Digital Assets and Estate Planning: What Happens to Your Online Life

9 min read

What Are Digital Assets, Exactly?

Digital assets estate planning starts with a deceptively simple question: what counts as a digital asset? The answer is broader than most people expect.¹

At the most obvious end of the spectrum are financial digital assets — online bank accounts, brokerage accounts, PayPal and Venmo balances, and cryptocurrency holdings like Bitcoin or Ethereum. These have real monetary value and can represent a significant portion of your estate. A Bitcoin wallet with no surviving record of its private key or seed phrase is, for practical purposes, gone forever.

But the category extends well beyond finance. Your email accounts contain years of personal correspondence, receipts, and documents your executor may need to settle your affairs. Social media profiles — Facebook, Instagram, LinkedIn — hold memories your family may want to memorialize or close. Digital photo libraries, whether stored in iCloud, Google Photos, or similar services, may contain thousands of irreplaceable images. If those accounts are locked, those memories are locked with them.

Other often-overlooked digital assets include:

• Domain names and websites, which may have commercial value or ongoing contracts tied to them
• Loyalty and reward points from airlines, hotels, and credit cards — some of which can be transferred to heirs
• Subscription services like streaming platforms, software licenses, cloud storage, and news subscriptions that are actively billing your accounts
• Online businesses, eBay stores, Etsy shops, and affiliate accounts
• Digital content you’ve purchased, including ebooks, movies, music libraries, and video games (note: many of these are licenses, not owned property, and cannot be transferred)

The scope matters because each type of digital asset presents different transfer challenges, and treating them all the same way is a planning mistake.

Why Digital Assets Are Uniquely Hard to Transfer

Physical property is relatively straightforward to hand off — a deed, a title, a key. Digital assets are different in two fundamental ways: they are protected by passwords and encryption, and they are governed by platform terms of service that may prohibit account sharing or transfer entirely.

When someone dies, their family often finds themselves locked out of accounts they had no idea existed. Even when they know the accounts exist, accessing them without credentials can require extensive legal proceedings — and even then, platforms don’t always comply.

The problem is compounded for cryptocurrency. Unlike a bank account, which has an institution behind it with compliance obligations, cryptocurrency wallets are controlled entirely by whoever holds the private key or seed phrase. There is no customer service line. There is no account recovery process. If the private key is lost, the funds are permanently inaccessible. Analysts estimate that roughly 20% of Bitcoin’s total supply may be permanently inaccessible due to lost private keys.²

Even for non-crypto assets, the administrative complexity is real. Getting access to a deceased person’s Gmail account, for instance, can require submitting death certificates, notarized letters of authority, and legal documentation — and Google may still decline to provide access to the account contents, only offering to delete it.

Create a Digital Asset Inventory — But Not in Your Will

The single most important thing you can do for digital asset estate planning is create a digital asset inventory: a comprehensive document that lists every significant digital account you own, what it contains, and how to access it.

What belongs in a digital asset inventory:

• Account names and the email address or username used to log in
• The name of each platform or institution
• Where the login credentials can be found (a specific password manager vault entry, a sealed envelope, etc.)
• For cryptocurrency: the type of wallet, where the seed phrase or private key is stored, and which exchange or hardware wallet holds the funds
• For domain names: the registrar, login, and any renewal details
• Instructions for what you want done with each account — closed, memorialized, transferred, or left active for a period

One critical rule: do not put this information in your will. Wills are filed with the probate court and become public record once the process begins.³ A will containing your account credentials is a document available to anyone who requests it. That is a significant security risk while you are alive and an identity theft risk for your estate after you die.

Instead, store your digital asset inventory in one of these ways:

• A reputable password manager (1Password, Bitwarden, Dashlane) that has an emergency access feature allowing a designated person to request access after a waiting period
• An encrypted document stored on a USB drive, kept in a fireproof safe with a note in your will directing your executor to it
• A sealed physical letter in a secure location your executor knows how to reach, updated periodically

Your will should reference the existence of the inventory and tell your executor where to find it — but should not contain the inventory itself.

Cryptocurrency Requires Extra Care

Cryptocurrency deserves separate attention because the consequences of poor planning are so unrecoverable. If you own any amount of crypto, your estate plan needs to address these specifics:

Seed phrases and private keys. Every non-custodial wallet (a wallet where you hold the keys yourself, as opposed to leaving funds on an exchange) is controlled by a 12- or 24-word seed phrase. Whoever has that phrase can access the funds. Your executor needs it. Store it on paper in a fireproof safe, or use a metal backup plate designed for this purpose. Do not store it only in a digital file that requires the password it protects to open.

Exchange accounts. If you hold crypto on a centralized exchange like Coinbase or Kraken, these accounts can be accessed through the normal executor process — but your executor still needs to know the account exists, which exchange holds it, and how to verify their authority. Some exchanges have explicit inheritance processes.

Hardware wallets. If you use a Ledger or Trezor device, your executor needs both the physical device and the PIN or seed phrase. The device alone is not sufficient.

