SB 16-FIDUCIARY ACCESS TO DIGITAL ASSETS  1:32:06 PM CHAIR COSTELLO announced the consideration of SB 16 and noted that this was the first hearing. 1:32:15 PM SENATOR SHELLY HUGHES, Alaska State Legislature, sponsor of SB 16, stated her belief that technological advances are key to Alaska's economic future. She noted the advances in online digital tools, storage devices, social media sites, music and photos that individuals use and retain and questioned what would happen to these personal items when someone passes away. SB 16 provides guidance for this internet age that is lacking in current law. It offers digital users the opportunity to specify whether their digital assets should be preserved, distributed to heirs, or destroyed. She explained the need for an overarching law in order to provide access to digital assets to loved ones in other states. She listed the entities that support the bill: National Academy of Elder Law Attorneys, Facebook, Google, Center for Democracy and Technology, AARP, and others. 1:35:01 PM BUDDY WHITT, Staff, Senator Shelley Hughes, Alaska State Legislature, delivered the sectional analysis for SB 16: [Original punctuation provided.] Section 1 of the bill adds a new chapter, the Revised Fiduciary Access to Digital Assets Act, to AS 13. Sec. 13.63.010 sets out user direction for disclosure of digital assets. This proposed section addresses the relationship of online tools, other records documenting the user's intent, and terms of service agreements. The section establishes a three-tier priority system for determining the user's intent with respect to a digital assets. Subsection (a) gives top priority to the user's wishes as expressed using an online tool. Subsection (b) gives next tier priority to user's direction in will, trust, power of attorney, or other record. Subsection (c) recognizes the terms- of-service agreement if the user left no other direction. Sec. 13.63.020 sets out the relationship of the terms- of-service agreement to the fiduciary. This section clarifies that to the extent a custodian gives a fiduciary access to digital assets, the terms- of - service agreement apply as well to the fiduciary. Sec. 13.63.030 sets out procedures for disclosing digital assets. Subsection (a) gives the custodian of digital assets a choice of methods for disclosing digital assets to an authorized fiduciary. Subsection (b) allows the custodian to charge a reasonable administrative charge for the cost of disclosure. Subsection (c) states that a deleted digital asset of the user need not be disclosed, because deletion is a good indicator that the user did not intend access to the fiduciary. Subsection (d) addresses requests that are unduly burdensome and authorizes a process to obtain court direction on the request. Sec. 13.63.040 sets out process for disclosure of the content of electronic communications of a deceased user. This section gives the personal representative of the estate access to digital assets if the user consented or if the court orders disclosure. Certain procedures set out in the section must be met. Sec. 13.63.050 sets out procedures for the disclosure of other digital assets of a deceased user. This section gives the personal representative access to the catalogue of electronic communications and other digital assets, if the requirements of the section are met. Sec. 13.63.060 sets out procedures for disclosure of content of electronic communications of a principal under a power of attorney. The procedures and process are similar to those given a personal representative under Sec. 13.63.040. Sec. 13.63.070 sets out procedures for disclosure of other digital assets of the principal under a power of attorney. The procedures and process are similar to those given to a personal representative under Sec. 13.63.050. Sec. 13.63.080 sets out procedures for disclosure of digital assets when held in a trust when the trustee is the original user. This section provides that trustee who is an original account holder can assess all digital assets held in the trust. Sec. 13.63.090 sets out procedures for disclosure of content of electronic communications held in trust when the trustee is not the original user. The procedures and process are similar to those given a personal representative under Sec. 13.63.040. Sec. 13.63.100 sets out procedures for disclosure of other digital assets held in trust when the trustee is not the original user. The procedures and process are similar to those given to a personal representative under Sec. 13.63.050. The trustee also must supply information about the trust specified in this section. Sec. 13.63.110 sets out procedures for disclosure of digital assets to conservator of a protected person. This section applies when a conservator is appointed by the court to handle the assets of protected person who is physically or mentally unable to manage those assets. The proposed section provides an opportunity for a hearing concerning disclosure. Otherwise the procedures and process are similar to those given a personal representative under Sec. 13.63.050. The proposed section finally sets out a process to suspend or terminate an account of a protected person for good cause. Sec. 13.63.120 sets out standards of a fiduciary's duty and authority under this chapter. Sec. 13.63.130 sets out the standards for the custodian of digital assets compliance with the act. Subsection (f) immunizes the custodian of digital assets and its officers, employees, and agents from liability for an act or omission done in good faith in compliance with this chapter. Secs. 13.63.140 and 13.63.150 are standard provisions included in uniform acts to facilitate their implementation among the states that enact them. Sec. 13.63.050 sets out procedures for the disclosure of other digital assets of a deceased user. This section gives the personal representative access to the catalogue of electronic communications and other digital assets, if the requirements of the section are met. Sec. 13.63.060 sets out procedures for disclosure of content of electronic communications of a principal under a power of attorney. The procedures and process are similar to those given a personal representative under Sec. 13.63.040. Sec. 13.63.070 sets out procedures for disclosure of other digital assets of the principal under a power of attorney. The procedures and process are similar to those given to a personal representative under Sec. 13.63.050. Sec. 13.63.080 sets out procedures for disclosure of digital assets when held in a trust when the trustee is the original user. This section provides that trustee who is an original account holder can assess all digital assets held in the trust. Sec. 13.63.090 sets out procedures for disclosure of content of electronic communications held in trust when the trustee is not the original user. The procedures and process are similar to those given a personal representative under Sec. 13.63.040. Sec. 13.63.100 sets out procedures for disclosure of other digital assets held in trust when the trustee is not the original user. The procedures and process are similar to those given to a