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Grounds for a Will Contest

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A will contest can be a difficult and costly legal process so the will contestant needs strong grounds before taking this step. Various issues can be used to attack a proposed will. This is a look at some of the most prominent ones and the types of evidence that are needed for proof.

Burden of Proof in a Will Contest

The contestant attempts to weaken the position of the proponent of the will by offering clear and convincing evidence to undermine important facts that would support the probate of the will. This was defined in La Rocca Trust, 411 Pa. 633, 192 A.2d 409 (1963), as testimony by witnesses about the precise facts at issue that is credible, distinctly remembered, clear, direct, and weighty.

This goes beyond the usual “preponderance of the evidence” standard for the usual civil lawsuit. Such heightened scrutiny makes a will contest hard to win without careful, detailed preparation. What must be proven to this extent depends on the grounds on which the will contest is based.

When a Will Contest Might Succeed

Dating back to the 19th century, there are numerous Pennsylvania cases, statutes, and rules that have defined what must be proven to successfully attack a will. The strength of the evidence and the elements of the law must come together to provide a compelling story against probating the proponent’s will. A look at some of the more likely arguments follows.

Testator’s Capacity and Will Execution

The major issue is what constitutes mental capacity in order for a will to be seen as valid. The Pennsylvania Supreme Court consistently has defined the test for testamentary capacity as “whether the testator, at the time he executed the will in question, had an intelligent knowledge regarding the natural objects of his bounty, of what his estate consists, and of what he desires done with his estate, even though his memory has been impaired by age or disease” (from Cohen Will, 445 Pa. 549, 284 A.2d 754 (1971)).

Basically, the person needs to understand her or his ownership of property and how it should be distributed after death, even if age has decreased the sharpness of an individual’s overall memory over the course of time. As for the natural objects of one’s bounty, this often is expressed as the closest living relatives – however, knowing their identities does not mean that the testator will leave any property to them.

A will contest also focuses on capacity at a particular point in time. As stressed in Wertheimer’s Estate, a 1926 decision that remains precedential, the evidence must cover “the period immediately before, at or after [the will’s] execution.” When an alcoholic executed her will at a time when no evidence of her being intoxicated existed, the court found her will to be valid. Furthermore, in Ryman’s Case, 139 Pa. Superior Ct. 212, 218, Judge Keller emphasized that “[o]ne’s mental capacity is best determined by his spoken words, his acts and conduct.” Unless the evidence undermines the presumption of mental capacity at the time in question, events that are not contemporaneous with the will’s execution will not undermine the document’s validity.

In our society with an increasingly elderly population, we have to remember that the law does not look at such matters as physical age when determining testamentary capacity. For example, in Lawrence’s Estate, 286 Pa. 58, 65, 132 A. 786, 789 (1926), Pennsylvania’s Supreme Court stated that “[o]ld age, sickness, distress or debility of body neither prove nor raise a presumption of incapacity.” Additionally, failure of memory does not prove incapacity as long as it is not total or extended to the degree that incapacity becomes practically certain.

A Poor Memory Does Not Necessarily Equal Incapacity

A testator’s memory is not irrelevant in a will contest but its role can be overemphasized depending on the facts and circumstances involved. The Pennsylvania Supreme Court decided in Brantlinger Will from 1965 that a testator with a faulty memory still has capacity to execute a will. Other cases have stated that a complete lack of memory renders a testator incapable of executing a will. This is a matter of degree and is a reason that a will contest sometimes is necessary.

Incapacity Is Not Always Incapacity

One might think that the proponent of a will of a legally incapacitated testator is guaranteed to lose a will contest. 1964’s Lanning Will summarizes the applicable law: an adjudication of mental incapacity made prior to the execution of a will does not require the conclusion that the will is invalid for lack of testamentary capacity. Instead, one must look for the date that the will was executed. If the testator has not been adjudicated as mentally incapacitated, then the contestant bears the burden of proving this by clear and convincing evidence. On the other hand, if incapacity was determined prior to the will’s execution, the will could be valid if the testator can be proven – by clear and convincing evidence – to have had testamentary capacity of the date of execution. The will’s proponent shoulders the burden of proof here.

