Digital Assets and Estate Planning
Digital assets estate planning means giving the people who will act for you the legal authority, the information, and the technical means to reach your online accounts and digital property when you die or lose capacity. Without all three, your executor or agent can be locked out of email, photos, cloud files, online banking, and cryptocurrency, sometimes permanently.
Nearly everyone now holds a meaningful part of their life online. Some of it has financial value: brokerage logins, payment-app balances, crypto wallets, domain names, and online businesses. Some of it has sentimental value no court order can recreate, such as family photographs stored only in the cloud.
Milvidskiy Law Group P.C. builds digital asset provisions into wills, trusts, and powers of attorney, and helps you create an inventory and access plan to go with them. Our attorneys practice in New York, New Jersey, and Connecticut.
Key Takeaways:
- New York, New Jersey, and Connecticut have each adopted a version of the Revised Uniform Fiduciary Access to Digital Assets Act, which lets your executor, trustee, agent, or guardian access digital assets only if your documents or an online tool authorize it.
- A will or trust that is silent on digital assets usually leaves your fiduciary with access to a catalogue of your communications but not their content, and custodians can refuse anything more.
- Passwords, private keys, and seed phrases never belong in the will itself, because a probated will becomes a public record. Store credentials in a password manager with emergency access and tell your fiduciary where the plan lives.
What Counts as a Digital Asset, and Why It Matters
A digital asset is generally any electronic record in which you have a right or interest. The category is broader than most people expect.
Common digital assets
- Email accounts, cloud storage, backups, and photo and video libraries
- Social media profiles and messaging apps
- Domain names, websites, blogs, and online businesses or storefronts
- Online banking, brokerage, and retirement account logins, and payment-app balances
- Cryptocurrency, tokens, and NFTs held on exchanges or in self-custodied wallets
- Airline miles and other loyalty rewards
- Purchased digital media libraries, software licenses, and subscription services that keep billing until someone cancels them
Why digital assets fail at death or incapacity
A bank sees a death certificate and letters testamentary and cooperates. Digital assets break that process in several ways. Terms of service often say the account is personal, non-transferable, and terminates at death. Passwords and two-factor codes sit on a phone no one can unlock. Federal and state laws on unauthorized computer access and the privacy of stored communications make it risky for a family member to log in with a guessed password, even with good intentions. And cryptocurrency in a self-custodied wallet is not recoverable by anyone if the private key or seed phrase dies with you.
The Legal Framework: RUFADAA in New York, New Jersey, and Connecticut
All three states have adopted legislation based on the Revised Uniform Fiduciary Access to Digital Assets Act, commonly called RUFADAA. New York enacted it as an article of its Estates, Powers and Trusts Law titled Administration of Digital Assets. New Jersey enacted its Uniform Fiduciary Access to Digital Assets Act in 2017. Connecticut enacted the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act effective in 2016. Details vary by state.
The three-tier priority
RUFADAA sets a clear order for deciding whether a fiduciary may see your digital assets:
- First, the custodian’s online tool. If a provider lets you name someone to receive your data or direct that the account be deleted, and you use it, that setting overrides anything contrary in your will or trust.
- Second, your estate planning documents. If you did not use an online tool, your will, trust, power of attorney, or other record decides whether disclosure is allowed or prohibited.
- Third, the terms of service. Only if you gave no direction in either place does the provider’s user agreement govern.
An online legacy setting that names one child and a trust that names another creates a conflict, and the online setting wins.
Catalogue versus content
RUFADAA draws a sharp line between the catalogue of your electronic communications and their content. The catalogue is the metadata: who you corresponded with, when, and at what address. Content is the substance of the messages themselves.
A fiduciary with general authority can usually obtain the catalogue and most other digital assets unless you prohibited it. A custodian may disclose content only if you expressly consented, through the provider’s online tool or in your will, trust, power of attorney, or similar record, or if a court orders it. If your documents are silent, your executor may learn that you emailed your accountant but cannot read what you said.
