Digital Assets: Safeguard Your Online Legacy with Estate Planning

The way we share, store and transact has moved online. Family photos live in the cloud, financial statements arrive via email, and business records sit on servers scattered across the globe. While these digital assets are often just as valuable as physical property, many estate plans still treat them as an afterthought. Without clear instructions, heirs can lose access to treasured photos, cryptocurrency can disappear forever, and social media accounts may remain public long after death. As a trustee or estate planner, understanding the nature of digital assets and how to protect them has become a key part of modern estate planning.

What Counts as a Digital Asset?

The term digital assets refers to anything of value or significance that exists in electronic form. This includes:

• Personal media:  Photos, videos and documents stored on cloud services like iCloud, Google Drive or Dropbox. Family letters, journals and creative works saved on a laptop are also digital assets.

• Online accounts:  Email, social media profiles (Facebook, Instagram, LinkedIn), blogs and websites. Domain names and web hosting accounts can have monetary value and may generate advertising revenue.

• Financial and business accounts:  Online banking, investment apps and payment services such as PayPal or Venmo. Business documents stored on cloud drives or subscription services are also assets.

• Cryptocurrency and NFTs:  Digital currencies and non‑fungible tokens (NFTs) represent property that can be bought, sold or inherited, often through private keys or digital wallets. Without access to these keys, cryptocurrency can be lost forever.

These assets do not pass automatically when someone dies. Federal privacy laws prevent companies from releasing a user’s data without permission. Many service providers expressly prohibit account sharing, so loved ones who log in without authorization may violate terms of service or even criminal statutes. State laws vary on whether fiduciaries may access digital accounts. Without clear language in estate documents, even the most diligent trustee may be locked out.

Why Planning for Digital Assets Matters

For years, estate plans focused on tangible property—homes, cars, bank accounts—while digital lives grew quietly in the background. Today, those digital assets can be among the most valuable and personal. Photos, journals and social profiles tell stories that beneficiaries may cherish. Cryptocurrency and digital business assets may represent significant wealth.

Unfortunately, many estate plans still leave digital assets unaddressed. According to estate lawyers, personal representatives often struggle to access email or cloud accounts because the terms of service bar anyone but the account holder from logging in. Without proper authority, companies may refuse to provide information or close the accounts.

Legal Authority and RUFADAA

In response to these challenges, most U.S. states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This law allows estate representatives, trustees and agents under a power of attorney to access digital assets if the user consented in their estate documents. RUFADAA gives online service providers a framework to release data without violating privacy laws, but only when the estate plan explicitly grants that authority. Without that consent, providers typically release only a limited “catalogue of communications” (dates and addresses) and keep the content of emails or documents private. A trustee’s ability to manage digital assets therefore depends on whether the grantor’s will or trust includes specific language giving permission.

Step 1: Inventory Your Digital Footprint

The first step in protecting digital assets is identifying them. Encourage the grantor to create a digital inventory that lists all online accounts and electronic property. The inventory should include:

• Account names and the type of service (e.g., Apple Photos, Coinbase, Dropbox).

• Email addresses associated with each account.

• Description of the content or assets held (photos, business files, cryptocurrency, etc.).

• Instructions for how the assets should be handled—kept, archived, transferred, or deleted.

For security reasons, do not record passwords or private keys in the will. Instead, use a password manager or digital vault to store login credentials, recovery codes and encryption keys. Some services allow users to designate an emergency contact who will gain access if the account holder dies or becomes incapacitated. The inventory should note where the password manager is stored and how the trustee or digital executor can access it. This approach balances privacy (passwords are protected during life) with accessibility (authorized individuals can access them when needed).

Step 2: Include Digital Assets in Your Estate Documents

A thorough estate plan should treat digital property with the same care as tangible property. To do that, the grantor’s will or trust should:

• Name a digital executor or fiduciary who is comfortable with technology. This person may be separate from the personal representative or trustee and can focus solely on managing online accounts.

• Grant specific authority under RUFADAA, stating that the digital executor may access, manage, and dispose of digital assets and communications. Without this explicit permission, companies may refuse to release the data.

• Provide guidance on how each digital asset should be handled: whether to memorialize a Facebook profile, delete a Twitter account, or transfer cryptocurrency to a specific beneficiary.

Some people assume that leaving account usernames and passwords in a letter will suffice. However, this can be risky because unprotected passwords may be stolen, and using someone else’s credentials may violate terms of service. A legally recognized digital executor with properly drafted authorization avoids these problems.

Choosing the Right Digital Executor

A digital executor’s responsibilities can be complex. They may need to close email accounts, download photo archives, manage domain names, or file final posts to social media. Choose someone who:

• Understands how digital platforms work.

• Can coordinate with the trustee and estate attorney to ensure legal compliance.

• Will respect the grantor’s privacy and confidentiality.

For example, imagine a trust that holds a valuable NFT art collection. The trustee may be capable of managing traditional investments but may not know how to transfer NFTs or protect cryptocurrency wallets. Appointing a digital executor who is familiar with blockchain transactions can prevent costly mistakes and lost assets.

Step 3: Protect Privacy and Security

Even with a digital inventory and clear instructions, privacy and security remain paramount. Best practices include:

• Use encryption for sensitive files and password-protected devices so that unauthorized individuals cannot access them.

• Enable two‑factor authentication (2FA) on email, cloud storage and cryptocurrency exchanges. 2FA adds a layer of security by requiring a verification code in addition to a password.

• Update your digital plan regularly, especially after opening or closing accounts. Review the digital inventory each year to ensure it reflects current assets.

• Avoid including sensitive login information in wills or trusts, as those documents may become public during probate. Instead, store credentials in a secure password manager and reference it in the estate documents.

A Hypothetical Example

Consider Anna, an entrepreneur who owns a profitable online business, holds significant cryptocurrency assets, and stores thousands of family photos in cloud services. She appoints her brother as the trustee of her living trust and names her tech‑savvy niece as the digital executor. Her estate plan authorizes the digital executor to access online accounts under RUFADAA and instructs her to transfer her cryptocurrency to her children. Anna keeps a detailed digital inventory and uses a password manager, providing the trustee with instructions on how to access it upon her death.

When Anna dies unexpectedly, her niece is able to log into the password manager, obtain the keys to the cryptocurrency wallets, and transfer the digital assets to the trust without delay. Meanwhile, the trustee can close Anna’s social media accounts and download her photo archives according to her wishes. Without this digital plan, Anna’s family might have lost both sentimental memories and substantial financial resources.

Conclusion

Digital assets are no longer a niche concern. From cloud‑stored memories to cryptocurrency portfolios, much of a person’s wealth and history now exists online. Trusts and estate plans must evolve to protect this digital footprint. By creating a comprehensive inventory, including clear provisions in legal documents, appointing a knowledgeable digital executor, and maintaining strong security practices, you can ensure these assets are preserved and distributed according to the grantor’s wishes. As a trustee or advisor, staying informed about digital‑asset law and encouraging clients to take these steps is essential for safeguarding their online legacy.