Family photos stored in the cloud. An online investment account. IP or fractional shares in a company. Email inboxes with years of personal and financial records. These assets are part of your legacy, but without digital business estate planning, your loved ones may lose access to them.
A digital asset is a non-tangible resource stored and managed electronically. To be considered an asset, it must provide value to its owner and be transferable through a sale, gift, or other exchange of ownership rights.
To manage digital and online assets, the right person needs to locate them, prove authority, and gain access quickly. Without legal authority and access, families may spend months trying to recover funds, preserve records, or prevent accounts from being closed.
Common Digital Assets
Today, people usually own multiple digital assets. Some assets have financial value, while others are sentimental orcontain private information.
Common traditional digital assets include:
- Photos or videos stored online
- Email accounts
- Social media profiles
- Financial and investment accounts
- Payment apps and services
- Websites and domains
Newer digital assets are based on blockchain or similar technologies:
- Cryptocurrency
- NFTs
- Tokens
- Security Tokens
- Central Bank Digital Currencies
Each type of asset has its own access requirements. Financial accounts require a password and multi-factor authentication. Cryptocurrency held on an exchange may require identity verification, while a self-custody wallet relies on private keys or a seed phrase. Losing those keys or recovery details can make the assets unrecoverable.
Websites and monetized content can generate revenue streams through advertising, subscriptions, or affiliate links. Accessing them usually requires more than one login, like a domain registrar or hosting account. Intellectual property like proprietary software and trademarks may also be subject to licensing agreements.
Personal accounts like email often control password resets, while cloud storage may hold tax returns, estate documents, and family photographs. Social media profiles may have sentimental value, commercial value, or both.
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Cryptocurrency and Special Planning
Cryptocurrency is especially challenging because it’s decentralized and stored in digital wallets with private keys or seed phrases. Unlike traditional financial accounts, crypto does not have paper statements or a financial institution that a beneficiary can easily contact.
Without access, your heirs could lose valuable digital wealth — possibly forever. To prevent this, make sure your will, trust, and/or powers of attorney clearly outline your digital assets. Consider naming a tech-savvy executor or trustee who can interpret a digital asset inventory, manage password managers, and coordinate legal transfer and compliance.
Protecting Continuity
Even with a password, your loved ones may not have legal permission to access your accounts. Federal and state privacy laws, user agreements, and provider policies can limit what they are allowed to do.
But there are access planning steps you can take. Start by creating an inventory of important accounts and digital property. Include where each asset is held, whether it’s under trust ownership, and your intentions. Update your inventory as you open or close accounts.
Next, designate the appropriate authority. That may be a digital executor, trustee, or agent under a power of attorney. Finally, keep passwords, private keys, and recovery information secure with clear instructions for locating them.
Today, digital assets are an important part of both personal and business succession. But incapacity also affects estate planning during sudden illness. If you’re not sure how incapacity impacts your digital assets, call Hatley Law Group today.
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