What Is Digital Estate Planning? Online Legacy Planning Explained

These days, a lot of our lives happen online. Whether it’s digital wallets or photos stored in the cloud, we’re all creating a digital legacy.

But what happens to all these digital accounts and files when we’re gone?

Traditional estate planning usually covers things like homes, bank accounts, and family heirlooms. But today, it’s important to include your digital assets in your legacy planning too.

This article explains what digital assets are, why they matter, and how you can add them to your estate plan.

What are digital assets?

Digital assets are anything you own or manage online. They can be personal, financial, or related to your business. Some common examples are:

• Personal assets: email accounts, photos in cloud storage, social media accounts

• Financial accounts: online bank accounts, cryptocurrency, PayPal, or Wise accounts

• Business assets: websites, domain names, online stores, advertising accounts

• Online purchases: music, videos, or non-fungible tokens (NFTs)

• Physical devices: laptop, tablet, smartphone, smartwatch, or household devices controlled remotely

• Intellectual property: software code, digital art, website, and social media content

• Loyalty points: for example, Tesco Clubcard or Nectar points

• Other accounts: airline miles, subscription services, cloud software tools

Some digital assets have financial value, while others, like family photos, are valuable for personal reasons. Either way, all of them should be protected.

What is a digital estate plan?

A digital estate plan usually includes:

• Listing your digital accounts and assets

• Choosing what should happen to each one

• Naming someone to manage them

• Adding these steps to your legal documents

With a digital estate plan, your loved ones can access or manage your accounts after you’re gone. This helps protect your digital life and makes sure your wishes are respected.

Why should you have a digital estate plan?

You use lots of passwords every day. Imagine how hard it would be for your family to log in without them. If you don’t have a digital estate plan, your family or executor could run into problems like:

• Legal issues: Many platforms have strict privacy rules and won’t share data unless a court orders it, even if your family has a death certificate.

• Lost value: Cryptocurrencies or online business income could be lost if no one can access your accounts.

• Lost memories: Losing access to meaningful photos or messages can be very upsetting.

• Security risks: Unattended accounts can be hacked or misused.

Including digital assets in your estate plan shows you care about your legacy and your loved ones.

How to create a digital estate plan

To make a digital estate plan, write down your digital assets (like emails, social media, and crypto), choose someone you trust to manage them, keep the details safe, and add clear instructions to your will.

Here’s a step-by-step checklist for your digital estate plan:

1. Make a list of your digital assets

Make a note of all your important digital accounts. Include:

• What the account is (like a Gmail account or Bitcoin wallet)

• How to access it (usernames, passwords, or recovery options)

• Whether it has financial or sentimental value

Keep this list in a safe place, such as a password manager or an encrypted file. Never put passwords in your will, since they could become public.

2. Decide what should happen to each account

Think about the future of each asset:

• Should the account be deleted or kept?

• Do you want someone to inherit it?

• Should any content (like photos or posts) be removed now or later?

Some platforms let you choose in advance. For example, Facebook allows you to set a "legacy contact", while Google has an “Inactive Account Manager”. Use these tools where possible.

3. Appoint a digital executor

A digital executor is a trusted person who will handle your digital assets after you pass away. This person might not be your main executor, especially if you know someone who is more comfortable with technology.

Give your digital executor clear instructions, and check if your country or region allows this role. In some places, you need to mention it in your will for it to be legally valid.

4. Update your legal documents

Speak with a lawyer or financial adviser about including your digital assets in your will. You might need to add a codicil, which is an official update to your will.

Be sure to:

• List who should have access to which accounts

• Reference this in your legal documents

Making a digital estate plan protects your accounts and gives your loved ones peace of mind.

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Special considerations for high-value digital assets

Cryptocurrency and NFTs

Cryptocurrencies like Bitcoin, Ethereum, and NFTs are treated as property, not currency. You can pass them on through your estate, but only if someone has access to them.

If your family doesn’t have your private keys or recovery phrases, they won’t be able to open your wallet or get the funds.

• Store this information securely (such as in a password manager or offline backup).

• Tell your executor where to find it.

• Save your transaction history for legal and tax purposes .

Online businesses

Do you earn money from YouTube, Etsy, or affiliate marketing? These are also digital assets and may continue to generate income after your death.

To protect them:

• Make a list of your online business platforms.

• Provide access details to a trusted person.

• Include instructions on how to manage or transfer ownership.

With good planning, your online income and brand can keep going and even help support your loved ones in the future.

Understanding the legal landscape

Laws around digital inheritance are still developing.

In the United States, most states use the RUFADAA law, which lets executors access digital assets under certain rules. The UK and EU are making progress, but local laws can be different.

Wherever you live, it’s smart to:

• Talk to a financial adviser or solicitor who understands digital estates

• Check if digital wills or electronic signatures are valid in your country

• Review the terms of service agreement of your main online platforms

Keeping it updated and secure

Your digital life changes often, so your plan should change with it.

Review your list of digital assets at least once a year. It’s also smart to update it whenever you open new accounts or buy digital property, like crypto or domain names.

Keep any updates stored safely and share them with your digital executor or include them in your legal documents. A little regular upkeep can really help protect your legacy.

Summary: what is digital estate planning?

Your digital life is an important part of your legacy.

Protect your online assets by adding them to your estate plan. Begin by making a list, choosing a digital executor, and getting legal advice.

Planning ahead protects your digital life and helps your loved ones in the future. Use secure tools like password managers, and never put passwords in your will.

Estate planning for digital assets can seem overwhelming, but you don’t have to handle it by yourself. Contact Holborn today for expert advice.