Written by Benjamin Kingsley
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Here is an overview of the fiduciary responsibilities of an agent under financial power of attorney in managing digital assets:
An agent acting under financial power of attorney has important fiduciary responsibilities when it comes to managing the principal’s digital assets. These responsibilities stem from the agent’s duty to act in the principal’s best interests and to properly manage their financial affairs. As digital assets have become an increasingly significant part of many people’s financial lives, agents must be prepared to handle these assets appropriately.
Some key fiduciary responsibilities of an agent regarding digital assets include:
Identifying and inventorying all relevant digital assets
Gaining proper access to accounts and assets
Securing and protecting digital assets from unauthorized access
Managing digital assets in accordance with the principal’s wishes and best interests
Keeping detailed records of all actions taken regarding digital assets
Avoiding commingling of the agent’s own digital assets with the principal’s
It’s important to note that laws regarding digital assets and fiduciary access are still evolving in many jurisdictions. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been adopted by many states to provide a legal framework for fiduciary management of digital assets. Agents should familiarize themselves with the applicable laws in their state.
When managing digital assets, agents must be mindful of privacy concerns and terms of service agreements for various online accounts and services. They should only access accounts and information necessary to fulfill their duties as an agent. Additionally, agents should take care to protect sensitive information and maintain the security of the principal’s digital presence.
Agents may need to work with technology professionals or digital asset specialists to properly manage complex digital holdings like cryptocurrency wallets or online businesses. As with other financial matters, agents have a duty to seek expert assistance when needed to properly manage digital assets.
Failure to properly manage digital assets could potentially expose an agent to liability for breach of fiduciary duty. Therefore, it’s crucial for agents to take their responsibilities regarding digital assets seriously and handle them with the same level of care and diligence as traditional financial assets.
Do you have questions about or need assistance with a power of attorney? Please click here to email us at contact@legalandme.com.
Do you need a power of attorney form? We make a do-it-yourself power of attorney: finance power of attorney or healthcare power of attorney.