New Access to Digital Assets Act Takes Effect July 1, 2017
As the world has changed, financial and other transactions are increasingly occurring online. While we used to get mail through our post office box, or store photos in albums, now we increasingly use computer servers and the Internet to store and access such data and communications. While we previously stored documents in file cabinets, now many are stored in the “cloud” and we access them through the Internet. Many of us both receive and pay bills electronically. Even such records as air mileage points or library records, customer loyalty programs or social media accounts, are increasingly stored online through passwords to allow us access. Given that so many communications and financial, business, and other records are now digital, it may be necessary if a person dies or otherwise loses the ability to manage his or her digital assets for a person appointed (a personal representative, conservator, attorney under a power of attorney, or trustee) to have access to a decedent’s email and other digital accounts.

Effective July 1, 2017, the Revised Uniform Fiduciary Digital Assets Act (RUFDAA) takes effect in South Dakota. That law will provide executors, trustees, conservators, attorneys-in-fact and other agents (“fiduciaries”) with access to a person’s “digital assets.”

The law defines a “digital asset” as an electronic record in which an individual has a right or interest. The term does not include the underlying asset or liability unless the asset or liability is itself an electronic record. In other words, if you have a bank account statement emailed to you, an email containing the statement is a “digital asset,” but the account itself is not. The companies that store the digital assets on their computer services are called “custodians”. The law attempts to balance privacy interests with the fiduciary’s need for access by making a distinction between a “catalogue of electronic communications” and the “content of electronic communications.”

A catalogue of electronic communications identifies each person with whom a user has had an electronic communication, the time and date of the communication, and the electronic address of the person. The content of an electronic communication is the substance or meaning of a communication which: (1) has been sent or received by a user; (2) is stored electronically by a custodian providing an electronic-communication service to the public or is carried or maintained by a custodian providing a remote-computing service to the public; and (3) is not readily accessible to the public. For instance, an email catalogue would contain the “from” entry, the date and time, and the “to” entry, but not the substance of the email.

As a practical example, a fiduciary might need to access a catalogue in compiling an inventory of the assets of the decedent or person who has lost the ability to manage his digital assets. If the fiduciary notices in the catalogue that the decedent has received emails from his bank or credit card purveyor on the same day of every month in the catalogue, the fiduciary may request of the company a statement of the decedent’s account. The text of the email and the attached statement is considered content. Under the law, a fiduciary will have access to the catalogue unless the person directs otherwise, but will not have access to the content unless the person expressly consents. Denial of access to the catalogue or consent to access of the content is made pursuant to a three-tiered system of priority:

First, if provided by the service provider by using an online tool (separate from the general terms of service) that allows the user to designate another person to access the content or deny consent to access to the catalogue (such a tool can also direct the custodian to delete the digital assets), or

Second, if the first priority does not apply, then the priority becomes the designation of the decedent or person who loses the ability to manage their digital assets who has previously designated someone to have such access in a will, power of attorney, trust agreement or other record; or

If neither the first nor the second priority apply, only then do the general terms of service of the user’s account take precedence and if they prohibit fiduciary access or do not address fiduciary access, the fiduciary seeking access must go to court and obtain a court order to access. This can be costly and time consuming.

It is important to designate who you want to have such access (and for different accounts it can be multiple designees) and update your wills, trusts, and powers of attorney to provide such access if there is no online tool used. It is also important when conservatorships are considered, that digital asset access be designated.

In many cases, the catalogue will be sufficient to allow a fiduciary to discover a person’s assets and liabilities, and for that reason the law allows access to the catalogue by default. If you wish to prevent your fiduciary from having access to the catalogue, or if you wish to give your fiduciary access to the content of your electronic communications, you will need to revise your documentation. As we move online with our transactions, this new statute is one effort by the law to keep up with society’s methods of communication and data storage.

To date, over 30 other states have enacted some form of this legislation, (including all states bordering South Dakota). It is one of the quickest enactments ever of a proposed uniform act since it was only finalized in 2015.

About Terry N. Prendergast  

Terry Prendergast is a South Dakota trusts and estates and trust company attorney at Davenport Evans. Terry joined the firm in 2017 with a prestigious career of nearly 40 years practicing law in Sioux Falls. Terry has provided legal counsel to hundreds of trust clients with trusts containing assets ranging from a few thousand dollars to over $5 billion. He has worked with trust company clients with over $180 billion in assets under management in South Dakota. In addition, he practices in real estate, corporate and business law and insurance regulatory law. Get to know Terry through his online biography or contact him at 605-357-1229 or [email protected].

Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the State’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit