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Estate Planning for Digital Assets


 Planning your end of life is important. You need legal documents stating how you want your assets distributed or handled. But your estate plan may include more than you think.

Physical assets are just a part of the plan. Your digital assets are just as important. With life becoming more digital every day, we must create a plan for our digital lives.

Missing this crucial step could leave your loved ones without some of your most important assets, even if they are virtual.

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Estate Planning for Digital Assets

If you've already created your estate planning documents, you may have decided who will inherit your jewelry, antiques, and even your house. But have you decided who will get everything you own online?

Most of us today live a digital life to some extent. Not identifying who can access to these online financial accounts or even social media accounts can be detrimental to your loved ones. There's more value to a digital account than most people think, even if it's not monetary value.

At first glance, online accounts may not seem like a big deal. Most of these assets don't have monetary value, but they can have sentimental value. Some accounts could even be used against your character if you were to leave them open when you die. The risks are high if you don't state in a legally binding document who has access to your digital assets when you die.

That's why estate planning for digital assets is an important part of your estate plan. It protects your assets (monetary and non-monetary) while preserving your character and protecting your loved ones.

What Is an Estate Plan?

Your estate plan is the instructions stating where your assets will go. It can also include documentation of your final wishes regarding your final arrangements or who can handle your decision-making should you become incapacitated.

This is the most important document in all of your financial paperwork. It assigns jobs to your loved ones and says under no uncertain terms who receives your assets.

Each estate plan is different, but they often include a will, durable power of attorney, advanced medical directives, instructions for your beneficiaries, and sometimes a trust.

Think of your estate plan as your instructions on handling your end of life. Whether this means when you die or if it sets up your loved ones to make decisions for you when you can't, it oversees your estate. It gives you peace of mind knowing everyone receives what you wanted them to from your estate.

What Is a Digital Asset?

You might wonder how digital and online assets would be an issue when you die. Who cares about your email accounts, social media accounts, or cell phone apps, right?

There's more to worry about than you think.

Without a digital estate plan, your loved ones may not have access to certain digital assets they need. For example, if you have your family heirloom photos in an online account and didn't share the password and permission to access them with your loved ones, they can't access them when you die.

So what are digital assets? Some digital assets may not be a big deal, such as online gaming accounts or chat rooms, but most have some value to you and your loved ones.

What seems like something as simple as sharing a password isn't as easy as it seems. You must follow the law and the terms of service agreements each company has you sign. You know those agreements you usually scroll through and just accept? They contain information about what you can and cannot do with your account.

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Digital Assets Examples

Valuable digital assets can be anything from online bank accounts, photos saved in the cloud, cryptocurrency, online monetized accounts, credit card accounts, and domain names, as a few examples.

Any asset that you don't physically have in hand but that has value is a digital asset your loved ones will care want to access. Your digital asset inventory should also include social media, email, eCommerce, online billing, and loyalty accounts.

Importance of Digital Assets Estate Planning

A digital estate plan helps your loved ones know what to do next with your digital assets. For example, if you have pictures in a cloud account, they can access them with the password you provide in your estate plan.

They can also close old social media accounts, take care of online bills, and cash out any online bank accounts. In short, they can tie up any loose ends rather than leaving your information out there in cyberspace.

Without digital estate planning, your loved ones may not be able to manage digital assets for you. This may leave some of your business open-ended, put some of your assets through probate, and cause your family members stress.

Digital Assets Management: How to Create an Estate Plan

So how do you create a digital asset estate plan? The process is much like creating your original estate plan. You need a list of all your digital property to decide how you want them handled and then to put the plan into place.

Assemble List of Digital Assets

Your first step is to create a list of all digital assets. Exhaust everything you might own, including social media and email accounts. It may seem trivial at first, but include everything you can think of.

As you assemble your list of online accounts, don't forget to write down the passwords and answers to any security questions. Your loved ones will need this information if they need to access your accounts.

Decide What You Want to Be Done With These Assets

Next, you'll need to provide explicit instructions on how to handle the assets. For example, do you want your social media profiles closed? Do you want your loved ones to take pictures from your online accounts?

If you have online accounts with monetary value, designate who gets the assets and how they obtain them. Be as specific as possible in this step regarding who gets what from your accounts. Don't leave anything for speculation, just like with your physical assets. There's no such thing as too much information here.

Allocate Access

Some of your digital assets might require more steps. For example, if you run an online store or marketplace, you may appoint a family member to keep the business running. If you run a social media account, you may want someone to take it over for you.

Think of how you handle digital assets you own and if you want it to continue when you die or for the accounts to be shut down right away.

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Appoint an Executor

Just like you have an executor for your physical will, you should have one for your digital assets too. It might be tempting to use the same executor, but that can put a lot of pressure on one person.

Dealing with your digital estate plan and all that it entails can be a big job. The executor must follow state and federal law, along with any of the terms of service agreements for each asset. Separating the duties ensures everyone can handle your estate plan the way you wanted.

Ensure It Is Legal and Secure

It's important to keep your digital estate plan separate from your will for privacy reasons. Wills are public information, but the last thing you want is your online account information shared with the world.

Keep your digital estate plan separate, but make sure it's legal. Your attorney can help you draft one, and you can even keep a copy with them for safekeeping. If not, keep a copy locked up in a password-protected online database or in a locked safe, such as a safety deposit box.

2022 Digital Asset Law

Digital asset law is much different than laws for your last will and testament. Knowing the rules and regulations will help ensure your assets are properly protected.


State laws vary considerably by state. Since each state has its own laws, check with your attorney to find out what laws you must follow.


Federal law prohibits unauthorized access to digital assets. This is mainly to protect against hacking, but without explicit consent from you, before you die, your loved ones, even those you appointed as executors of your estate cannot access your digital assets.

This means just because a loved one has your ID and password to get into your account doesn't mean it's legal. Provide fiduciary access to your digital assets by creating a legally binding document stating your intentions for the property when you die.

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Estate Planning for Digital Assets FAQ

Are Digital Assets Considered Property?

Digital assets are personal property even though you can't touch them. Pictures online, bank accounts, and even social media profiles are property. They belong to you and could affect your estate plan if not handled correctly. State and federal law governs digital assets and ensures companies and users handle them correctly.

Can You Inherit Digital Assets?

You can inherit digital assets if they are laid out in an official estate plan. You can't just tell someone your ID and password and expect that they'll be able to access your account. Everyone must follow the federal and state laws, which usually means each asset must be listed in the estate plan with named beneficiaries to legally receive them.

Is a Bank Account a Digital Asset?

Online bank accounts are digital assets. These don't include the bank accounts you hold at your local brick-and-mortar bank, though. They are the bank accounts you open and manage online only.

Are Digital Assets Tangible or Intangible?

Digital assets can be tangible and intangible. Tangible assets include things you can touch, such as computers, smartphones, or hard drives. Intangible digital assets include online accounts like email, social media, or an eCommerce store.

The Bottom Line

Estate planning for digital assets is still new and is always evolving. Unlike your traditional will and estate plan, though, it's easy to change your digital estate plan. Consider reviewing your plan annually, adding new accounts, and deleting old accounts, so your loved ones have the information they need to access your digital property.