Tax basis and reporting. The IRS treats cryptocurrency as property for federal tax purposes — not currency — meaning every sale, exchange, or disposition triggers a capital gain or loss.⁴ Your executor will need records of acquisition dates and costs to settle any tax obligations.

Staking and DeFi positions. More complex crypto holdings — staking pools, decentralized finance positions, NFTs — may require specialized knowledge to access and liquidate. Consider leaving explicit instructions or naming a technically capable co-executor.

RUFADAA: The Law That Governs Digital Access

Most people have never heard of RUFADAA — the Revised Uniform Fiduciary Access to Digital Assets Act — but it’s the primary law governing whether your executor can legally access your digital accounts.⁵ As of 2024, the vast majority of US states have adopted some version of it, with only a handful of states yet to enact it.⁶

The core principle of RUFADAA is a hierarchy: if you have used a platform’s built-in tool to designate a legacy contact or post-death access, that designation controls. If no such designation exists, a will or trust that explicitly authorizes your executor to access digital assets is the next best authority. If neither exists, the platform’s own terms of service take over — which often means no access at all.⁶

The practical implication is that explicit authorization matters. Your will should contain language expressly granting your executor authority to access, manage, and distribute your digital assets. This is not standard language in older wills, and many generic will templates don’t include it. If your will was drafted before roughly 2016 and doesn’t mention digital assets, it’s worth reviewing with an attorney.

Beyond the will, take advantage of platform-level legacy tools where they exist. Facebook has a Legacy Contact feature that lets a designated person memorialize your account. Google’s Inactive Account Manager lets you designate what happens to your account and who can receive data from it. Apple has a Digital Legacy feature for designating contacts who can access your Apple ID data.⁷ These platform tools operate independently of probate and can give your family access faster than any legal process.

Giving Access Without Giving Away Passwords Now

A common concern is the tension between planning ahead and maintaining security today. You don’t want to hand your executor your passwords now — people change, relationships change, and credentials change. Here’s how to balance the two.

Use a password manager with emergency access. Tools like 1Password’s Emergency Kit or Bitwarden’s Emergency Access feature let you designate a trusted person who can request access to your vault. After a waiting period you set (say, 48 or 72 hours), access is granted automatically unless you deny it. This means your executor has a path to access without you having to share anything proactively.

Create a letter of instruction. A separate document — sometimes called a side letter or memorandum of personal property — can accompany your will without being filed with it. Use this to provide more detailed guidance about your digital assets, updated annually, without touching the will itself.

Store credentials in layers. You don’t have to store every password directly. You can store the master password to your password manager in a sealed envelope in a fireproof safe, and store everything else in the manager. Your executor gets one key that unlocks everything.

Review and update annually. Digital accounts change frequently. Set a reminder to review your digital asset inventory once a year — add new accounts, remove closed ones, update credentials that have changed.

Where to Start

If digital assets estate planning feels overwhelming, start with the highest stakes first: cryptocurrency, online brokerage accounts, and any business-related accounts. Then work outward to email, social media, and photo storage.

The goal isn’t perfection — it’s giving the people who will manage your estate a fighting chance. A thoughtful inventory and a will with clear digital asset language can be the difference between a family that preserves what you built online and one that loses it entirely.

References

1. Internal Revenue Service, “Digital Assets,” IRS.gov, accessed June 2026, https://www.irs.gov/filing/digital-assets
2. Ledger Academy, “How Many Bitcoin Are Lost?,” Ledger.com, accessed June 2026, https://www.ledger.com/academy/topics/economics-and-regulation/how-many-bitcoin-are-lost-ledger
3. Nolo, “How to Find and File the Will,” Nolo.com, accessed June 2026, https://www.nolo.com/legal-encyclopedia/finding-filing-the-will.html
4. Internal Revenue Service, “Frequently Asked Questions on Virtual Currency Transactions,” IRS.gov, accessed June 2026, https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions
5. Uniform Law Commission, “Fiduciary Access to Digital Assets Act, Revised,” UniformLaws.org, accessed June 2026, https://www.uniformlaws.org/committees/community-home?CommunityKey=f7237fc4-74c2-4728-81c6-b39a91ecdf22
6. Nolo, “The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA),” Nolo.com, accessed June 2026, https://www.nolo.com/legal-encyclopedia/ufadaa.html
7. Nolo, “How to Add Legacy Contacts to Your Online Accounts,” Nolo.com, accessed June 2026, https://www.nolo.com/legal-encyclopedia/how-to-add-legacy-contacts-to-your-accounts.html
8. Internal Revenue Service, “IRS Notice 2014-21 (Virtual Currency Guidance),” IRS.gov, accessed June 2026, https://www.irs.gov/pub/irs-drop/n-14-21.pdf
9. Internal Revenue Service, “Virtual Currency: IRS Issues Additional Guidance on Tax Treatment,” IRS.gov, accessed June 2026, https://www.irs.gov/newsroom/virtual-currency-irs-issues-additional-guidance-on-tax-treatment-and-reminds-taxpayers-of-reporting-obligations
10. Cornell Law School Legal Information Institute, “Guardianship,” Cornell LII, accessed June 2026, https://www.law.cornell.edu/wex/guardianship

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