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New Colorado Fiduciary Act Brings Both Progress and Uncertainty

You may have previously read about digital assets, the impact they have on the administration of trusts and estates, the need for fiduciaries to access digital assets, and the privacy concerns that come along with such access. In order to address these issues, Colorado recently enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). This new act became effective on August 10, 2016 and can be found at C.R.S. § 15-1-1501 et seq.

RUFADAA is a significant leap by the State of Colorado to catch up to the digital age.  Prior to the passage of the law, the pervasive use of electronic banking and investing has posed a problem for many fiduciaries. Without the receipt of paper statements, personal representatives, financial agents, trustees and conservators have had a difficult time locating an individual’s assets, sometimes leading to an exhaustive search of several banking and financial institutions before asserts are uncovered.

Even when a fiduciary was aware of an individual’s accounts and login credentials, the fiduciary’s access was limited by the provider’s terms of service agreement. This was particularly frustrating for loved ones who were searching for answers or wished to access their deceased relative’s final words on social media accounts. With the passage of RUFADAA, an individual can grant or prohibit a fiduciary, such as a financial agent, trustee, personal representative, or conservator the ability to access his or her digital assets.

RUFADAA defines the term “digital asset” as “an electronic record in which an individual has a right or interest.”  The act states that a user may “in a will, trust, power of attorney, or other record, allow or prohibit disclosure to a fiduciary of some or all of the user’s digital assets, including the content of electronic communications sent or received by the user.”  The act also provides that the user can grant full or partial access to the account, and that a custodian of the account may charge a reasonable fee for disclosing the digital asset.

Highlights of Colorado’s version of RUFADAA are as follows:

  • Fiduciaries can access and manage certain digital property such as computer files stored in the cloud, web domains, and virtual currency.

  • Fiduciaries cannot access certain digital communications such as email, text messages, and social media accounts, unless the original account holder expressly consented to the disclosure (e.g., in a will, trust, power of attorney, or other record).

  • Account holders can also create legally enforceable instructions for the disposition of their digital assets after death by using online tools provided by online service providers and either naming a person to be granted access or directing the service to delete the digital assets at that time.

  • If the original account holder has not given express directions regarding disclosure to a fiduciary after death, the service provider’s terms of use will control whether a fiduciary can access the account.  Or, if the terms of use are silent, the default provisions of RUFADAA will control.

  • Companies will have the right to assess a “reasonable administrative charge” to comply with requests for access to digital assets and to reject requests that are unduly burdensome.

Though RUFADAA breaks down barriers to allow fiduciaries the ability to access digital assets, its implications have yet to be challenged. There are various federal laws regarding privacy and digital communications that potentially may conflict with RUFADAA, and the courts may have to sort out these conflicts.  Although the full effect of the new law is yet to be tested, it is clear that this is a step in the right direction for Colorado in addressing an issue that is bound to be more complicated in the future.

Copyright Holland & Hart LLP 1995-2020.National Law Review, Volume VII, Number 17


About this Author

Matthew S. Skotak, Holland Hart, Estate Planning attorney, probate litigation lawyer

As a member of the Fiduciary Solutions Group, Mr. Skotak effectively assists clients with probate litigation, including disputes involving trusts, estates, guardianships and conservatorships. Mr. Skotak also assists clients with estate planning and administration.

Mr. Skotak has expertise and experience with disputes involving protective proceedings for the elderly, disabled and minor children, appointment and removal of fiduciaries, will and trust interpretation and/or validity, and disputes in which fraud, undue influence, and lack of capacity...