EFS Protection Inheritance

After a directory is EFS-activated, any newly created immediate children are automatically EFS-activated if not manually overridden. The EFS attributes of the parent directory take precedence over the EFS attributes of the file system.

The scope of the inheritance of a directory is exactly one level. Any newly created child also inherits the EFS attributes of its parent if its parent directory is EFS-activated. Existing children maintain their current encrypted or non-encrypted state. The logical inheritance chain is broken if the parent changes its EFS attributes. These changes do not propagate down to the existing children of the directory and must be applied to those directories separately.