Probate

unlocking digital assets after death

Executors Fight to Get Access to E-mails

John Ajemain, Forty-Six  died in a bicycle accident.  He had no Will or Trust.  His brother and sister became the Personal Representatives (PRs) of his estate.  They sought access to John’s “digital assets” in particular Yahoo e-mail account to review for other assets such as bank accounts and liabilities.  Yahoo denied access and a court battle ensued.

How Yahoo Justified Refusal

Yahoo refused  relied upon the two points.  First they claimed that the Stored Communications Act “SCA”(18 USC Sec. 2701) prevented such disclosure.  Yahoo also claimed that the terms of service agreement governing use of the Yahoo account allowed them to withhold or even destroy the information.

Stored Communication Act

The Court examined the SCA and found that the act was established to prevent “overzealous” law enforcement from gaining access to private accounts.  However, the SCA provides an exception to the nondisclosure to “with the lawful consent of the originator”.  Yahoo’s position was that the PRs “cannot lawfully consent on behalf of the decedent, regardless of the estate’s property interest in the e-mail messages”.  In Yahoo’s view, only a living person had the authority to grant the consent.

Luckily, the court did not agree with Yahoo on this point.  After an exhaustive examination of statutory construction, the Court held that the SCA could not be used to prevent disclosure to the PRs.  It found that the PRs had the authority to provide “lawful consent” and that access to the records was necessary because Yahoo’s refusal “would significantly curtail the ability of the personal representatives to perform their duties”.  The court stated that nothing in the SCA “would suggest that lawful consent precludes consent by a personal representative on a decedent’s behalf.”

 

Terms of Service Agreement, Yahoo’s Delete Button

Even though the Court threw out the SCA defense, it still wasn’t sure what to do the “Terms of Service Agreement”.  According to Yahoo, that the Agreement trumps the PR’s property interest in the records.  The Agreement says:

You agree that Yahoo, in its sole discretion, may terminate your password, account…and remove and discard any Content…for any reason”.  The Court was not certain that this provision was enforceable or whether the essentials for a valid contract existed.  In short, there wasn’t sufficient evidence to show that there was a “meeting of the minds” with regard to Yahoo’s Agreement.  The Supreme Court sent the matter back to the Trial Court to take evidence on the matter.

What this Means to You

Unfortunately, the Court did provide a definitive answer to the question of whether the records will ultimately be handed over to the PRs.  This will play itself out in the courts below.  But there are things that you may consider.  What is frightening is how hard Yahoo is fighting to keep John’s records from his PR.  Yahoo is not alone in their position.  This area of the law is evolving.  While there are no definite answers the following are a few good ideas:

Digital Power of Attorney:  Your power of attorney should provide your agent with the authority to access your accounts.  This is increasingly necessary as many banks, financial products and other transactions occur digitally.  Failure to have access may be disruptive in the event of a disability.

Digital Powers in Will:  It is a good idea to include digital authorities in your Will which grants your Personal Representative the authority to access accounts.

Password Access:  The powers stated above are useless if one does not have access to the passwords.  Use a service like LastPass and DocuBank to keep track of your passwords.

Paper Copies:  The Yahoo case shows why it is important to maintain some paper copies of your important records.  Perhaps it is a good idea print out some statements and keep them with your other papers.

Want to read the Case?  Click Here

 

 

 

 

“What is the difference between a Will and a Trust?”  In many ways these Estate Planning Documents are very similar in what they accomplish the major difference is how the goals are accomplished.

Both Distribute an Inheritance At Death

Both a Will and a Trust distribute property upon the death of its maker.  The major difference is how we get to the point where the property is distributed.

Five Major Differences Between a Will and a Trust

  1. A Will requires a probate court and judicial oversight to work.  A Trust requires no oversight by a court or judge.
  2. A Will distributes property without restrictions which allows somebody as young as 18 with full access to an inheritance.  A Trust can control the timing of distributions.
  3. A Will does not protect an inheritance from claims of your kid’s creditors.  A Trust can be structured to protect an inheritance from a kid’s creditors and predators.
  4. A Will does nothing until the maker dies.  A Trust is a living document which allows the person in charge the ability to manage the assets and make distributions to beneficiaries.
  5. A Will becomes public record that anybody can snoop to see how much is in an estate and who ended up with your assets.  A Trust is a private document and few of its details require public disclosure.

Todd’s Story

Todd’s father passed away.  He was named Trustee of this father estate.  While he was cleaning out the house a passerby inquired whether the home would be for sale.  He was able to accept an offer and close that very same month.  If the property was left in a Will nothing could happen until there was approval of a probate court.  Instead of one month he would have had a delay of up to 6 months and incurred attorney, publication, appraiser and filing fees.  Todd was glad to avoid those troubles.

How a Will Works

A person makes a will by drafting and signing a written document.  It must clearly be a statement of the person’s “Testamentary Intent”.  In other words, it must state to whom property is to be given after their death.  There are also strict rules on how the document is drafted and witnessed.  If any of these are messed up then it is not a valid will.

A Will is a Lazy Document

After a Will is created it lays around and waits for its maker to die.  None of its provisions becomes effective until the person dies.  For instance, if the plan is to give land to a son, he does not own it yet.   There is a a further requirement that a Probate Court determines that the Will is valid.

