Digital Estate Planning: Protecting Your Online Accounts and Assets

Your Digital Life Is Part of Your Legacy

It’s hard to forget to leave your house to your loved one, but people often overlook their digital assets. Online accounts, data, social media accounts, and wallets need to be included in your estate plan so they are properly managed after death.

Let’s go over what digital assets are, why they matter, and how to include them in your estate plan to protect your legacy.

What Is Digital Estate Planning?

Digital estate planning is the process of organizing and securing access to your digital assets for your loved ones after you die. This includes everything stored online or on electronic devices. If you don’t have an estate plan for digital assets, your important data and accounts might be locked, lost, or exploited after you die.

Just like physical assets, digital assets need legal direction and protection through an estate plan.

What Counts as a Digital Asset?

Financial and Investment Accounts

A decade ago, it was still rare to see a merchant take online wallets, like Apple Pay. You’d still see people writing checks. Nowadays, a lot of people use online financial services.

Online banking, PayPal, Venmo, cryptocurrency wallets, NFTs, and investment platforms are all digital financial assets that can play a role in your estate planning.

Personal and Professional Data

Emails, cloud storage (Google Drive, Dropbox, iCloud), documents, photos, and videos can all be valuable digital assets. It is a good idea to have at least one separate backup for important assets, otherwise a single point of failure could lose you all your precious photos and videos of loved ones.

Social Media Accounts

Facebook, Instagram, LinkedIn, Twitter (X), TikTok, and other social media platforms all have their own unique memorialization or deletion policies. Make sure you are aware of how the death of an account owner can affect your social media account.

Digital Businesses and Domains

E-commerce stores, websites, blogs, domain names, and affiliate accounts can all fall under digital assets. Running a website isn’t cheap these days.

Subscriptions and Rewards Programs

Amazon Prime, Netflix, digital memberships, and other subscriptions are all digital assets.

Airline miles, credit card rewards, mall card rewards, and other programs can also provide significant value, so don’t forget about those.

Digital Property of Monetary Value

Online gaming assets, digital art, music, and e-books are digital properties that can have non-traditional but significant value. Many people buy e-books instead of paperbacks.

For example, loot in video games can be worth thousands of dollars. Skins, ranks, and other factors can increase the monetary value of a video game account.

Monetized YouTube channels can also be extremely valuable.

Why Digital Estate Planning Matters

Prevents Data Loss

Planning out your estate for digital matters is crucial because it ensures valuable information, photos, and digital assets aren’t lost forever.

Protects Privacy

Digital estate planning goes a long way in preventing identity theft, fraud, and misuse of accounts.

Reduces Family Stress

It can be stressful for loved ones to have to guess or recover your locked digital accounts. They may not be able to gain access even if they are related to you. If you have a digital estate plan, you can help your loved ones avoid a lot of stress.

Honors Your Wishes

Everyone has their own comfort levels and preferences regarding the privacy of their social media accounts. Giving your social media account essentially opens up all your message history to the beneficiary of the account. You may want to avoid giving the username and password directly to a loved one if you don’t want them gaining access to your entire message history.

You can choose what happens to social profiles and personal content. For example, you might want your accounts memorialized, or inherited by your children. You might want them deleted completely.

Avoids Legal and Financial Problems

Some assets can be permanently inaccessible without prior planning. No recovery possible. Cryptocurrency wallets and passwords are one of the most notorious risks if you don’t have a secure estate plan. You may have heard of lost crypto wallets with billions of dollars worth of Bitcoin–lost in the ether because the access methods were lost.

Step-by-Step: How to Create a Digital Estate Plan

1. Make a Complete Inventory of Digital Assets

The first step is to list all of your digital assets. Attach to them your account usernames, devices, and approximate value.

You should also list out your digital “debts”, such as auto-renewing subscriptions.

Use a secure password manager or encrypted spreadsheet for the passwords.

2. Decide What Should Happen to Each Asset

Do you want to keep, transfer, delete, or memorialize? For each digital asset, make your choice.

For example: Choose whether your Facebook account becomes a memorial or is deleted. Then independently from that, choose what happens to your Instagram account, YouTube account, TikTok account, and other accounts.

3. Choose a Digital Executor

It is ideal to pick someone tech-savvy and trustworthy who will follow your instructions regarding your digital assets.

However, note that not all states legally recognize “digital executors,” so confirm with an attorney if you are uncertain.

4. Provide Access Information

Key information for digital assets may include:

• Login usernames and passwords
• Security question and answers
• 2FA or MFA recovery codes
• Crypto keys

Always store these details using encrypted tools or physical vaults, never in plain text.

5. Include Digital Assets in Your Will or Trust

Specify who inherits digital property and grant legal permission to access accounts.

Online platforms like LegalZoom can help you create legally binding wills and trusts with digital clauses.

