If getting your affairs in order through estate planning once meant tracking down bank accounts, life insurance policies, and maybe even a stuffed-in-a-cupboard stock certificate — today, it most likely also involves a more challenging feat: figuring out passwords, private keys, and how to determine value of assets held online.

Digital assets have become an integral part of modern American wealth — and unsurprising, almost all Americans have an online presence by the time they are a toddler. The world of digital assets can be incredibly valuable for the digital asset holder, but if something unfortunate and unexpected happens, significant assets could become completely inaccessible if no one knows where to look or how to access those accounts.

Before diving in, it might be helpful to explain what exactly is a digital asset. In the plainest of terms, a person’s digital portfolio covers their entire online presence, and “digital assets” are simply items and accounts that are stored electronically. Specifically, the term “digital portfolio” or “digital assets” covers a broad area of domains, including:

• Financial – all of your online checking and savings accounts, investment or brokerage accounts (particularly if you have opted out of paper statements and transact primarily online), cash exchange accounts (Venmo and PayPal, for example), tax-filing and document storage related accounts;
• Social Media – email domains and all social media accounts (Facebook, Instagram, etc.), blogging or TikTok accounts, and also all of your digital image portfolios (like Shutterfly).
• Personal Health Accounts – your “MyChart” or similar health document retention account.
• Expense Accounts - your digital portfolio also includes all of your online expense accounts, such as utility bills, mortgages, credit cards, etc., if such accounts are primarily accessed and managed online.
• Cryptocurrency Portfolio – this is the category that most people identify with “digital assets”. These include assets like Bitcoin, Ethereum, and other blockchain-based holdings.

Cryptocurrency, while a subset of digital assets, deserves its own spotlight for estate planning purposes. Unlike traditional currency issued by governments, cryptocurrencies are decentralized and rely on blockchain technology. Ownership is tied to a “private key”, which is a string of digital code that functions like the ultimate password. If the owner were to lose the key, then the asset may be lost forever. For this unpredictable world, there is no customer service line, nor is there a “forgot password” link. There is simply a digital black hole. It’s no wonder many people feel like cryptocurrency lives somewhere between cutting-edge finance and a treasure hunt with no map.

Estate planning for digital assets is usually handled in the same manner as traditional assets, depending on how your estate plan is structured. If you have a revocable trust, then so long as the digital asset is properly titled or assigned to the trust, the trustee can manage and distribute it according to the trust terms. If you have a will, then upon your passing, any digital asset held in your individual name may pass through probate and be distributed under the terms of your will. Often, the digital asset itself allows for designated beneficiaries or payable on death transfers, which is another option to discuss with your estate planning attorney.

However, the challenge that most face with digital assets is not how to distribute the asset, but rather, when the distribution occurs, as it can only be possible if the fiduciary can actually find and access the asset. Your fiduciaries — whether a trustee, personal representative, or agent under a power of attorney — need to know what exists and where it exists. Unlike a traditional bank account that sends monthly statements, digital assets can easily go unnoticed. Then, even when your fiduciary knows about the asset, they must be able to access it. This is particularly tricky with cryptocurrencies and password-protected accounts. Without proper authorization and credentials, assets may remain permanently out of reach.

To avoid leaving your loved ones on a digital scavenger hunt, consider the following:

• Create an inventory of your digital assets, including account names/numbers and where they are held. The inventory should provide instructions on how to access the asset, and include user names and passwords. The inventory should be updated on a regular basis and saved in a secure location. Then, you should let a trusted fiduciary or family member know where the inventory is located.
• Securely store access information, such as passwords or private keys, using a password manager or encrypted document.
• Name a trusted fiduciary who is comfortable navigating digital platforms.
• Consult with your estate planning attorney to include digital asset provisions in your estate planning documents.

Digital assets may seem intangible, but their value — financial and sentimental—is very real. Without thoughtful planning, they can easily become the modern equivalent of buried treasure that no one can find. With the right strategy, however, you can ensure your fiduciaries aren’t left guessing passwords or decoding crypto wallets like amateur detectives. In the end, estate planning in the digital age is about bringing clarity to the unknown — and ensuring your loved ones will be able to navigate the roadmap you thoughtfully left behind for them.  

‍