Virtual Assets and Real Advice - Clients Need Candid Advice Regarding their Digital Assets (7 of 10)

(Part 7 of 10 part series)

Uniform Laws have a checkered past when it comes to adoption rates.[i]  The most successful uniform act, the Uniform Commercial Code, was first published in 1952 and has since been enacted by all fifty states.[ii]  On the other hand, many other uniform laws, such as the Uniform Criminal History Records Act of 1986 or the Uniform Apportionment of Tort Responsibility Act of 2003 have yet to be adopted by any state.[iii]  Perhaps the most relevant Uniform Law to the current discussion would be the Uniform Probate Code (“UPC”).[iv]  The UPC was originally promulgated in 1969 in order to simplify probate law as well as related laws on guardianships, powers of attorney, and non-probate transfers at death.^[v]  As of 2014, only seventeen states and the US Virgin Islands have enacted the UPC in its entirety.[vi]  If the UFADAA is adopted at the same rate as the UPC, that will leave millions of people in the large majority of states without statutory rights in the disposition of their digital assets.

There are several internet and tech industry groups that have successfully opposed state laws giving representatives access to a deceased or incapacitated individual’s digital assets.[vii]  The Internet Alliance (“IA”), which describes itself as “the leading voice representing Internet companies in the 50 states,” claims to have a “20-year track record of blocking or mitigating legislation detrimental to the Internet and e-commerce.”[viii]  Among its members are giants like Amazon, Comcast, Google, and Yahoo!   The State Privacy and Security Coalition (“SPSC”) also has Google and Yahoo! as members, along with other big names like eBay, Facebook, and Verisign.[ix]  Recent events surrounding the stalling of a bill in Oregon and the watering down of Nevada’s law is indicative of how much influence these groups can have.[x]

In January 2013, Oregon’s Senate considered SB54, which would have expanded the statutory definition of property to cover digital assets, “including without limitation, any words, characters, codes, or contractual rights necessary to access the digital assets.”^[xi]  SB54 would require a provider “to transfer, deliver or provide access to accounts or electronic copies of assets to [a] personal representative, conservator or settlor upon written request.”^[xii]  Although promising in scope, the bill was promptly stalled in the Senate Judiciary Committee after opposing testimony from IA, the Motion Picture Association of America, SPSC, and TechNet.[xiii]  The committee set a date a date to rework the bill, but when the date arrived a few weeks later, the bill was removed from the docket and has yet to make it out of committee.^[xiv]

  As originally proposed, Nevada’s law would have given representatives power to “take control of, conduct, continue or terminate” a decedent’s digital assets.[xvi]  Both IA and SPSC were among those who weighed in against the measure, asserting that it violated federal privacy laws and the contractual interests of the parties.[xvii]  In a letter to the Committee Chairman, SPSC provided an alternative solution that kept most of the law intact but removed all powers except for the “power to terminate.”[xviii]  The law was eventually enacted, but only after it had been redrafted to match the suggestion given by SPSC.[xix]