This series is co-written by attorney, Steven Andrew Jackson, Esq. and Mari Peterson, former law firm administrator. This is a 5 part series.
In this series we have been addressing the gaps in estate planning due to the rise of “digital assets” in our technology driven world. We’ve discussed the gaps that exist in estate planning laws creating confusion and lack of clarity.
THE UNIFORM LAW COMMISSION SOLUTION TO THE RESCUE
Turns out these issues are starting to cause confusion in the estate planning and estate administration world and confusion is the last thing you want in the law. Confusion means inconsistent application of the law, more time to administer and higher costs to all parties due to litigation and who wants that?
The Uniform Law Commission
So, what is the solution? The Uniform Law Commission (ULC) which is responsible for proposing uniformity in state laws.
“The state uniform law commissioners come together as the Uniform Law Commission for one purpose—to study and review the law of the states to determine which areas of law should be uniform. The commissioners promote the principle of uniformity by drafting and proposing specific statutes in areas of the law where uniformity between the states is desirable. It must be emphasized that the ULC can only propose—no uniform law is effective until a state legislature adopts it.
The ULC has a commission in each state which works with that state’s legislature to propose these laws and when applicable, bring them before state legislature for adoption. The ULC has been around since 1892 and “provides states with non-partisan, well-conceived and well-drafted legislation that brings clarity and stability to critical areas of state statutory law.
Why should you care and what does this have to do with Facebook and Google or with your loved one’s estate? Lack of uniformity causes further confusion among all parties.
In today’s world families live in different areas and different states.
The Internet Companies holding your digital assets and information:
The Internet Companies also have their corporate offices in different states and some in different countries.
Certain states have already adopted laws to address the issue of digital assets but these may not be consistent with your state.
If states adopt the laws recommended by the ULC then we have “uniformity” across all states rather than each state having their own set of laws on an issue impacting everyone which is the current situation. Having uniformity is good and can be achieved by states adopting the laws suggested by the ULC.
The Revised Uniform Fiduciary Access to Digital Assets Act of 2015
A Proposed Solution for States
In 2015, the ULC proposed a legal solution to the confusion we discussed earlier. This act is called “The Revised Uniform Fiduciary Access to Digital Assets Act of 2015” (also referred to as UFAD). They are now working with each state (who elects to do so) to pass this law in their state.
This Act has been endorsed by the two big players online: Facebook and Google as well as:
Association of American Retired Persons
Center for Democracy and Technology
This Act is also being introduced in 2016 in the following states:
Florida, Hawaii, Indiana, Maine, Michigan, Nebraska, Oklahoma, Pennsylvania, South Carolina, Tennessee, Washington, Wisconsin
So, what is the status in North Carolina?
Jekyll vs. Hyde: Two Opposing Laws
As we know, legal matters take time and this is the case with North Carolina.
In order to get the history and current status of this law in North Carolina, we spoke to Kim Crouch, the Director of Governmental Affairs for the North Carolina Bar Association, a volunteer organization serving the needs of the legal community (continuing education, legislative lobbying, public service activities, etc.). NOTE: The NC State Bar is different from the Bar Association. The NC State Bar is the regulatory body for the legal profession. To practice law in NC, you must be a member of the NC State Bar.
Stick with me…. a little bit of background is in order
Jekyll vs. Hyde: Two Opposing Laws (UFAD vs. PEAC ACT)
The Uniform Law Commission project to even begin addressing this issue was started around 2011 and went to legislative committee in 2012 with a draft ready by 2013. North Carolina attempted to pass this 2013 version but it was met with a lot of opposition from Internet Companies concerned about the duties of a personal representative and the right to privacy. In addition there were already existing Federal laws on privacy and conflicts existed with those laws – something you can’t have in the law or don’t want to have.
A bill was introduced by legislators on behalf of NetChoice, a trade association representing many Internet companies, including Facebook and Google which exists with the “goal of promoting convenience, choice, and commerce on the net” (Source). This alternative was called the Privacy Expectations Afterlife and Choices Act (known as the PEAC Act) and was adopted in Virginia in late 2013 or early 2014. You can read the full PEAC Act here.
To see a comparison of the PEAC Act vs. The UFAD Act, click here. As you will see there are several aspects of estate administration which are addressed by the UFAD but not by the PEAC Act.
NORTH CAROLINA CHOOSES UFAD
North Carolina chooses ULC’s Revised UFAD of 2015
But North Carolina had concerns about this PEAC Act because of how far it went the other way in the area of privacy. So, now at this point you had two proposed Acts – each one going in the opposite direction – one more friendly to the individuals administering estates and their right to access and the other act granting more rights to the Internet Companies and their desire for privacy.
According to Ms. Crouch, Our North Carolina Bar Association decided not to introduce the PEAC Act and instead asked our state’s General Statutes Commission for further study on the issue. As with many legal matters, this takes time.
While the North Carolina General Statutes Commission was reviewing the matter, the Uniform Law Commission came out with the new “Revised Uniform Fiduciary Access to Digital Assets Act” in 2015.
Our North Carolina Bar Association reviewed this revised 2015 Act by the ULC and felt that D.C. (home of ULC) had proposed an Act that met the needs of all parties and has since been working to redraft it to sync with North Carolina terminology and consistency.
Since the Internet Companies have been participating in the negotiations, the contentiousness has as have the conflicts with Federal Laws. It is anticipated that a North Carolina version of the Uniform Act might be passed in late 2016 or early 2017. The North Carolina Bar Association is now in the midst of its 4th draft. According to Kim Crouch, she doesn’t expect too many more drafts before it can be proposed to the NC General Assembly.
Next Week: What can you do in the meantime or if you are in a different state?