In an era where much of our lives exist online, traditional estate planning that focuses solely on physical property and financial accounts leaves a significant gap. Digital assets — from cryptocurrency and online businesses to social media accounts and digital photographs — carry both financial and sentimental value that must be addressed in your estate plan.
What Are Digital Assets?
Digital assets encompass a broad category of electronically stored information. For estate planning purposes, they generally fall into four categories:
Financial digital assets: Cryptocurrency (Bitcoin, Ethereum, etc.), online banking and investment accounts, PayPal and Venmo balances, online store credits, and digital payment platform accounts. These can represent significant financial value — and without proper planning, they can be permanently lost.
Business digital assets: Domain names, websites, online storefronts, advertising accounts, business email accounts, customer databases, and intellectual property stored digitally. For business owners, these may be the most valuable assets in the estate.
Personal digital assets: Email accounts, social media profiles, cloud-stored photographs and videos, digital music and e-book libraries, and online gaming accounts. While their monetary value may be limited, their sentimental value can be immense.
Loyalty and rewards programs: Airline miles, hotel points, credit card rewards, and retailer loyalty programs. These often have significant cash value and specific terms of service regarding transferability.
California's Legal Framework: RUFADAA
California adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2016, codified in Probate Code Sections 870-884. This law governs how fiduciaries — trustees, executors, agents under power of attorney, and conservators — can access a deceased or incapacitated person's digital assets.
RUFADAA establishes a three-tier priority system for determining whether a fiduciary can access digital assets. First, any online tool designated by the user takes priority (such as Google's Inactive Account Manager or Facebook's Legacy Contact). Second, the user's estate planning documents (will, trust, power of attorney) that specifically address digital assets. Third, if neither of the above exists, the platform's terms of service control — and most terms of service severely restrict access.
The key takeaway: if your estate plan does not specifically address digital assets, your fiduciary may have little or no ability to access them.
Cryptocurrency: A Special Challenge
Cryptocurrency presents unique estate planning challenges because it is accessed through private keys — long strings of characters that, if lost, render the cryptocurrency permanently inaccessible. There is no bank to call, no customer service to contact, and no password reset option. Billions of dollars in cryptocurrency have been permanently lost because holders died without sharing access information.
Best practices include: storing private keys in a fireproof safe or safety deposit box, using a hardware wallet with clear instructions for your successor trustee, documenting which exchanges you use and how to access them, considering a multi-signature arrangement for large holdings, and including specific cryptocurrency provisions in your trust.
Practical Steps for Your Estate Plan
To properly address digital assets in your estate plan, start by creating a comprehensive digital asset inventory listing every online account, platform, and digital asset you own. Store this inventory securely — a password manager with a shared vault or a sealed document in your estate planning binder. Grant your trustee or agent explicit authority to access digital assets in your trust and power of attorney documents. Use each platform's legacy tools when available. And update your inventory regularly as your digital footprint changes.
At Abrate & Olsen Law Group, we incorporate digital asset planning into every estate plan we create. Contact us to ensure your online legacy is properly protected.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Digital asset laws evolve rapidly. Contact an attorney for current guidance.