Eccentricity Is Not Insanity or Even Incapacity

In Higbee Will, 365 Pa. 381, 75 A.2d 599 (1950), those who brought the will contest proved that the testator was forgetful and, at times, confused and subject to rages and tantrums; that she had plenty of money but lived in poverty and filth; she was; she locked herself in her house while alone; that she refused medical attention even when she needed it; and that she was very ungrateful to people who did her favors.

Meanwhile, in her will, she left her property to an agnostic society instead of relatives. While this upset those relatives, two attorneys and a secretary of a trust company testified that she had clear and full testamentary capacity when she executed a will and two codicils. As a result, the testamentary documents survived the will contest.

This case also demonstrates that what appears to be an “unnatural” disposition does not prove an incapacitated testator. This principle is found in Morgan’s Estate, 219 Pa. 355, 68 A. 953 (1908), which states that a will is unnatural only if contrary to what a testator’s known views and intentions would be expected to produce.

Are Insane Delusions Relevant in a Will Contest?

Maybe, yes; maybe, no. Two cases from the 1950s show how the facts must be developed in order to answer this question. Duross Will, 395 Pa. 492, 150 A.2d 710 (1959) involved a testator who had insane delusions but still could have capacity to make a valid will, as long as any delusion did not affect the will’s dispositive scheme. Meanwhile, 1952’s Johnson Will, also decided by the Pennsylvania Supreme Court, stated that, when it appears that the will was the direct result of the delusion and that the will would have been different if the delusion had not occurred, then the will is rendered invalid.

Undue Influence in a Will Contest

Undue influence is a broad term that includes fraud; threats; misrepresentation; and coercion. This was summarized in Hollinger Will from 1945. It noted that, if sufficiently proven, any of these can undermine a will’s validity by prejudicing the testator’s mind, destroying freedom to act as desired, or acting as a present restraint upon the testator making the will.

Direct versus Indirect Proof

Undue influence can be proven directly or indirectly. With direct proof, the will contestant needs to show, by clear and convincing evidence, that acts which prejudiced the testator’s mind or destroyed the testator’s free agency occurred, resulting in the invalidity of the will produced for probate. In these cases, the presumption is in favor of the absence of undue influence.

However, in other cases, there is a presumption that undue influence existed. This “indirect” proof of undue influence arises in situations in which the law shifts the burden of proof to the will’s proponent, who must show the absence of undue influence for the will to be considered valid.

When is Undue Influence Presumed in a Will Contest?

The Pennsylvania Supreme Court followed a three-part rule regarding indirect proof of undue influence, leaving the will’s proponent with the burden of proving that undue influence did not exist. In Estate of Clark, 461 Pa. 52, 334 A.2d 628 (1975), the Court held that where (1) a person who is in a confidential relationship with the testator, (2) receives a substantial benefit under the will, and (3) at or around the time the will was executed the testator had a weakened mental intellect, a presumption of undue influence arises. The result is that the burden of proof shifts to the proponent to prove the absence of undue influence.

Confidential Relationships

In a will contest, a confidential relationship is considered a potential indication that parties are not on equal footing. In Leedom v. Palmer from 1922, Pennsylvania’s Supreme Court discussed such relationships and looked for “an overmastering influence” on one side or “weakness, dependence or trust” as indicators of a possible unfair advantage that leads to the presumption that a void transaction. Importantly, confidential relationships are not sufficient to create the presumption. In the 1975 decision in Estate of Thomas, which involved the probate of a will in Allegheny County, there was a recognition that a testator in a weakened state dealing with someone in a confidential relationship would result in a presumed unfair advantage. When these circumstances appear, the law presumes undue influence when the bulk of the estate is left to the will’s scrivener. Proving influence is not required to shift the burden of proof.