personal representative under Sec. 13.63.050. The trustee also must supply information about the trust specified in this section. Sec. 13.63.110 sets out procedures for disclosure of digital assets to conservator of a protected person. This section applies when a conservator is appointed by the court to handle the assets of protected person who is physically or mentally unable to manage those assets. The proposed section provides an opportunity for a hearing concerning disclosure. Otherwise the procedures and process are similar to those given a personal representative under Sec. 13.63.050. The proposed section finally sets out a process to suspend or terminate an account of a protected person for good cause. Sec. 13.63.120 sets out standards of a fiduciary's duty and authority under this chapter. Sec. 13.63.130 sets out the standards for the custodian of digital assets compliance with the act. Subsection (f) immunizes the custodian of digital assets and its officers, employees, and agents from liability for an act or omission done in good faith in compliance with this chapter. Secs. 13.63.140 and 13.63.150 are standard provisions included in uniform acts to facilitate their implementation among the states that enact them. Sec. 13.63.160 establishes the coverage of digital assets under the chapter. In the chapter, a digital assets does not apply to the underlying asset or liability unless the asset or liability is itself an electronic record. The chapter does not apply to the digital asset of an employer used by the employee in the ordinary course of the employer's business. Sec. 13.63.170 sets out the application of the chapter if the user resides in Alaska or resided in Alaska at the time of the user's death. Sec. 13.63.190 sets out definitions of terms used in the chapter.3 Section 2 of the bill sets out applicability of the Act. 1:41:27 PM MR. WHITT said Deborah Behr will answer technical questions about the bill. SENATOR GARDNER asked if a fiduciary would have access to all financial information and whether the bill provides that they would not have access to other property. MR. WHITT clarified that a fiduciary is appointed to manage property when someone dies or loses capacity to manage it him/herself. The bill provides access to anything the fiduciary was authorized to manage. SENATOR GARDNER asked how the fiduciary knows what has value and is relevant. She questioned the executor's role in the process. MR. WHITT deferred the question to Ms. Behr. 1:43:51 PM CHAIR COSTELLO said the definition for "fiduciary" is on page 13. SENATOR STEVENS said he, too, is concerned about the privacy of certain records. CHAIR COSTELLO asked about the effective date and applicability clause. On page 13, line 6, it mentions "a person acting under a will or power of attorney executed before, on, or after the effective date of this Act." She asked if SB 16 will be a retroactive statute. MR. WHITT said he would follow up with an answer. 1:45:25 PM SENATOR MEYER asked how other states handle this. MR. WHITT replied 16 states have passed similar legislation. Most states saw a problem with what would happen with digital assets. 1:46:11 PM DEBORAH BEHR, Member of the Alaska Delegation, Uniform Law Commission, said the issue of how to handle digital assets when someone passes away has been a problem in many states because it's not addressed in the typical will. She provided an account of what happens when a spouse can't get access to digital photos because they do not have a contract with the service provider; the deceased spouse has the contract. The typical will does not work, nor does the business partnership. She clarified that 23 states have passed this model law and 17 others are considering it. The Alaska Uniform Law Delegation approached the sponsor saying this bill will be good for seniors. With regard to applicability, SB 16 becomes effective 90 days after it is signed. It is not retroactive. It applies to existing wills and contracts. She said the question about privacy is important. SB 16 is an opt-in statute. If nothing is in the will, the terms of service agreement will apply and the spouse or family or business partner will not have access to the digital material. It is similar to the designated beneficiary in retirement accounts that is separate from the will. She emphasized that this is a thoroughly vetted process. CHAIR COSTELLO said she is still confused about the applicability. She referenced page 13 and asked for clarification. 1:53:24 PM SENATOR STEVENS stressed the importance of updating wills to include digital assets. MS. BEHR said it is not necessary, if you have no digital assets, but most probate attorneys are asking how the person wants digital assets handled. SENATOR GARDNER related her personal experience as a trustee for her sister. She asked who judges who has access to digital assets. MS. BEHR stressed that the bill provides for an opt-in system. A person can determine whether they want anyone to see their emails after they die. If a person does not give consent, the most a fiduciary can do is get a catalogue of communication. She provided examples of who would be a fiduciary; the husband if the wife died, or someone appointed as a fiduciary. To be a fiduciary requires a court order and includes specific duties. CHAIR COSTELLO asked whether a person is liable for unknowingly accessing a Facebook page of a decedent. MS. BEHR said she believes that is controlled by other federal laws, not this statute. CHAIR COSTELLO asked if this law will change the forms that are available at the office supply stores. MS. BEHR said this bill does not address forms. It's an overlay statute. CHAIR COSTELLO asked if there have been unintended consequences in other states that have passed similar legislation. MS. BEHR said she is not aware of any unintended consequences. 2:01:35 PM SENATOR HUGHES said the third tier in the bill is the terms of service agreement. She asked how she would get photos on Flicker if she isn't designated and her husband passes away. MS. BEHR said she could hope that her husband used the online tool designated in the bill or updated his will, otherwise she would be denied access to those photos. MR. WHITT added that with advances in technology comes the duty to look at this sort of thing and ensure the family has access to records. SENATOR STEVENS asked if the online tool is done generally or whether each provider has its own style. MS. BEHR said each provider has its own style. 2:05:33 PM MR. WHITT added that you can designate who has access to your Facebook page. SENATOR STEVENS said only his staff has been on his Facebook page. MR. WHITT suggested he discuss access with his staff. SENATOR HUGHES asked if there is an educational effort to ensure that seniors, in particular, are aware of these online tools. MR. WHITT said it is becoming a larger issue and AARP is addressing how to educate members. 2:07:32 PM CHAIR COSTELLO opened public testimony for SB 16. SENATOR HUGHES thanked the committee for hearing the bill. CHAIR COSTELLO held SB 16 in committee for future consideration. Public testimony was held open.