As more of our wealth moves online, estate planning has had to evolve. Today, many people hold significant value in digital assets like cryptocurrency, NFTs, and online accounts. Yet few realize that without a plan, these assets can easily be lost forever.
At Stone & Sallus, our estate planning attorneys help clients protect both traditional and digital wealth. Understanding how to manage these assets through a trust is key to preserving their value and ensuring they are passed down safely to future generations.
What Are Digital Assets?
Digital assets include any form of property stored or accessed online. These may range from investment-based holdings to personal digital files. Common examples include:
- Cryptocurrency: Bitcoin, Ethereum, and other tokens held in digital wallets.
- NFTs (Non-Fungible Tokens): Digital collectibles or artwork stored on blockchain technology.
- Online Financial Accounts: PayPal, Venmo, or brokerage accounts.
- Personal Digital Property: Photos, cloud documents, and social media accounts.
Each type presents its own legal and practical challenges when it comes to ownership, transfer, and access.
The Rapid Growth of Digital Wealth
Digital assets are no longer niche investments. Today, millions of Americans own cryptocurrency, and NFT transactions worldwide are still reaching billions. These new types of property are helping younger people diversify their holdings.
However, if digital assets are not adequately documented, they may disappear instantly because they frequently call for special secret keys or access credentials. Families may lose access to substantial chunks of an estate if there is no clear plan.
Why Managing Digital Assets Is Critical in Estate Planning
Traditional wills and trusts were not designed for assets that live online. Without the right language or legal structure, your digital property may not be properly transferred or even recognized after your death.
Key risks include:
- Heirs may be unable to access crypto wallets or digital exchanges.
- Passwords and recovery keys might be lost or destroyed.
- Online accounts could remain dormant or permanently locked.
- Valuable NFTs or digital collections may not be included in your estate inventory.
Managing digital assets as part of your estate plan ensures that your online wealth is protected, accessible, and distributed according to your wishes.
Protecting Digital Assets Through a Trust
Creating a trust that includes digital assets provides a secure and organized way to preserve your online wealth. A digital asset trust:
- Names a trustee who can access your digital property according to your instructions.
- Lists all relevant digital accounts, wallets, and files within the trust documents.
- Ensures compliance with data protection and privacy laws.
- Keeps sensitive information private and out of public probate records.
By including crypto and NFTs in a trust, you safeguard them from loss, theft, or inaccessibility and give your loved ones a clear roadmap for managing them.
How to Incorporate Digital Assets into Your Estate Plan
To ensure your digital assets are fully protected, take the following steps:
1. Update Your Plan Regularly: Digital portfolios evolve quickly. Review your plan often to ensure it reflects your current assets and access information.
2. Create a Complete Inventory: List all digital holdings, including exchange accounts, crypto wallets, and any valuable online accounts.
3. Document Access Information Securely: Store private keys, passwords, and recovery phrases in a safe location accessible only to your trustee.
4. Work with an Estate Planning Attorney: An experienced attorney can draft trust documents that comply with California and federal laws while addressing the unique nature of digital assets.
Common Mistakes to Avoid
When managing digital wealth, avoid these common errors:
- Failing to disclose digital assets to your estate planning attorney.
- Keeping all access information in one unsecured location.
- Using outdated estate planning templates that do not mention digital property.
- Ignoring assets stored in international or offshore digital accounts.
The Role of a Digital Trustee
A “digital trustee” or “digital executor” plays a crucial role in managing and transferring your online assets. This person should be both legally authorized and technologically capable of accessing your digital holdings. Their duties may include securing crypto wallets, liquidating digital investments, or transferring NFTs to designated beneficiaries. Choosing the right digital trustee can prevent unnecessary loss and protect your estate’s value.
How Stone & Sallus Helps Protect Digital Wealth
At Stone & Sallus, we understand that your digital assets are just as important as your traditional investments. Our attorneys help clients integrate crypto, NFTs, and other online property into their estate plans with care and precision.
We offer guidance on:
- Drafting trusts that protect digital and physical assets.
- Appointing trustworthy digital executors.
- Structuring estate plans that reduce taxes and protect privacy.
Whether you’re new to digital investing or managing a substantial portfolio, our team can help ensure your estate plan keeps pace with today’s digital world.
Future-Proofing Your Estate Plan
Digital assets are now a permanent part of modern wealth. Planning ahead protects these valuable holdings from being lost, overlooked, or mishandled. By creating a trust that includes your digital property, you ensure that your family and beneficiaries receive the full value of your legacy.
If you own cryptocurrency, NFTs, or other online assets, it’s time to make them part of your estate plan. Contact Stone & Sallus today to learn how we can help you protect your wealth for the future.
Frequently Asked Questions
What happens to my cryptocurrency if I die without a trust?
If no one has access to your wallet or private keys, your crypto may become permanently inaccessible and lost.
Can NFTs be transferred through a trust?
Yes. NFTs can be included in a trust just like other assets, provided ownership details and access credentials are clearly documented.
How do I give my executor access to my crypto wallets securely?
You can store your wallet keys or passwords in a secure file, vault, or encrypted document accessible only by your designated trustee.
Are digital assets subject to estate taxes?
Yes. The IRS views cryptocurrency and NFTs as property, meaning they may be subject to standard estate tax rules.
What is a digital trustee and why do I need one?
A digital trustee manages your online accounts, wallets, and digital property after your passing to ensure they are properly transferred and protected.
