The Essential Guide to Digital Assets and Estate Planning: What You Need to Know
- Rob Corbett, Esq.
- May 8
- 4 min read
Understanding Digital Assets in Today’s World
What Counts as a Digital Asset?
Digital assets include any content, records, or rights stored electronically. This ranges from email accounts and social media profiles to online banking credentials, domain names, streaming subscriptions, cryptocurrency, and even NFTs (non-fungible tokens).
Why Digital Assets Matter in Estate Planning
As our lives become more digital, the value—both sentimental and monetary—of these assets increases. Many people use social media as a timeline, a photo album of memories. Without a clear plan, digital content may be lost, inaccessible, or misused after death.
The Legal Landscape: Digital Assets and Fiduciary Access
Introduction to RUFADAA
The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) standardizes how executors, trustees, and agents gain access to digital assets. Both New York and Florida have adopted this model with some changes to conform it to the state's law.
How Fiduciaries Gain Access to Digital Assets
Fiduciaries may access digital records only if the original owner granted permission either through an online tool or via legal documents like wills or powers of attorney.
The Role of Explicit Consent
Access is not automatic. Without explicit written permission, even a court-appointed executor might be denied access due to terms of service or federal privacy laws.
What Are Online Tools and Why They Matter
Online Tools Defined
An online tool is a platform feature provided by service providers (like Google or Facebook) that lets users designate who can manage or access their accounts if they're incapacitated or deceased. Examples of common online tools include:
Google Inactive Account Manager
Facebook Legacy Contact
Apple Digital Legacy
Legal Hierarchy of Online Tools vs. Wills
Under RUFADAA, if a user sets preferences using an online tool, these override any conflicting instructions in a will or trust. That makes online tools legally significant and enforceable. For example, both NY EPTL § 13-A-2.2 (a) and FS § 740.003 (1) state "a direction regarding disclosure using an online tool overrides a contrary direction by the user in a will, trust, power of attorney, or other record."
Key Challenges in Digital Estate Planning
Terms of Service Agreements
Most online platforms restrict third-party access unless the account holder provided advance authorization. This can make retrieval difficult even for authorized executors.
Privacy and Security Concerns
Sharing login credentials poses security risks. Estate plans must strike a balance between accessibility and protection.
The Problem of Lost or Inaccessible Assets
Without proper planning, digital wallets or password-protected files could become permanently inaccessible. This could cause great loss, both financially and emotionally.
Building a Digital Estate Plan from Scratch
Creating an Inventory of Digital Assets
Start by listing all digital accounts, assets, and logins. Include everything from email and cloud storage to online stores, investment platforms, and crypto wallets.
Naming a Digital Executor
A digital executor is someone appointed to manage digital assets. This may or may not be the same person as your general executor. However, if your general executor is tech-savvy, it is typically easiest to use the same person for both tasks.
Storing Access Information Securely
Use encrypted digital vaults or secure password managers. Document access credentials but do not include them directly in wills (which may become public).
Integrating Digital Assets into Traditional Estate Planning Documents
Updating Wills and Trusts
We can help to make sure you include clauses that authorize fiduciaries to manage digital assets. We will make sure you clarify your intentions for each type of digital property.
Including Digital Powers in Powers of Attorney
We can ensure that your durable power of attorney explicitly authorizes your agent to handle digital affairs if you become incapacitated.
How to Use Online Tools with Confidence
Steps for Setting Up Online Tools
Log into the platform (e.g., Facebook or Google).
Navigate to legacy or security settings.
Select and authorize a trusted contact.
Choose what data they can access or manage.
Best Practices for Managing Legacy Settings
After we do your estate planning documents, you should review settings annually or when and if you update your estate documents. Make sure selected contacts are aware and willing.
Keeping Tools Synced with Legal Documents
Avoid conflicts between online tool settings and your estate plan. Consistency ensures your wishes are honored.
Special Considerations for Digital Currency and NFTs
Digital currency and NFTs require specialized planning:
Document wallet locations and keys.
Store backup seed phrases securely.
Specify digital asset handling in your trust or will.
Cloud Storage and Email Accounts: Preserving Personal History
Backup important photos, documents, and messages.
Decide whether accounts should be deleted or passed on.
Provide clear instructions in your estate plan.
Social Media After Death: Memorialization and Management
Each platform has unique rules:
Facebook: Memorialize or delete.
Instagram: Verified family members can request removal.
Twitter/X: Offers limited post-mortem options.
Business and Financial Accounts in the Digital Realm
Ensure digital access for:
Online banking and investment portfolios.
Business websites and digital storefronts.
Automated payment systems and subscriptions.
Password Managers and Security Protocols
Use reputable tools like LastPass, 1Password, or Bitwarden. Assign emergency access or use export features with caution.
Regular Review and Maintenance of Your Digital Estate Plan
Contact us to update your digital estate plan:
After major life events.
When new accounts or assets are created.
At least once every two years.
Frequently Asked Questions (FAQs)
Q1: What happens to my email accounts when I die? They may be deleted or locked unless you've authorized access via a will or online tool.
Q2: Can my executor access my Facebook or Google account? Yes, but only if explicitly authorized through platform settings or legal documents.
Q3: What if I never used an online tool? Then access is limited and governed by the platform's terms of service.
Q4: Are digital assets taxed? Some, like cryptocurrency, may have tax implications—consult a tax advisor.
Q5: Can I leave cryptocurrency in a will? Yes, but include access instructions securely and separately.
Q6: Should I use a digital executor? If you have significant digital assets, appointing a knowledgeable digital executor is wise.
Conclusion: Planning for the Digital Future Today
In an era where digital footprints carry significant value, ignoring digital assets in estate planning can be costly. By using online tools and working with us to create or update your legal documents, you can ensure your digital legacy is handled exactly as you wish.
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