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The Impact Of The New York Digital Asset Law

There’s a new digital asset law in New York that will impact (*nearly) every single person in the State.

The full text of the law is available here. And if you’d like your own copy, New York State also provides the full text in a .pdf.


By way of some very brief background, States have been trying to figure out how to remove the barriers that prevent a designated person from accessing your electronic records, data, and accounts. In response to these issues, several States  have enacted some version of the Uniform Fiduciary Access to Digital Assets Act (UFADDA). More recently, States have enacted the REVISED Uniform Fiduciary Access to Digital Assets Act (RUFADDA), which the New York law uses for inspiration rather than imitation. These laws all aim to give a fiduciary (i.e. a designated responsible person) the ability to manage your digital assets in the same manner that they can manage your regular assets.

The Digital Asset Law – NY EPTL Section 13A

Thanks to RUFADDA, the New York Estate, Powers and Trusts Law  (known to lawyers as the NY EPTL, and more particularly EPTL Section 13A) now has rules that cover how New York will treat your digital assets.

The text of the law has a list of definitions that literally goes from “A” to “Z”, and it’s a good idea to read through them, and the statute itself, to see how they all fit together. However, I’m going to summarize here to try to help you understand how I believe the law is going to work. I’m not aware of any case-law challenging any of these new rules, but that’s what time is for.

The 3 tiers of Section 13A

The EPTL has 3 tiers to determine what happens to your digital assets.

Tier 1

If your service provider has a method that allows you to give direction to the service provider regarding disclosure of your stuff to another person (an “online tool”), that method, if you chose it, would override any contrary direction that you might have otherwise provided via specific language in your Will, a Trust, Power of Attorney, or “some other  record”. If you pick the service provider’s tool to cover disclosure of your stuff to someone else, it doesn’t matter what you direction you gave in another document. Caveat emptor. And be careful what wish for.

Tier 2

If you choose not to select the third-party access rules of your provider, or if the provider doesn’t have an any rules for third-party access, you may allow or prohibit access to your some, all, or none of your stuff via your Will, Trust, Power of Attorney, or some “other record”.  What your document says overrides a contrary provision in a Terms of Service Agreement.  However, you must leave very specific directions in the proper documents.

Tier 3

Tier 3 comes into play if there’s no tool, or if there is one and you haven’t elected to use it, and you haven’t given specific direction in your legal documents. In this situation, the Terms of Service will determine who can access your data and under what circumstances. What if your Terms of Service are silent? Then you need to look to the text of the EPTL for guidance.

What it means for you

So what does this mean for you?

  1.  It’s critical for you to know the rules that control your Terms of Service. Without that knowledge, you will likely lose control of your data.  Or you’ll make it nearly impossible for someone else to control your information in the future;
  2. Does your provider have a method that allows third-party access to your stuff that you are comfortable with? If so, opt in. Otherwise, opt out and use your legal documents to control access to your digital data;
  3. If your online service doesn’t have any third-party rules, then get in the driver’s seat. Use the proper legal documents to provide specific instructions to manage your digital assets;
  4. You may want to consider a redundant backup of your digital data on a device that you control;
  5. No plan + no clue what’s in your Terms of Service + no legal documents that cover your digital assets = Russian roulette with your digital assets and your digital legacy. Better to have a plan;

If you are a New Yorker that’s *somehow off the grid*, then none of this applies to you.  But for everyone else, it’s critical for you to know the rules and to have a plan.

Photo courtesy of Pixabay.
2016-12-27T15:45:45+00:00 December 26th, 2016|Digital Assets, Estate Planning|