. An incidental power given to an agent under the Uniform Durable Power of Attorney Act includes the ‘authority to access communications intended for, and communicate on behalf of the principal, whether by mail, electronic transmission, telephone or other means.’ [Section 203(9).] The Comments to this uniform law section note that this section ‘includes authorization… to access communications intended for the principal, and to communicate on behalf of the principal using all modern means of communication. [Comment to Section 203.] All of which begs the question, at least when looking at the authority delegated under a durable power of attorney to deal with the principal’s digital assets, if the power to access communications by electronic transmission, constitutes an express grant of authority over the content of the same electronic communications under the Revised Act, as adopted in Michigan? Should access be construed to grant authority over the entire contents of the digital assets accessed? Neither Uniform Act answers this question.

Practical Implications: Consider the recent decision of the Massachusetts Supreme Judicial Court in Ajemian vs. Yahoo, Inc. 2017 WL 458270 (Mass. 2017) where the personal representatives of the decedent’s estate asked for, were denied, and then filed a lawsuit against Yahoo to gain access to the decedent’s digital asset email account. The request for the digital assets started back in 2009. Eight years later the personal representatives finally got a partial answer from the Massachusetts’s Court. That Court made a few important findings, but it ultimately passed the buck back to the probate court where the original petition for access to the decedent’s email account was initially filed. While Massachusetts has not yet adopted the Revised Act, the Supreme Court did find the following:

  • A user possesses a property right in the contents of his/her email account;
  • Nothing in the federal Stored Communications Act indicated an intention by Congress to preempt state law;
  • In using language like lawful consent in its Stored Communications Act, Congress contemplated certain forms of informed consent;
  • The Stored Communications Act allows a personal representative to lawfully consent to the release of a decedent’s stored communications in accordance with the “broad authority of lawfully appointed personal representatives to act on behalf of a decedent;” and
  • Yahoo was not required to release the contents of the decedent’s email account to the decedent’s personal representatives; the Court’s decision only holds that the federal Stored Communications Act does not prohibit such a disclosure to the user’s personal representatives.

Accordingly, after 8 years of protracted litigation, after 8 years of keeping a probate estate open in order to access to the contents of his email account in search of the decedent’s assets, after 8 years of legal fees, the case was remanded back to the probate court for more litigation to determine whether Yahoo’s terms of service [TIS] agreement signed by the decedent blocked the disclosure of the contents of the decedent’s email account: delay, legal expense, keeping the estate open 8 years, and a continuing cloud over the distribution of the decedent’s assets, all because the personal representatives could not access the contents of the decedent’s email account.

Conclusion: While lots of interpretive questions continue to swirl around the new Revised Uniform Fiduciary Access to Digital Assets Act adopted in Michigan, what is important is the envelope/letter distinction that the Revised Act makes with regard to an individual’s governing instruments. If the testator, settlor, or principal under a durable power of attorney wants their fiduciaries to have immediate access the contents of their digital assets to facilitate estate administration without needless delays or legal expense incurred in litigation with Internet service providers, any reference to the authority given to the fiduciary in the governing instrument should clearly include giving the fiduciary ‘access to my digital assets, including and not limited, to the contents of all my digital assets, wherever they are located.’ As we review our client’s legal documents, this is something to look for- does the grant of authority over digital assets include access to the contents of my digital assets.