CEA Digital Asset Management 2 — Questions and Answers
Question 1: Which federal law most directly governs fiduciary access to a deceased person's email and social media accounts?
- Electronic Communications Privacy Act
- Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) (Correct answer)
- Computer Fraud and Abuse Act
- Digital Millennium Copyright Act
Correct answer: Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)
RUFADAA, enacted in most states, specifically grants fiduciaries legal authority to access a decedent's digital assets while respecting privacy.
Question 2: A client has a self-hosted cryptocurrency wallet with only a hardware device and no written seed phrase. What is the primary estate planning risk?
- The IRS cannot value the asset
- Heirs may permanently lose access to the funds (Correct answer)
- The wallet becomes property of the exchange
- Probate courts will freeze the asset indefinitely
Correct answer: Heirs may permanently lose access to the funds
Without the seed phrase or private key, heirs have no way to recover funds from a self-hosted wallet, resulting in permanent loss.
Question 3: Under RUFADAA, a deceased person's online tool directive (e.g., Google's Inactive Account Manager) takes precedence over which other instructions?
- A power of attorney
- A will or trust provision (Correct answer)
- A court order
- A HIPAA authorization
Correct answer: A will or trust provision
RUFADAA establishes a hierarchy where an online tool directive supersedes conflicting instructions in a will or trust regarding digital assets.
Question 4: Which type of digital asset typically passes outside of probate based on platform terms of service?
- Domain names registered with an estate attorney
- Airline frequent flyer miles with a named beneficiary (Correct answer)
- Cryptocurrency held on an exchange
- NFTs stored in a third-party custodial wallet
Correct answer: Airline frequent flyer miles with a named beneficiary
Many airline loyalty programs allow beneficiary designations that transfer miles directly upon death outside the probate process.
Question 5: An estate advisor is helping a client with a profitable YouTube channel. Which intellectual property right is most relevant to its transferability?
- Patent rights
- Trade secret protection
- Copyright ownership of the content (Correct answer)
- Trademark registration of the channel name
Correct answer: Copyright ownership of the content
Copyright in the videos belongs to the creator and is transferable by will, making it the primary asset tied to a YouTube channel's value.
Question 6: A client stores important estate documents in a cloud storage service. What critical step must the estate plan address?
- Converting all documents to paper form
- Registering the cloud account with a state agency
- Ensuring the fiduciary has credentials or recovery access (Correct answer)
- Transferring the account to a domestic cloud provider
Correct answer: Ensuring the fiduciary has credentials or recovery access
Without access credentials or a recovery mechanism, the fiduciary cannot retrieve documents critical to administering the estate.
Question 7: For estate tax purposes, how is Bitcoin typically valued when included in a gross estate?
- At the original purchase price (cost basis)
- At the fair market value on the date of death (Correct answer)
- At zero unless listed on a regulated exchange
- At the 30-day average price prior to death
Correct answer: At the fair market value on the date of death
Like other property, cryptocurrency is included in the gross estate at its fair market value on the date of the decedent's death per IRC §2031.
CEA Digital Asset Management 2
Which federal law most directly governs fiduciary access to a deceased person's email and social media accounts?