Drafting Digital-Asset Authority Into Your Documents
The single most effective step is express language in each core document.
Wills
Your will should grant the executor authority over digital assets and expressly consent to disclosure of the content of electronic communications. It can name a separate digital executor and direct what happens to specific categories, such as archiving photographs while deleting social media accounts.
Trusts
A revocable living trust can hold digital property with value, such as domain names and cryptocurrency, and give the trustee the same express consent. Because a trust operates during incapacity as well as after death, it covers a gap a will alone leaves open. Our living trust planning routinely includes digital asset schedules for this reason.
Powers of attorney
A power of attorney should specifically authorize the agent to access, manage, and direct disclosure of digital assets and the content of communications during your lifetime. A custodian may not read general financial authority that broadly. Whether you choose an immediately effective power of attorney or a springing power of attorney that takes effect only on incapacity, the digital asset grant should be explicit.
Your Digital Asset Inventory and Secure Credential Storage
Legal authority solves half the problem. Your fiduciary still needs to know what exists and how to reach it. A digital asset inventory lists each account, the provider, the type of asset, its approximate value or importance, and your instructions for it. It does not contain passwords; it tells the fiduciary where the credentials are.
- Never in the will. A probated will becomes part of the public court file. Any password or key written in it is exposed to anyone who requests the record.
- A reputable password manager with emergency access. Most major password managers let you designate a trusted contact who can request access after a waiting period you set.
- A sealed letter of instruction. A short letter held by your attorney can tell your fiduciary how to reach the password manager.
- Two-factor authentication planning. If codes go to your phone, your fiduciary needs a way to unlock it or a backup method.
Cryptocurrency, Online Businesses, and Other High-Value Digital Property
Cryptocurrency and NFTs
Cryptocurrency held on an exchange is an account, and RUFADAA and your documents can reach it. Cryptocurrency in a self-custodied wallet is controlled by whoever holds the private key or seed phrase. No court order can recover it. If the key is lost, the asset is gone.
A crypto plan therefore focuses on custody. Hardware wallets and seed phrases need documented, secure storage your fiduciary can find and use. Name a trustee or executor who understands, or can hire someone who understands, how to take control of a wallet without exposing the keys.
Valuation and tax basis are estate administration issues. Crypto prices move constantly, and your fiduciary must document date-of-death values and transaction history for estate tax and income tax purposes. Our probate and estate administration attorneys handle these reporting questions, and our estate and tax planning work addresses basis and transfer planning while you are living.
Domains, websites, and online businesses
A domain name, an e-commerce store, a monetized channel, or a software product is a business asset, not just an account. It has revenue, customers, contracts, and a hosting provider and payment processor that will not talk to your family without authority. These assets belong in your business succession plan, with a successor who can keep the business running while ownership transfers.
What Fiduciaries Can and Cannot Do
Under RUFADAA, a fiduciary with authority over digital assets has the same duties of care, loyalty, and confidentiality that apply to tangible property. That authority is not unlimited.
- A fiduciary can request a catalogue of communications and other digital assets from a custodian, and content when your documents or online tool consent to it.
- A fiduciary must act within the scope you granted and cannot impersonate you or use your credentials for things you did not authorize.
- A fiduciary has a duty to marshal and preserve digital assets with value and may be accountable for waste, including a crypto balance left on a failing exchange.
Serving as executor of a digital-heavy estate is technical work. Families who prefer not to burden a relative sometimes name a professional, and Milvidskiy Law Group P.C. offers professional executor services where that makes sense.
Limits of digital asset planning
Planning helps, but it cannot fix everything. If a custodian is outside the United States, RUFADAA may not bind it. If your online legacy settings contradict your will, the online setting controls, even if it is out of date. Digital asset planning is only as good as its maintenance, which is why we fold it into ongoing plan reviews through our Client Care Program.