Various relationships can indicate the existence of confidential relationships. Kinship and marriage can serve this function; however, Aggas v. Munnell, 302 Pa. 78, 152 A. 840 (1930), specify that these relationships do not automatically equal confidentiality. A financial agent in a power of attorney has been given unequal power – if the agent is a will’s proponent, court believe that this clearly indicates there is a confidential relationship.

 Meanwhile, a substantial benefit to will proponent is relevant. The previously mentioned Estate of Clark noted that a substantial benefit to a will’s proponent would establish a prima facie case in favor of the contestant. Cases have noted that no hard and fast rules exist to define a substantial benefit; instead, this is determined by facts and circumstances on a case-by-case basis. In this way, a will contest does not differ from other court actions – the situation must be investigated, with an understanding of what transpired being carefully explored before a rush to court.

Examples of Circumstances that Are Not Automatically Defined as Undue Influence

When a will’s contestant suggests that the will’s proponent being named as executor is a substantial benefit, the contestant likely will lose. Unless the will provides the power to dispose of an estate in a manner contrary to the will’s specific provisions, the proponent (and executor) reaps no substantial benefit. Attempts to persuade a testator do not pass the test. Any form of restraint of a testator must be contemporaneous with the creation of the will and, additionally, must directly affect the testamentary act. If a testator made statements that might have indicated undue influence, courts have found these to be admissible only when linked with more direct evidence for the purpose of corroboration.

For a will contest to succeed, contestants must understand what must be proven and how it can be proven in order to prevail. Unless they understand and can do this, they will fail in their objective and stand to learn an expensive lesson at the same time.

Undue Influence and Proving Fraud in a Will Contest

As previously noted, undue influence is broadly defined in the context of a will contest. As a result, it generally includes fraud as an element. However, fraud often plays an important role in a will contest so it merits being singled out.

A contestant who raises this issue must prove it directly. Pennsylvania’s Rosenthal’s Estate from 1940 established that the burden of proof does not shift so the contestant must produce clear and convincing evidence in order to prevail.

In re Paul’s Estate, 407 Pa. 30, 180 A.2d 254 (1962), dealt with fraud in the inducement regarding execution of a will. The case set forth two elements that the will contestant must prove. First, the testator had no knowledge of the concealed or misstated fact. Second, the testator would not have made the bequest had the truth been known.

A classic situation in which the Pennsylvania Supreme Court looked the possibility of fraud through nondisclosure occurred in Stirk’s Estate from 1911. This involved a testator who authorized the assistant trust officer of the Land Title & Trust Company to draft her will prior to an operation.

The will’s basic objective was to benefit charitable, educational and religious uses. However, there could be a question of the legality of these bequests if the testator died within 30 days after executing the will. As a result, the scrivener prepared a codicil to deal with the possibility that the bequests might fail and left blank spaces for who would receive the funds if she died during the 30-day period. The testator mentioned that the Land Title & Trust Company as the recipient of what were charitable bequests in the will, and the assistant trust officer from that company inserted this into the codicil for the testator.

She then executed the codicil but died within the 30 days after executing the will. The Court questioned why the codicil substituted a for-profit entity to receive the bequests that intended for charitable uses and also noted that the scrivener’s close connection to the land trust company. Additionally, the fact that the trust officer did not attempt to make sure that this drastic change was what the testator actually intended seen as very problematic. The Orphan’s Court judge called this situation “incomprehensible and almost incredible.” The high court agreed. It decided that the scrivener’s silence under this case’s facts amounted to constructive fraud and reversed the decree that awarded the fund to the Land Title & Trust Company is reversed and remitted the record for a distribution of bequest in accordance with its views as set forth in its opinion.

