We often think of estate planning in terms of physical property: the house, the car, the jewelry, and the savings account at the local bank branch. But as our lives migrate online, a massive portion of our wealth and memories is becoming invisible.
Recent data reveals that 28% of U.S. adults, nearly 65 million people, now own cryptocurrency, a figure that has nearly doubled since 2021.
Yet, “digital assets” go far beyond Bitcoin. They include your photos, your emails, your frequent flyer miles, and even your online business accounts. Without a well-rounded inventory, these assets can often disappear into the digital void, inaccessible to your heirs and legally frozen by Terms of Service agreements.
At Elder Law Guidance, we believe that a modern estate plan must be as comprehensive online as it is offline. This guide will walk you through the critical process of identifying your digital footprint and creating an inventory that makes sure your legacy survives.
Understanding Your Digital Assets
The first step in protecting your assets is realizing just how much you actually own. The definition of a “digital asset” has expanded rapidly. It is no longer just about sentimental value, it is about significant financial value.
Global markets are shifting. The cryptocurrency market cap has exceeded $4 trillion, and major corporations have tripled their digital asset treasuries to $150 billion in just the last year. This institutional shift trickles down to personal finance. If you have an investment portfolio, the odds are increasing that a portion of it is tokenized or digital.
However, because these assets don’t generate paper statements, they are the first to be overlooked during estate administration.
Defining the Four Pillars of Your Digital Estate
To create a functional inventory, it helps to categorize your digital life into four distinct pillars.
1. Financial Digital Assets
These are assets with direct monetary value. They are the most vital to secure to avoid financial loss for your heirs.
- Cryptocurrency: Bitcoin, Ethereum, and other tokens held in exchanges (like Coinbase) or hardware wallets.
- Online Banking: Accounts that exist purely online (e.g., PayPal, Venmo, Chime).
- NFTs (Non-Fungible Tokens): Digital art or collectibles.
- Betting Accounts: Balances in online sportsbooks or poker sites.
2. Social and Sentimental Assets
These hold the story of your life. While they may not have a price tag, their loss can be devastating to a grieving family.
- Social Media: Facebook, LinkedIn, X (Twitter), Instagram.
- Email Accounts: Gmail, Outlook (often the “key” to resetting passwords for all other accounts).
- Cloud Storage: Google Photos, iCloud, Dropbox, where family memories are stored.
3. Business and Intellectual Property
If you run a side hustle or a business, these assets are vital for continuity or sale.
- Domain Names: A valuable web address can be worth thousands.
- Seller Accounts: Amazon FBA, Etsy, eBay storefronts with active balances.
- Copyrighted Material: eBooks, digital courses, or photography portfolios.
4. The “Loyalty Economy”
Often ignored, these assets can hold significant accumulated value.
- Travel Rewards: Airline miles and hotel points (many are transferable upon death if the airline is notified correctly).
- Cash Back Rewards: Credit card points or shopping portals (Rakuten).
The 7 Most Overlooked Asset Categories
When building your list, pay special attention to these “invisible” assets:
- Domain Names: These require annual renewal. If your credit card expires and the auto-renew fails, the domain drops and can be snatched up by strangers immediately.
- Affiliate Income Accounts: If you are a creator, you may have passive income sitting in affiliate dashboards (Amazon Associates, ShareASale) that will vanish if not claimed.
- Gaming Assets: Modern video game accounts (Steam, PlayStation Network, Blizzard) can hold hundreds or thousands of dollars in purchased content.
- Subscription Services: While these are liabilities (costs), your executor needs to know about them to shut them down and stop the drain on the estate’s cash flow.
- Digital Wallets (Hardware): A physical USB stick (like a Ledger or Trezor) might look like junk to a non-tech-savvy relative. They need to know not to throw it away.
- Medical Portals: These contain critical health history that may be needed for insurance claims or family medical history tracking.
- Tokenized Real World Assets: As we see a rise in the tokenization of real estate and art, your “physical” investments may actually be controlled by a digital key.
How to Create and Secure Your Inventory
Building this inventory is a delicate balance. You need to provide access to your trusted representatives without exposing yourself to hackers.
Step 1: The Digital Audit
Spend one week tracking your digital habits. Every time you log into a service, write it down. Check your password manager (LastPass, 1Password, or Google Password Manager) and export the list of sites you have accounts with. This is usually the fastest way to get a 90% complete list.
Step 2: Documentation (The “What” and “Where”)
For every asset, record:
- The Asset Name: (e.g., Coinbase Account)
- The URL/Access Point: (e.g., coinbase.com or “App on phone”)
- The Username/ID
- The 2FA Method: Does it require a text message? An authenticator app? A YubiKey?
Note: Do not put your passwords directly into your Last Will and Testament. Your Will becomes a public record once it goes through probate. If you list your passwords there, you are publishing them to the world.
Step 3: Secure Storage
Instead of putting passwords in the Will, use a “memorandum” or a separate digital inventory document referenced in your estate plan.
- Low-Tech: A physical notebook stored in a fireproof safe or safety deposit box.
- High-Tech: A password manager where the “Master Password” is the only thing your executor needs to access everything else.
Step 4: Legal Authorization
This is where many plans fail. You can leave a list of passwords, but if you don’t grant legal authority, your executor may be breaking the law by logging in.
Most states, including Kentucky, have adopted versions of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This law creates a hierarchy of consent. It essentially asks: “Did the user explicitly grant access to a digital fiduciary?”
If you do not explicitly say “Yes” in your legal documents or through the service’s “legacy contact” tool (like on Facebook or Apple), the Terms of Service usually default to “No.” This means your account stays locked.
This is why kentucky estate planning must now include specific language granting your executor the right to access, manage, and distribute digital assets.
Securing Your Digital Legacy
Inventorying your digital assets about preserving the narrative of your life and allowing for the smooth transfer of wealth to the next generation. It prevents your family from having to guess, hack, or litigate to access what is rightfully theirs.
By creating a comprehensive inventory and pairing it with a legally sound estate plan, you provide your loved ones with the ultimate gift: clarity during a difficult time.
If you are ready to make sure your digital and physical estates are fully protected, or if you want to learn how to avoid probate in kentucky for these assets, our team is here to guide you through every step of the process.