Once a Will is approved by the Court then it must be administered according to Probate Procedure.  This includes:

  • Filing a copy of the Will with the Court (making available for the public to see online)
  • Notifying all heirs (relatives who could inherit)
  • Notify all legatees (persons given something in the will)
  • Publish notices in the Newspaper
  • Appointing an Executor (the person in charge of collecting assets, paying claims and distributing assets)
  • Posting a Bond (a fund used if the Executor misbehaves
  • Sending notices and receiving claims from creditors
  • Report all of the assets (publicly available)
  • Provide and accounting
  • File a report of distribution (the public what everybody receives under the will)
  • Pay fees for attorneys, court clerks, mailing, publication and bonds
  • Keep in mind that this is just a snapshot of what is involved in a simple case.

A probate procedure can take nine months to several years to complete.

How does a Trust Work?

In the simplest terms, a Trust is a vehicle that holds assets in the name of the Trustee.  Imagine a child’s Radio Flyer wagon.  When things are placed in it the wagon “owns” them.  The kid pulling the wagon gets to decide what gets put into it.  He also writes a Rule Book that describes when and how things are taken out of it.  He pulls the handle so he is in control.  Someday he will not be able to pull the handle because he dies or loses the ability to manage it.  The Rule Book states who picks up the handle and what is to happen with the things in the wagon.  Unlike the Will, the Trust works without the need for a Probate Court of Judicial Oversight.  In Todd’s story, he picked up the handle and managed the property quickly and efficiently.

 

What Happens When Somebody Doesn’t Like A Will?

If a Last Will and Testament once existed but cannot be found, the law presumes that it was destroyed by its maker.  If there is no Will, property is distributed according to intestacy statutes.  Somebody who is written out of a Will may have an incentive to destroy it if they would get more under the intestacy statute.

Isabel’s Story

Isabel was a retired librarian and an author of children’s books.[i]  She never married or started a family.  She had some nieces and a nephew, but she wanted to leave everything to her church.  Her attorney prepared the paperwork.  The attorney kept a copy of the Will and sent the original home with Isabel.    Isabel stored it in an unlocked cabinet.

Meddlesome Niece Disinherited

Isabel had one niece who interfered with her affairs.   At one point the niece stayed at Isabel’s home while she was away and removed  Isabel’s private financial records without her permission. This upset Isabel who had her attorney demand return of the records. The niece also suggested that Isabel move into a nursing home.  Eventually, Isabel refused to speak to her.

Disinherited Niece, Did She Destroy the Will?

After Isabel died the original Will was nowhere to be found.  This would be great for the niece because if the Will disappeared , there would be a presumption that Isabel destroyed it and the niece would inherit under the intestacy statutes.  Isabel’s caretaker implied that the niece had a hand in the Will’s disappearance.  When the attorney produced a copy of the Will, the niece fought it.    The fight went up to the Pennsylvania Supreme Court.

The Court did not have direct evidence that the niece destroyed the Will.  But the Court’s opinion  stated,

“With that said, we do acknowledge that the potential for fraud is an appropriate concern in developing legal rules applicable to lost wills. “

Attorney’s Copy of Will Accepted

The evidence showed that the Attorney kept a copy of the Will.  He had been in regular contact with Isabel through the years and assisted her with changes to it.  He also visited here within a few weeks of her death.  Surely Isabel would have informed her attorney if she wanted to change or destroy her Will. These unique facts overcame the presumption that a lost Will was destroyed and the attorney’s copy was accepted.  The niece got nothing.

 

Maintenance  Agreements:

Isabel’s attorney kept in contact with her throughout her lifetime.  He made changes to her Will as her needs and wants changed.  He intervened when the niece took Isabel’s documents.  The attorney and his client had an understanding that kept communications open.  Maintenance Agreements are designed to keep communications open and expenses to a minimum, they can include:

  • Regular Estate Plan reviews

  • Access to attorneys for routine questions without bills

  • Assistance and advice when assets or family situations changeSafe bank and key to the safe

  • Notary services

  • Enrollment in Living Will registries such as Docubank

  • Newsletters Covering Legal Topics

  • Trust protector or oversight

  • A seamless transition to estate administration

  • Assistance in the event of incapacity or incompetency

  • Storage of Wills, Trusts & Powers of Attorney to prevent fraud and abuse

  • Provide word processing changes

Modern maintenance agreements are a way to keep estate plans current.   The client receives representation on a regular schedule at a fixed cost. Issues are dealt with as they arise.  This ultimately saves the client money.

Where Should I Store the Will?

This is a question that is often asked.  Many clients wish to lock the Will in a safety deposit box at the bank.  Others keep their Estate Plans at their home.  Isabel’s case demonstrates the difficulty a Court faces when the original is lost and a copy of a Will is produced.  Some courts provide a way to have a Will filed for use in the future.

Should My Attorney Keep My Will?

Many attorneys offer to store Wills, Trusts, Powers of Attorney and other Estate Planning Documents as part of a maintenance program.  The safekeeping reduces the risk of mischief by unhappy family members.   Documents are kept in a fireproof safe or in a bank’s vault.  The problem with keeping the Will or Trust in the client’s safety deposit box is the risk of the document becoming inaccessible without an order from a probate court.   Also, the person retrieving it may “lose” it if the provisions are unfavorable.

The full case can be seen in here:  In re Estate of Wilner

See also Writing the Kids Out of the Will

 

[i] Her works include “B is for Bethlehem”, “A Garden Alphabet” and “The Baby’s Game Book”.

 

 

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