An Overview of Other Grounds for a Potential Will Contest

While lack of testamentary capacity and various forms of undue influence are grounds commonly raised by contestants, there are a number of additional issues that might be introduced in these cases in order to undermine a will’s validity. Among these are lack of testamentary intent; mistakes in execution; issues concerning lost wills; and forgery. These are summarized, below.

Did Testamentary Intent Exist?

The form and language of a writing are factors to be considered but are not determinative of whether a writing is a will. Instead, an informal instrument may be legally effective as a will if its language shows testamentary intent, which is indispensable to the finding that a document is a valid will. The language must be dispositive in character, and this disposition must be intended to occur after the testator’s death. Instructions and memoranda for use in drafting a will at a future time do not show the requisite intent.

Although form is not a determinative factor, it is an element which may be considered. For example, in In Re Estate of Ritchie in 1978, the Pennsylvania Supreme Court noted that the decedent previously executed a will which was not a sophisticated document but did show some knowledge of the customary form and style used for a will. When a later writing was submitted for probate, the Court gave weight to the writing lacking any elements of the customary form that the testator used previously.

The Court in Ritchie also set forth a long-standing principle that, if a further or additional act or writing is contemplated by an alleged testator in order to make a will or codicil, then the current writing is not testamentary in nature. The prior will as well as extrinsic evidence were considered in making this decision.

While extrinsic evidence is not permitted when the intent is unambiguous, the trial court believed that real ambiguity regarding testamentary intent existed so it heard testimony of individuals who were present when the second document was drafted. While it permitted the document to be probated, the Pennsylvania Supreme Court reviewed the testimony introduced by the will’s proponents indicated that the document was a list or memorandum contemplating a will that would be drafted in the future. It concluded that testamentary intent was not present and reversed the trial court’s decision.

Two years earlier, in In Re Estate of Sedmak, 467 Pa. 379, 357 A.2d 142 (1976), the Court stated that, if the instrument is in writing and signed by the decedent at the end, it must be given effect as a will or codicil when it contains a legal declaration of the writer’s intention regarding actions to be performed after the individual’s death. If there is no ambiguity of this intent, then extrinsic evidence is not admissible.

Mistakes in Execution

A classic example of this and how Pennsylvania courts approach the problem occurred in 1959’s Pavlinko Will. In 1949, Vasil and Hellen Pavlinko had their wills drafted by an attorney. The basic estate plan left the property of the first spouse to die to the other spouse. Hellen made the mistake of signing the will prepared for Vasil, who then signed the second will which was supposed to be executed by his wife. Hellen died in 1951, but no will was submitted for probate.

After Vasil Pavlinko’s death in 1957, the will that he signed was offered for probate at the Register of Wills in Allegheny County by the residuary legatee (Hellen’s brother who was identified in the will as “my brother”) named in the will executed by Vasil. Because the document stated that it was Hellen’s will while it was executed by her husband, the Register of Wills refused to accept this to be probated.

Eventually, the case went to the Pennsylvania Supreme Court. It cited Section 2 of the Wills Act of 1947, which stated that every will shall be in writing and shall be signed by the testator at the end thereof. This provision now is found at Section 2502 of the Probate, Estates and Fiduciaries (PEF) Code. The document that was to be submitted as Vasil’s will intended and purported to give Hellen’s estate to Vasil; as a result, it could not be his will but, instead, was a nullity.

The Court noted that the will would need to be rewritten in order to be probated as Vasil’s will, and it was not willing to take this action. The decision emphasized “[h]ow firmly and without exception the courts have carried out the provisions of the Wills Act, when the language thereof is clear and unmistakable” and cited other cases in which the execution of a will did not meet the essential requirements of the statute. The Court did acknowledge the seeming harshness of the result but stated that strictly following the Act was necessary in order to prevent “countless fraudulent claims” from succeeding. When someone submits a will in which mistakes in execution were made, a will contest – if the will would be accepted for probate – has a very good chance of success.

