Delaware Passes Comprehensive Digital Assets Law
By Rana Fayez
The increase in Internet users means an increase in information being shared online. Lawmakers are beginning to address this question: What happens to your digital information and assets after you die?
Delaware is the first state to pass the most comprehensive law in the country that addresses how and who takes control of digital assets after the user passes away.
Physical assets are usually the first items to be considered when writing wills, but digital assets are created and acquired on a regular basis. American adults are spending more time online. According to a January 2014 Pew Research Center survey, 87 percent of American adults use the Internet, a 14 percent increase from 1995.
“Our reliance on digital assets and accounts only has the potential to increase,” said Ted Annos, an attorney at McCarter & English in Wilmington. “I think this law helps Delawareans to name someone they trust to have access to these accounts and I commend Governor (Jack) Markell and the primary sponsors of this bill for being in the forefront of an important issue.”
Before this bill was introduced, digital assets were largely governed by the Electronic Communications Privacy Act (ECPA) of 1986, which only focuses on privacy but applies the same principles to digital information whether the person is living or dead. There has been a call to revisit the law.
“What you have here is really an outdated federal law that needs to be addressed for today’s reality,” said Trisha Hall, an attorney at Connolly-Gallagher in Wilmington.
After an ongoing discussion between Assemblyman Darryl Scott, Attorney Trisha Hall, Deputy Director of Legislative Council Mark Cotrona and the Uniform Law Commission’s committee on Estate Law, it made sense to draft a model law and find a testing ground for it.
In other states, there is more paperwork and a longer waiting period involved in settling digital assets. “The industry wanted us to require a court order for each and every time someone requested access,” said Assemblyman Darryl Scott (D-31), the bill’s primary sponsor. “We ultimately did not agree with this process… the hope is to simplify things.”
States like Connecticut, Indiana, Rhode Island, Idaho, Virginia and Nevada have come up with similar laws. California passed the “Eraser Law” which allows minors to erase their digital activity once they turn 18, but Delaware is the first state to pass the most comprehensive law regarding this issue.
The industry has voiced its own concerns about the Delaware law and potential conflict with current user privacy agreements. However, lawmakers insist that the intention of the law is to help and not hinder privacy.
“The industry continues to raise concerns about privacy, saying that the law goes too far,” said Scott. “I find the concern to be more than a little disingenuous when the first issues they raised were about cost.”
“The letters in the shoebox in the closet are equal to an e-mail account… we’re trying to treat digital and tangible assets in a similar fashion,” he said.
Just like any modern media law, the Digital Assets Law gives Delawareans the option to opt out. There have also been a couple of amendments to it in regards to interpreting the term “incapacitated” and the technological practicality of executing this law.
It is expected that the law will be refined and amended once it actually goes into effect and can be put to the test in 2015. Most importantly however, it does not apply to an employee’s digital assets within a business. For example, if an employee passes, the company would still retain all control over their business-related accounts.
With over 80 percent of Delaware having Internet access, the amount of information being created by people in the state is growing. As internet activity grows, legislation to regulate online activity will also grow as a result.