Digital Assets And Estate Planning: Protecting Your Online Legacy
- RHC Solicitors
- 12 minutes ago
- 6 min read
In an increasingly digital world, many of us store our most valuable personal and financial information online. Yet when it comes to estate planning, digital assets are often overlooked despite being an important part of our lives and legacy.
Whether it's your social media accounts, cryptocurrency, online businesses or cloud-stored photos and files, these digital assets can hold significant sentimental and financial value.
We believe your estate plan should reflect your entire legacy, both physical and digital. Here's what you need to know about managing your digital assets as part of your estate planning.
What Are Digital Assets?
Digital assets refer to any content, account or file stored in digital form, which you own or have the right to access.
Common examples include:
Social media accounts (e.g. Facebook, Instagram, LinkedIn)
Email accounts
Online banking or investment accounts (e.g. PayPal)
Cryptocurrency wallets (e.g. Bitcoin)
Cloud storage (e.g. Google Drive, iCloud, Dropbox)
Domain names or websites
Online shops or stores (e.g. Etsy, Shopify)
Loyalty programs or frequent flyer points
Digital photos, videos or music libraries
Some of these assets may have monetary value, whilst others may be emotionally significant to your loved ones. Regardless of their value, it's important to recognise they are assets.
Why Are Digital Assets Important
Without a clear plan, your digital footprint may become inaccessible or even lost after your death. Here's why it matters to consider your digital assets as part of your estate planning:
Prevent Data Loss Precious memories stored online (like family photos) could be lost without access.
Protect Financial Interests
Cryptocurrencies and monetised online ventures could remain unclaimed or mismanaged.
Avoid Legal Complications
Without instructions, family members may struggle to access or close digital accounts, sometimes facing strict privacy laws or terms of service limitations.
Guard Your Privacy
Unclear access can lead to personal information being exposed or misused.
Common Challenges When Gifting Digital Assets
While digital assets can carry significant financial or sentimental value, gifting them through your Will presents a number of unique challenges. Understanding these considerations is essential to ensuring your digital legacy is properly handled.
Access And Authentication
Many digital assets are secured with usernames, passwords, passkeys or multi-factor authentication. Without access credentials, even an executor may be unable to retrieve or manage these assets. In some cases, account recovery may be impossible without proper planning.
Jurisdictional Complications
Digital assets may be stored on servers in other states or countries, which can introduce legal and practical issues. Different jurisdictions often have different laws regarding data access, privacy and inheritance, making asset management more complex.
Platform Terms And Conditions
Each digital platform has its own terms of service, which govern what can happen to accounts after the account holder's death. Some providers allow for limited access or legacy planning tools, while others prohibit access entirely unless specific legal conditions are met. It's important to read these documents to ensure they align with your intentions.
Ownership Versus Licensing
One of the most misunderstood and important aspects of digital assets is the distinction between owning content outright and holding a licence to use it.
Many digital products, such as eBooks, music libraries, movie downloads, and software are governed by end-user licence agreements (EULAs) rather than sale contracts. When an individual purchases such content from providers (e.g. YouTube, Apple, Spotify), they are not acquiring ownership of the digital file or its underlying intellectual property. Instead, they are usually granted a non-transferable personal licence to access and use the content.
This distinction becomes significant in the context of estate planning. A personal licence generally terminates upon the death of the licence holder and cannot be legally assigned or bequeathed under a Will. Even if the deceased has paid substantial amounts for digital media libraries, those collections may not be transferrable to beneficiaries due to the licensing structure.
How To Incorporate Digital Assets Into Your Estate Plan
1. Create A Digital Asset Inventory
Start by listing all your digital assets. Consider how your usernames and other sensitive information should be handled to protect your privacy and security during your lifetime, while also enabling your executor (or other appointed digital caretaker) to manage your digital assets.
We recommend using a secure password manager that stores all raw login credentials. The testator may choose to store any master password in a sealed document or provide instructions to their digital caretaker regarding how the information can be securely retrieved.
Sensitive information should never be included in your Will or Enduring Power of Attorney, as these documents may become publicly accessible and could compromise the security of your accounts.