A Will Contest and a “Lost Will”

A “lost” will can be the basis for a will contest. Before doing so, an individual must understand what must be proven in order to proceed. The Pennsylvania Supreme Court’s decision in 1961’s In Re Murray’s Estate involving an unsigned copy of the will of Beatrice J. Murray provided the test for establishing the lost will’s legitimacy as the testamentary document to be probated. The necessary proof includes (1) the testator duly and properly executed the original will; (2) the contents of the executed will were substantially the same as those included in the copy of the will presented for probate; and (3) the testator did not destroy or revoke the will prior to death.

Burns v. Kabboul is a decision from Superior Court that has precedential value when a will contest centers on the status of a lost will. While the case has an interesting fact pattern, it also discusses a number of fundamental legal principles dealing with probate. It begins by noting that estate law in Pennsylvania favors testamentary dispositions of assets over intestate distribution. The policy in Pennsylvania stresses that a will should be interpreted in a way that avoids intestacy if this is feasible. To further this policy, if a later will is contested and determined to be the result of undue influence, a revoked prior will effectively is reinstated.

Burns v. Kabboul reviewed a will contest in which a lost will proved pivotal. Mae Kabboul was named the decedent’s agent in a power of attorney when he executed his final will in 1985. Kabboul was the scrivener and also was named the estate’s executor (who would receive the bulk of the residuary estate). The will was found to be a product of her undue influence and was determined to be invalid. At that point, the law of intestacy apparently would be applied to the estate, and Kabboul would inherit nothing from the decedent.

Then, Ms. Kabboul produced an unsigned copy of a will from 1982. As Pennsylvania strongly favors testamentary dispositions, there are exceptions that permit copies of lost wills to be probated. The test that shows what must be proven to overcome the presumption that a testator destroyed or revoked the lost will is set forth, above.

Kabboul was able to navigate two prongs of the 3-step test with relative ease. There was testimony from witnesses that showed proper execution of the will from 1982. The third prong regarding lack of revocation has met when the 1985 will (which was found to be the product of Ms. Kabboul’s undue influence) was invalidated. The second prong involving proof that the 1982 will’s actual contents were substantially the same as the document purported to be a copy of that will.

The problem with the copy was that the fourth page was missing. The result was that the size of the residuary estate to be received by Ms. Kabboul, again, was uncertain without knowing the provisions on page four. This was why the trial court would not accept this lost will for probate. However, the appellate court chose to attempt to follow the policy that favors testamentary dispositions and ruled that the lower court erred in not examining the document to see if any portion could be salvaged in order to prevent a total intestacy in this case.

To do this, the appellate court looked for the portions of the 1982 will that were not dependent on what may have been stated in the missing page. If possible, it would give effect to those portions so that total intestacy could be avoided. This review revealed that the bequests on the first three pages as well as clause twenty-nine on page five were for determinate sums and merited treatment as valid testamentary dispositions. Meanwhile, the missing clauses only impacted two clauses which concerned the distribution of the residuary estate; since testamentary intent regarding the residuary estate could not be determined, those two clauses were declared void. The court decided that what was apparent from the will’s terms would be subject to probate while the remainder of the estate was distributed according to the intestacy laws of Pennsylvania.

Most will contests that involve lost wills are not as convoluted as Burns v. Kabboul, but the case does demonstrate the problems that can result when old wills are not revoked and destroyed. In this case, a partial copy was at issue. Ms. Kabboul was fortunate that she was able to produce it after a later will was invalidated based on her use of undue influence. If someone else had possession, the PEF Code states what to do. In Section 3137, a party in interest can compel a person having possession or control of a testator’s will to show cause why it should not be deposited with the Register of Wills.

Forgery

While forgery is related to fraud, it is more narrowly defined so it will be discussed briefly here. In 1961’s Kadilak Will, the Pennsylvania Supreme Court stated that the will contestant must directly prove forgery with evidence that is “clear, direct, precise and convincing.” What might be considered as forgery in a will contest?