6. Add Authorization Language:

Reference the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) to ensure executors can legally access digital accounts. The RUFADAA is a law that provides the Executor of an Estate, or an attorney, with access to your online accounts in case of death or incapacitation.

7. Keep It Updated

Finally, make sure your digital asset estate plan is always updated. Review it every 2-4 years. After major changes, such as buying a new device or creating new accounts, ensure your details are all accurate.

How to Protect Cryptocurrency and Other High-Value Digital Assets

Crypto and NFTs are decentralized with no “forgot password” option. If you forget, the logins are gone and even life savings could be lost.

Best practices include:

• Using secure hardware wallets and sharing recovery instructions through your trust
• Never storing private keys in your will (it becomes public record during probate)
• Naming your trust as the owner of crypto assets for easier transfer

Pro tip: You can pair your plan with life insurance products, like Ethos, to provide liquidity for heirs managing crypto volatility or taxes. Consult with a financial expert for personalized advice.

Securing Your Online Presence

Social Media Accounts

Social media accounts usually let you set a legacy contact preference. For example, you can use Facebook’s legacy contact or Google’s Inactive Account Manager. If you pass away, your chosen legacy contact will receive access to your account.

Email Accounts

Provide guidance on which email accounts you want your loved ones to access, close, or preserve. This may be different for personal and business accounts.

Digital Subscriptions

Keep a list of your active subscriptions to prevent ongoing charges after death. This is particularly important if you have expensive auto-renewing subscriptions. This prevents loved ones from having to go through various channels to get refunds or cancellations for these active digital subscriptions.

Online Businesses or Domains

Ensure ownership details and login credentials are shared through your estate plan.

Common Mistakes to Avoid

Failing to list all login info

Be comprehensive about digital accounts and passwords. You may also need to list down security answers and linked authentication apps because many digital accounts require MFA.

Storing sensitive login info insecurely

Don’t store your login info using unsecure methods. Use trusted apps or storage systems.

Forgetting to include digital instructions in your will or trust

If you only provide usernames and passwords, but no other instructions, your beneficiaries and executors may be confused as to what to do with these digital assets.

Choosing an executor who isn’t tech-savvy

It’s fine to choose an executor who isn’t tech savvy for the rest of your assets, like real estate and cash. However, you might want to appoint a co-executor who can specifically focus on the digital assets.

Assuming loved ones can access accounts automatically

Unfortunately, loved ones usually cannot access your accounts automatically.

Legal and Practical Tools for Digital Estate Planning

LegalZoom

Our recommended tool for digital estate planning is LegalZoom. LegalZoom offers customizable will and trust templates that include digital asset management clauses, making estate planning affordable and convenient.

Ethos

Ethos provides affordable life insurance policies for digital entrepreneurs and creators to protect family income streams, such as YouTube channels.

Password Managers

1Password, Bitwarden, and LastPass are all commonly used for safe digital recordkeeping. However, there have been data leaks revealing passwords and security risks amongst digital password managers. Be sure to check up-to-date reviews on password managers.

Encrypted Storage

You can use cloud or offline tools for secure document and key storage. Make sure you have the keys and can pass them on to beneficiaries.

How Digital Estate Planning Fits Into a Complete Estate Plan

Digital estate planning involves digital asset management. Even if you mainly spend your life online, there are still other components of an estate plan that are needed. When planning your estate, you can blend your digital estate plan with your other documents, such as:

Will

Your will outlines who inherits digital and physical assets. It also goes over important choices like who will get guardianship of any minor children you have. After you pass away, your will goes through probate court, which is in public records.

Trust

A trust is an optional part of estate plans. It mainly lets you manage high-value or ongoing digital income sources in digital estate planning. You can create specialized trusts for better asset protection and management.

Power of Attorney

Signing a power of attorney grants an agent (AKA attorney-in-fact) authority to act on your behalf during incapacity. This agent can be specifically designated for digital access. For example, YouTubers might want to give their spouse digital power of attorney so if they get incapacitated, their spouse can login and interact with concerned fans. They can also still upkeep the YouTube account as an income stream.

Life Insurance

Life insurance payouts can provide valuable liquidity for digital business expenses. You can also leverage life insurance for reduced tax burdens, especially if you have a large estate. Unlike assets that get stuck in probate court, life insurance death benefits can give your beneficiaries immediate financial relief.

Goal: An estate plan featuring digital asset management helps create a holistic, future-ready plan that protects your identity, physical and digital assets, and loved ones.

Your Digital Legacy Deserves Protection Too

Digital estate planning is no longer optional with how important digital devices are to us. Almost everyone has digital assets, from online wallets to social media accounts. It could take an hour to list your online accounts and include them in your will or trust. That hour can save you and your loved ones serious trouble in the future.