2. Appoint A Digital Caretaker
Consider nominating a trusted individual (preferably someone with technical proficiency) to assist with or manage your digital assets.
This can be done by appointing them within your standard executor role or by expressly naming them in your Will if you believe your primary executor may not have the necessary digital literacy.
3. Provide Clear Instructions
To protect any sensitive information, we generally recommend you create a separate memorandum that sits alongside your Will that will detail your specific instructions.
This memorandum should outline exactly what you would like to happen with each digital asset, who should have access to it, and whether accounts should be deleted, archived or memorialised.
Without these instructions, your digital caretaker will not know how to handle these assets or if personal memories and/or data need to be retrieved.
4. Review Platform Policies
As part of this process, it is important you review and consider a company's policies regarding your account after death. For example:
Facebook allows you to choose a Legacy Contact or have your account memorialised
Google provides an Inactive Account Manager who can get access to your account after a period of inactivity
Apple has a Legacy Contact tool to authorise someone to access your data after your death
You should also consider confidentiality concerns, particularly if your digital assets include information belonging to an employer, client or other third party.
5. Update Regularly
As laws surrounding digital assets will continue to develop, it’s important to regularly review and update your estate planning documents to ensure they remain legally effective and aligned with current regulations.
You should review your digital asset inventory periodically, and update it whenever you add or close accounts, acquire new digital property (such as cryptocurrency or NFTs) or change access details.
Dealing With NFTs And Intangible Digital Property
Digital assets such as non-fungible tokens (NFTs) and other forms of intangible cultural property are increasingly being recognised as part of a person’s estate, provided they hold identifiable and transferrable value.
If an NFT or similar digital asset is linked to a verifiable owner (typically via a digital wallet), it may be treated like any other form of intangible personal property. As such, it becomes subject to the usual rules of estate administration and distribution under a valid Will.
There are some key considerations:
Proof Of Ownership Is Essential
The digital wallet must be linked to the deceased, with clear evidence of the asset's existence and value.
Access Is Critical
As discussed above, your Executor and/or Digital Caretaker must be able to retrieve private keys, seed phrases or platform credentials in order to manage, sell, or transfer the asset. Without access, the asset may be lost permanently.
Always Get Legal And Financial Advice
When dealing with these types of assets, as jurisdictional and technical complexities can arise, particularly when platforms are based overseas or subject to rapidly evolving regulatory frameworks, it is crucial to obtain specialist legal and financial advise to ensure how assets are held, managed and sold align with your goals both during your life and after.
Are Executors Required To Deal With Digital Assets?
Yes!
Under a Will, Executors have a legal duty to identify and manage all assets of the estate, including digital assets. Ignoring them, whether due to complexity or unfamiliarity, can amount to a breach of fiduciary duty.
If the deceased held known digital assets such as cryptocurrency, domain names generating revenue, or other online accounts with financial value, failure to properly manage or distribute these can expose the executor to personal liability.
Executors who are unsure about how to handle digital assets should seek legal or technical advice to ensure they fulfil their responsibilities.
Summary
Digital Assets Is More Than Crypto
Your digital asset include everything from social media accounts, NFTs, domain names, and online subscriptions, which may have financial or sentimental value.
Plan Ahead
Keep a secure, up-to-date list of digital assets and access details. Include your wishes for how accounts and digital assets should be managed.
Include It In Your Estate Plan
Details digital assets in your Will or in a separate memorandum. Consider appointing a specific digital caretaker if needed.
Be Aware Of Limitations
Regardless of your wishes, many platforms will restrict asset transfer through their terms of service.
Stay Updated
Review your digital asset plan regularly to avoid confusion or data loss later.
We Can Help You Plan Ahead
At RHC Solicitors, our estate planning solicitors can help you take a modern and comprehensive approach to preparing your Will and broader estate plan. We are able to guide you through the importance of handling your digital assets, and put the appropriate measures in place to ensure you ad your loved ensure nothing is forgotten or lost.
If you're ready to get started, book an appointment today to safeguard your digital legacy tomorrow.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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