While an unauthorized signature by someone other than the testator in violation of PEF Code Section 2502 probably would be the typical answer, there are other situations in which courts have invalidated wills and codicils on the basis of document forgery. The latter variation also may be referred to as fraudulent substitution.

The previously mentioned Kadilak Will dealt with allegations of forged signatures. However, there are numerous cases in which contestants have charged others with removing pages of testamentary documents and then replacing them with more favorable pages. For example, Kane’s Estate from 1933 concerned a document bearing the decedent’s signature in which it was alleged that one page had been substituted for the original page and that another page was subjected to alteration. As this occurred nearly 100 years ago, the courts that had to decide on the will’s validity had to scrutinize what was produced by a portable typewriting machine. In the end, the Pennsylvania Supreme Court’s examination of the machine’s output was the same as that of the trial court. The document submitted for probate was riddled with evidence of forgery.

Wide latitude is permitted regarding what can be offered to prove forgery. Over the course of time, the following are among the factors used as proof: comparisons to examples of  the decedent’s handwriting which are positively identified as such and were made as close in time as possible to the date of the disputed document; differences in typing; the presence of extra staple marks; differences in paper used within the document as well as differences in ink; the validity of signatures of witnesses; and the amount of time that elapsed prior to presenting documents for probate as well as explanations for the delays if concerns were raised.

 

A will contest is a difficult and expensive undertaking. However, if there are reasonable grounds for disputing the validity of a document offered for probate, one can succeed in such an action. The grounds alleged and the evidence in support have to be weighed carefully before proceeding to court because the party with the burden of proof must meet this burden by producing clear and convincing evidence to support each element of the cause of action.

Digital Assets in Estate Planning & Administration

Alberts Law, Estate Planning, Probate & Estate Administration, , , ,

Digital assets are a relatively recent part of everyday life but become important piece in estate planning and administration. Their role is bound to become a larger issue in Pennsylvania in 2021 with the passage of the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) during July of this year. The new law will be found in Chapter 39 of Title 20 of the Pennsylvania Consolidated Statutes in January.

Even without the statute, digital assets could not be ignored due to their increasing presence. The first step in dealing with them is to understand what they are and then to take an inventory of the ones that you have. The number and the pervasiveness of these property rights may not be realized from day to day, but a thorough inventory will demonstrate that they need to be an important part of your estate plan.

Pennsylvania’s 2021 Law Regarding Digital Assets & Fiduciaries

As have most states, Pennsylvania has passed the uniform law defining a digital asset as an electronic record in which an individual has a right or interest while not including an underlying asset or liability that is not an electronic record. As an example, an online banking account would be a digital asset, but the money in the account is a physical asset not covered by this law. However, as technology continues to advance, the possibility that the underlying asset also is a digital asset has grown. If the currency in the account is a virtual currency, such as bitcoins, then all of the relevant assets in this situation are digital in nature. In addition, these types of assets generally have associated “metadata,” which is additional information about the specific assets that are intended to make finding and using them easier.

Start with a Comprehensive Digital Asset Inventory

Generating a comprehensive list of digital assets to include in an inventory probably is the best way to begin estate planning for this category of property. The problem with this approach is that the list of possible assets continues to expand so, while comprehensive today, any list soon could become outdated. If you have an idea of the types of digital assets that exist, this will aid you in recognizing other possibilities when you creating or updating your estate plan.

Since the universe of digital assets seems to expand exponentially, you should look at information and data that are stored in electronic form on numerous devices (such as personal computers, external hard drives, and flash drives) as well as online and, increasingly, in the cloud. The following are among the common categories that you might have: emails; text messages; photos; videos; audio recordings; social media; records and other documents; websites, blogs, and domain names that belong to you; and digital wallets.