What Our Digital Asset Planning Service Includes
Digital asset planning is part of a complete estate plan, not a separate product. When we build or update your plan, our work includes:
- Digital asset authority and content-disclosure consent drafted into your will, trust, and power of attorney
- A digital asset inventory template and guidance on completing it without exposing credentials
- Advice on using each major provider’s online legacy or inactive-account tool so it agrees with your documents
- A custody plan for cryptocurrency, and coordination of domains and online businesses with your business succession documents
- A letter of instruction for your fiduciary and periodic review as accounts, providers, and laws change
Schedule a Digital Asset Planning Consultation
If your will, trust, or power of attorney says nothing about digital assets, or was signed before you owned cryptocurrency or built an online business, it is time to update it. Our attorneys can review your documents, identify the gaps, and draft the provisions and inventory your fiduciaries will need. Contact Milvidskiy Law Group P.C. to schedule a consultation.
This page is provided for general informational purposes only and does not constitute legal advice. Laws differ by state and change over time. For advice about your situation, consult a qualified attorney.
Frequently Asked Questions
What is a digital asset in estate planning?
A digital asset is generally any electronic record in which you have a right or interest. That includes email, cloud storage, photos, social media, domain names, online business accounts, loyalty points, online banking and brokerage logins, payment apps, and cryptocurrency. The underlying money in a bank account is not itself a digital asset, but the online access to it is.
Can my executor access my email after I die?
Only with the right authority. Under the digital asset laws adopted in New York, New Jersey, and Connecticut, an executor can usually obtain a catalogue of your communications, meaning who you wrote to and when. The content of the messages is disclosed only if you consented through the provider’s online tool or expressly in your will or other record, or if a court orders it.
Should I put my passwords in my will?
No. A will that is probated becomes part of the public court file, so any password or private key written in it is exposed. Keep credentials in a password manager with an emergency-access feature, and use your will and a separate letter of instruction to tell your executor where to find them.
What is RUFADAA?
RUFADAA is the Revised Uniform Fiduciary Access to Digital Assets Act, a model law that New York, New Jersey, and Connecticut have each adopted in their own form. It sets out when a custodian such as an email or social media provider must disclose a user’s digital assets to an executor, trustee, agent under a power of attorney, or guardian, and it gives priority to the user’s own directions over the provider’s terms of service.
What happens to cryptocurrency when someone dies?
If the crypto is on an exchange, it is an account and can be reached with proper legal authority. If it is in a self-custodied wallet, whoever holds the private key or seed phrase controls it, and no court order can recover it if the key is lost. A crypto plan documents where keys and hardware wallets are stored and names a fiduciary who can take control securely.
Does a power of attorney cover digital assets?
Not reliably unless it says so. Custodians often refuse to accept general financial authority as consent to disclose digital assets or the content of communications. A power of attorney should expressly grant the agent authority over digital assets and consent to disclosure of content, whether the document is effective immediately or springs into effect on incapacity.
Do online legacy contact settings override my will?
Yes. Under RUFADAA, a direction you give through a provider’s online tool controls over a contrary direction in your will, trust, or power of attorney. That makes it important to keep those settings consistent with your documents and to update both when your plans change.
What happens to social media accounts when someone dies?
It depends on the provider’s policies and any direction you gave. Some platforms allow an account to be memorialized, transferred to a designated contact, or deleted at the request of a verified fiduciary or family member. Your will or trust can state what you want done, and an express grant of authority helps your fiduciary carry it out.
Who should I name as my digital executor?
Someone organized, trustworthy, and comfortable with technology, or someone who is willing to hire help. You can name a separate digital executor in your will or give your regular executor express authority and the power to retain a consultant. For estates with significant cryptocurrency or an online business, a professional fiduciary may be appropriate.
Are digital assets subject to probate and estate tax?
Digital assets with value, such as cryptocurrency, domain names, and online businesses, are part of your estate like any other property. They may pass through probate unless held in a trust or otherwise arranged to transfer outside it, and their date-of-death value counts toward any estate tax that applies. Your fiduciary must document values and transaction history for tax reporting.
