Got Digital Assets? Do I Need to Include my Digital Assets in my Estate Plan?

Digital assets are a hot topic in the news these days. But did you know they are also an emerging aspect of estate planning? While almost everyone takes care of their tangible assets in their estate plan, digital assets such as cryptocurrency or even cloud-based photos risk being lost forever if the proper precautions are not taken – a consideration we are now covering with all our Estate and Business Planning clients – and it is happening more and more often.

Here is what you need to know about your digital assets, and if they need to be included in your estate plan.

What are digital assets?

First things first, we need to define what qualifies as a “digital asset”. Digital assets may be broadly classified as virtual currency, social media accounts, bank and other financial accounts, websites or domain names, or other personal accounts electronically stored. Digital assets are more particularly defined under California Probate Code Section 871.

You may think since you do not have any cryptocurrency, this doesn’t apply to you.  However, estate planners are navigating new obstacles such as getting access to your social media accounts, cloud-based storage systems holding family photos, artwork or other intellectual property, domain names and blogs. Some now own non-fungible tokens (NFTs). In addition, most people pay all their bills online and receive paperless statements. These are all things that you want to consider accounting for in your estate plan!

A bit more on cryptocurrency…

Now, we want to dive a little deeper into cryptocurrency, since there can be a high monetary value associated with it.

To understand the necessary adjustments to your estate plan, it is important to understand how cryptocurrency works and what are the risks. Digital currency refers to all monetary assets held in digital form, which may be connected to a nation’s currency or a privately issued asset.[1] Virtual currency is not connected to a nation’s actual currency, but is a monetary value issued and controlled by private issuers.[2] Cryptocurrency is a virtual currency using a cryptography to make certain transactions secure and authentic. There are more complex “tech-y” details about how cryptocurrency works, and the technology relied upon to make the selling, trading and managing of cryptocurrency work around the world. We don’t need to get into that for the purposes of your estate plan.[3]

The important part is this: make sure your cryptocurrency is included in your estate plan, and that access to it is possible by one of your beneficiaries.

What is the risk of not including your digital assets in your estate plan?

In short, it can be lost forever. 

For the purposes of your estate plan, it is important to know how you access your cryptocurrency or other virtual currency.

There are two primary ways that various cryptocurrency networks provide you with access to your assets. First, you may have a “seed phrase,” which is long group of words that don’t make a full sentence.[4] For an example, “warlock implode lawyer drink love close cactus river street double water most.”[5] Second, you may have a long “private key,” which is much like a password tied to your seed phrase. A person may access your account if they have your username, password, answers to security questions and the ability to satisfy other verification steps. In many cases, getting to the log in page requires specific knowledge of various cryptocurrency networks.

So, what is the risk? There is no “forgot password” or “reset password” option. Your assets may be stuck in the digital world. Courts are now looking to your estate planning documents to try to determine the testamentary intent of the decedent. In other words, did the decedent want to provide access to their digital assets to their successors? Did the decedent want to distribute the digital assets in the same manner as described in the decedent’s estate planning documents? In most cases, estate plans are silent on what to do with digital assets and who may access your digital assets.

Even if you do not have any virtual currency or cryptocurrency, your other digital assets are at risk of either being stuck in the digital world or lost forever.

Years ago, attorneys would often advise clients to go through their parents’ mail to figure out what other accounts their parents owned. Now that most people receive their account statements online and are “paperless” your trustee or executor does not know how to figure out what accounts you have upon your death. Recently, some clients have run into issues trying to reset online passwords, but those passwords are sent to the decedent’s email. However, the trustee did not have access to those email accounts to figure out what account statements are owned by the decedent. This turns into a spiral of events that make it difficult for your successors to administer your estate.

In addition, most people are no longer printing their pictures or scrapbooking family photos. Family pictures are posted to social media sites or stored through a digital cloud-based storage system. Some people have original digital artwork or original digital music that are stored on a computer hard drive or digital cloud-based system. Others have rights to digital music, such as playlists, or digital ownership of movies. Music can be a sentimental memory of a loved one and in the past, people would save their loved one’s records or CDs reminding them of that person. A playlist may do the same thing.

Pictures and other digital assets may be stuck in the decedent’s account, which may be closed due to inactivity and lost forever. Your estate plan should also give your successor access to your digital assets in cloud-based accounts.

How will we help revise your estate plan?

So now that you know what you could lose, what would we do about it? First, we suggest filling in an updated list of assets for your estate planning binder. Second, we suggest listing your usernames and passwords in a safe and secure place for your successor trustee. Third, we will customize your estate planning documents to provide provisions that give your successors access your digital assets.

Contact our office if your digital assets are not included in your estate plan.

Goyette & Associates always offers a free estate planning consultation.

Contact Goyette & Associates at (888) 993-1600 or [email protected].


[1] Gerry W. Beyer and Kerri G. Nip, Cyber Estate Planning and Administration 21 (2021)

[2] Id.

[3] Id.

[4] Beyer, supra at 23.

[5] Id.