Your estate plan should deal with the different types of digital assets in an appropriate manner. You may want some to be saved and others deleted. Various accounts may need to be transferred so that they can continue to be used. If the property has a monetary value or generates revenue, then you have to look at who should possess it when you can no longer use it. Of course, digital assets may be subject to contracts or terms of service that must be reviewed when planning because they can control what can be transferred and this would be accomplished.

Importance of a Uniform Fiduciary Access to Digital Assets Act

While digital assets continue to grow in importance, people may not always have a plan in place for a time when they might require someone to step into a fiduciary role and handle these assets when are not able to do so. In the past, this has caused some difficulties with digital assets. The enactment of RUFADAA will set various default rules when these scenarios arise in Pennsylvania in the future. A look at these defaults will take place a little later in this review.

States have control over laws that establish duties of fiduciaries, who must act make decisions for the benefit of individuals for whom they are acting. States often will set the rules to follow when other provisions have not been made. Legislation, such as Pennsylvania’s RUFADAA, can play an important role by “providing consistent rules and procedures from state to state,” according to the Uniform Law Commission that drafted the Uniform Fiduciary Access to Digital Assets Act in order to achieve this objective.

While there can be, and are, some differences among states in the laws that have been passed after the uniform law for fiduciaries was drafted, they do accomplish uniformity from state to state to a great extent. One must remember that, when reading the following overview of Pennsylvania’s new law, the law in any given state with a uniform law may be similar but cannot be assumed to be identical.

The Revised Uniform Fiduciary Access to Digital Assets Act in Pennsylvania applies to a fiduciary acting under a Will or Power of Attorney; a personal representative acting on behalf of a decedent; a proceeding for the appointment of a guardian of the estate for an allegedly incapacitated individual as well as someone named as the guardian; and a trustee acting under a trust (20 Pa.C.S. Section 3903). The basic idea behind this law is that default rules are needed if you have not stated your preferences.

Limitations of the New Law’s Scope

However, these rules are limited in their scope because they cannot trump federal privacy laws, for example. This can lead to the situation involving emails in which so-called “envelope” information – which can include the identities of senders and recipients as well as time of transmission – generally is not within privacy protections while the actual content of the email is granted such protection under the uniform law. It should be noted that even the envelope is shielded from the government and law enforcement agencies.

While the default rules serve a purpose when an individual does not create a plan regarding access during incapacity or after death, the individual can deal with digital assets similarly to the way that control over tangible assets can be directed. The same legal tools may be employed, although important differences can exist.

Some New Definitions to Learn

When a “custodian” (as defined in Section 3902 of Pennsylvania’s Title 20 of its Consolidated Statutes) stores a digital asset of a “user” (i.e., a person having an account with a custodian), the custodian might offer an “online tool” that permits the user to choose a “designated recipient” to control decisions about the digital asset involved.

The definition of an “online tool” also is found in Section 3902. However, what it means probably is less obvious than other terms that have been mentioned, but it likely is the most important one to understand. Section 3902 defines it as “an electronic service provided by a custodian” allowing a “user, in an agreement distinct from the terms-of-service agreement between the custodian and user, to provide directions” regarding disclosing digital assets to third parties. Under RUFADAA, the online tool will control access, but not every custodian provides this tool and not every user takes advantage of its existence when one is offered by the custodian. Therefore, the uniform law establishes a hierarchy of other possibilities that can apply.

RUFADAA’s Hierarchy for Access After Online Tools

For example, when there is no online tool to provide direction, Section 3904(b) of Pennsylvania’s version of RUFADAA provides for the rung in the hierarchy just below online tools. At this point, the appropriate person who is named in a Will, a Trust, or a Power of Attorney as the fiduciary regarding any or all digital assets will be able to obtain the information that the user has permitted pursuant to the relevant legal document. Of course, being higher in the hierarchy, an online tool can override the terms of these legal documents.

