RUFADAA's Blindspots

RUFADAA, the Revised Uniform Fiduciary Access to Digital Assets Act, has been enacted in most states as a measure to support the passing on of digital assets as part of an estate. Digital assets are difficult to pass on for a plethora of reasons, but the main barriers are password-gating, privacy concerns, and lack of infrastructure. Not only can it be difficult to safely coordinate the transfer of login information to beneficiaries, it may also be illegal for them to access accounts without the proper estate plan. Privacy is not protected once an account is entered as fine-tuning of data access is not natively available in applications. The actual transfer of assets is another issue entirely. However, RUFADAA’s blindspots are not due to regulatory oversight by the drafters of the statute. The requisite software to put RUFADAA into effect did not exist when RUFADAA was enacted. Bequest solves this problem and abstracts away all tech savvy-ness while remaining compliant and secure. It is important for planners to understand RUFADAA’s limitations so they can best serve their clients and make sure all assets are being reached.

Firstly, what does RUFADAA let fiduciaries do? In the event that digital assets are not mentioned in an estate plan, RUFADAA gives fiduciaries default access to electronic message catalogs. This means fiduciaries will get to see the sender, recipient, and timestamps of electronic communications like emails and instant messages. This is analogous to seeing physical mail without opening it: all the information that could be gathered from an envelope can be gathered from electronic communications. This allows the fiduciary to piece together the estate administration by figuring out where the decedent may have banked and any important accounts they may have had either for the recovery of assets or paying off creditors.

If a fiduciary is meant to have access to the actual contents of electronic messages, that must be specified in the estate documents. Language granting access to the contents of all digital communications can be used, but this could cause privacy issues or familial conflict depending on the decent’s personal relationships. If specific account access is granted, it is very important not to miss any accounts. More granular access controls than this, like only reading messages from certain senders, can be written into estate documents, but cannot be enforced without the help of software like Bequest. The digitization of communication is great for aggregating data and keeping track of conversations, but it also means all of this data will be compromised if an estate grants message content access to a fiduciary. This is as if all physical letters, cards, and notes that someone had ever sent or received were placed in a box and provided to their family at their passing. People have previously had more discretion over what was kept and what was discarded, but digital data does not work this way. Rather than spending inordinate amounts of time deleting sensitive messages, specifying which data can be accessed or not, and hoping fiduciaries will be respectful of privacy, Bequest can facilitate fine-grained data release configurations.

Custodians have also proved to be a barrier to digital asset distribution. While RUFADAA does not require custodians to obtain a court order before releasing a decedent’s data, it is still a prerogative they take. Custodians are concerned that they may face repercussions for releasing the data, in turn leading to them asking for a court order which causes significant hassle to executors and attorneys. The actual transfer of assets is also an issue that RUFADAA does not really address, and current structures like Trusts, PoDs, and Wills are not amenable to estate laws. Bequest solves this by allowing executors non-custodial access to a limited amount of functions over a limited amount of data. Rather than requiring password-sharing or full account access/transfer, Bequest allows estate plans to be configured on digital accounts such that all digital assets remain in the accounts while the fiduciaries get access to a limited scope of necessary functions like transfers to beneficiaries and liquidations without requiring a court order. Estate planning laws for digital assets are quite robust, but the software required to put the laws into effect is lagging behind. Bequest solves these problems with our quick, compliant platform.