Technology has made life easier in many ways—but it has also created new challenges when it comes to estate planning. If your digital assets aren’t included in your estate plan, there’s a real possibility they could be lost forever when you pass away.
Without clear instructions, your loved ones may struggle to even locate your digital accounts, let alone access them. In some cases, accessing them could violate privacy laws or the terms of service set by the platform. That’s why it’s important to understand how digital assets work and how to properly include them in your estate plan.
What Counts as a Digital Asset?
Digital assets include any online accounts, files, or records stored on a computer, smartphone, or in the cloud. Generally, they fall into two categories:
Digital assets with financial value, such as:
- Cryptocurrency like Bitcoin or Ethereum
- Online payment platforms like PayPal or Venmo
- Loyalty programs or reward points
- Revenue-generating websites or domain names
- Intellectual property such as photos, videos, music, or writing that generate royalties
Digital assets with sentimental value, such as:
- Email accounts
- Digital photos and videos
- Social media accounts
- Personal blogs or websites
- Cloud storage files
While sentimental assets may not have financial value, they can be incredibly meaningful to loved ones and future generations.
Do You Actually Own Your Digital Assets?
Many people are surprised to learn they don’t actually own some digital assets. In many cases, you only have a license to use them.
For example, cryptocurrency and online payment accounts can usually be transferred in an estate plan. But items like eBooks or music purchased through certain platforms are often licensed for personal use only and may not be transferable.
Whether an asset can be passed on often depends on the platform’s terms of service agreement. These agreements may restrict access to the original user or outline specific procedures for heirs.
This is why proper planning—and clear instructions—are essential.
Laws Governing Digital Assets
For many years, there were no clear laws governing access to digital accounts after someone’s death or incapacity. As a result, families were often locked out of accounts or lost valuable digital information.
To address this issue, most states adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This law allows fiduciaries—such as executors or trustees—to access digital assets under certain conditions.
Access generally follows three levels of priority:
- Online tools provided by the service provider
Some platforms allow you to designate someone to manage your account if something happens to you. For example, Google offers an inactive account manager, and Facebook allows you to name a legacy contact. - Instructions in your estate plan
If no online tool is used, your Will, trust, or power of attorney can grant authority to access your accounts. - The platform’s terms of service agreement
If neither of the above exists, the company’s policies will determine what happens to the account.
Because of this structure, it’s important to include digital assets in your estate planning documents and leave clear access instructions.
5 Steps to Include Digital Assets in Your Estate Plan
If you want your digital assets handled properly, these five steps can help ensure everything is accounted for.
- Create an Inventory of Your Digital Assets
Start by listing all of your digital accounts and assets. Include information about where they are stored and how they can be accessed.
This may include:
- account names
- usernames
- passwords or password manager instructions
- cryptocurrency wallet details
- storage locations
Store this information securely and make sure your fiduciary knows how to access it.
- Include Digital Assets in Your Estate Plan
Your digital assets should be addressed in your Will, revocable living trust, or Durable Power of Attorney, just like any other property.
You can specify:
- who should manage and/or inherit certain digital assets
- which accounts should be preserved
- which accounts should be closed or deleted
However, avoid placing passwords directly in your estate documents since Wills often become public record.
- Decide What Access Your Fiduciary Should Have
You may want your executor or trustee to access certain accounts but not others. For example, you might allow them to retrieve photos but not read private messages.
Your estate plan can include instructions that limit or guide how these accounts are handled.
- Include Relevant Devices
Digital assets are often easier to access if the physical device is available. Smartphones, computers, tablets, and external drives may contain important data or saved login credentials.
Your estate plan can specify how these devices should be handled and who should receive them.
- Use Account Authorization Tools
Many service providers now offer tools that allow you to designate someone who can manage your account after your death. If these tools are available, it’s a good idea to use them and ensure they align with the instructions in your estate plan.
Don’t Overlook Your Digital Legacy
As our lives become increasingly digital, it’s essential that estate plans evolve as well. Digital assets may hold financial value, personal memories, or important information your loved ones will need.
By creating a clear inventory, leaving access instructions, and including digital assets in your estate plan, you can ensure these assets are preserved and handled according to your wishes.
Working with an experienced estate planning attorney can help ensure both your traditional assets and your digital life are properly protected.
If you have any questions—or if you’re ready to begin putting a plan in place to protect your family, your assets (both tangible and digital), and the legacy you want to leave behind—we’re here to help. Click here to schedule a complimentary 15-minute informational call today with our client services coordinator.