The law also defines a third level of the hierarchy, which is the terms-of-service agreement. When the agreement does not require the user to act “affirmatively and distinctly from the user’s assent to the terms of service,” the user can provide for either of the first two instruments to “override a contrary provision” in the agreement (as noted in Section 3904(c)). Otherwise, the terms-of-service agreement can be followed to determine the rights to access and to use digital assets.

The Role & Authority of a Fiduciary under RUFADAA

The role of a fiduciary has been mentioned throughout this article. Unless the law provides authority for tools or orders, for example, that would override the powers given to a fiduciary, anyone who is named to fill this position can have considerable authority and corresponding responsibility. However, RUFADAA does provide limits. For instance, relevant terms of service cannot be ignored; additionally, a fiduciary is subject to other applicable laws, such as copyright laws.

Other limitations come from the duties of a fiduciary that include the duty of care, the duty of loyalty, and the duty of confidentiality. Also, due to potential obstacles that can delay the fiduciary’s efforts, there may be a temptation to take a short cut that, essentially, involves the impersonation of the user, which may be possible if the username and password of the user are known to the fiduciary. While it may be the easier to proceed this way, the law does not permit this tactic. Fiduciaries can use authority provided by the user in accordance with Section 3904 but can be held accountable if they go beyond this scope.

Section 3915 specifically deals with what fiduciaries can and cannot do regarding digital assets. Unless the right to a digital asset is held by a custodian or is controlled by a terms-of-service agreement, the fiduciary will have the right to access digital assets that belonged to the user as long as the fiduciary has been given authority over the assets of this individual. The fiduciary will be viewed as an authorized user of the property of a decedent (estate), settlor (trust), principal (power of attorney), or protected person (guardianship) under such circumstances. The new law also sets out what a fiduciary will need to do in order to request that an account be terminated when the time is deemed appropriate.

When a Fiduciary Seeks Content of Electronic Communications

When fiduciaries have authority that goes beyond “envelope” information, they will be faced some specific challenges. This would be a situation in which a deceased user extends the fiduciary’s power to dealing with digital assets to the actual content of electronic communications after the user’s death. This can be a very touchy area due to information that those communications may contain. If there is a custodian involved, the decedent’s personal representative, acting in a fiduciary capacity, may find that obtaining the content can be time consuming and, sometimes, extremely difficult. The decedent may have made this task easier by consenting to the release of the content of communications sent or received. Otherwise, the personal representative will have to explore asking the court that is involved to issue an Order that the information can be disclosed.

In both scenarios, the fiduciary for the estate then can request that the custodian provide the electronic communication’s content. However, the request may seem simple to make but can be much harder to implement; Section 3907 explains the steps. First, the personal representative needs to send a written request for disclosure in physical or electronic form, along with a certified copies of the death certificate and the grant of letters (either testamentary or of administration), plus a copy of the Will or other record that shows that the user consented to disclosure of the content.

Finally, the law can permit the custodian to request information that identifies the account as that of the decedent, with evidence linking the account to the user or a finding by a court specifying that the user had the account in question, that the information sought is “reasonably necessary” for the estate’s administration, and that federal privacy laws or other applicable laws would not be violated by the disclosure. As digital assets continue to proliferate, fiduciaries need to be prepared to overcome hurdles such as these in order to fulfill their duties and meet their responsibilities.

This brief look at digital assets and laws that are supposed to deal with them provides an idea that how the world’s increasing complexities since the internet age began in the mid-1980s. As technology advances, we must be ready to keep pace in life and in death. New laws have to understood, and we must attempt to keep up with additional laws that will be on the horizon. Then, the changing technological – and legal – environment must be part of the estate planning process. The last link involves fiduciaries who must be willing and able to understand what they can do and how they can do it as they are tasked with administrating estates, running trusts, implementing power of attorney, and carrying out guardianships. The future may not get any easier, but we have to be ready to face its inevitable challenges.