There is a growing category of assets that many California estate plans completely ignore. And ignoring them doesn't just mean your heirs miss out on some sentimental photos. It can mean they never get access to real money.
We're talking about digital assets.
More than you'd think. On the financial side: cryptocurrency (Bitcoin, Ethereum, and others), online brokerage accounts, online bank accounts, PayPal and Venmo balances, rewards points and airline miles, domain names, and websites that generate income.
On the non-financial side: email accounts, social media accounts, digital photo libraries, cloud storage, subscription services, and content accounts: YouTube channels, for example, that may have real monetary value attached to them.
Some of these have significant financial value. Some have only sentimental value. All of them require some intentional planning to handle correctly in your estate.
Traditional financial accounts, such as online brokerages, bank accounts, PayPal, can be accessed by your successor trustee or executor with proper legal documentation. A death certificate, a Certification of Trust, some paperwork. The institution has a process for this. It's not always smooth, but there's a path.
Cryptocurrency doesn't work that way. There is no customer service.
If you hold cryptocurrency in a private wallet, as opposed to keeping it on an exchange like Coinbase, access requires either your private key or your seed phrase. Your seed phrase is the 12 or 24-word recovery phrase generated when you set up the wallet. Without one of those, the cryptocurrency is gone. Permanently. There is no password reset. There is no "I forgot my key" process. The blockchain doesn't care that you've died and your family needs access.
Billions of dollars in cryptocurrency have been permanently lost because the owner died without leaving access information for their heirs. One widely cited estimate puts permanently lost Bitcoin at roughly 20% of all Bitcoin in existence.
If you own cryptocurrency of any meaningful value, your estate plan needs to address this directly.
California has adopted the Revised Uniform Fiduciary Access to Digital Assets Act. It gives your successor trustee and executor legal authority to access your digital assets if your estate planning documents grant that authority.
This matters. Simply having a living trust is not enough. The trust document needs language specifically authorizing your fiduciaries to access, manage, and distribute digital assets. Without that language, even a well-meaning successor trustee may face legal barriers when trying to access your accounts.
We include digital asset provisions in our living trusts. And for clients who own cryptocurrency, we are in the process of rolling out a more comprehensive authorization that addresses the unique challenges cryptocurrency presents.
Legal authority is only half the battle. Your successor trustee also needs to know what digital assets exist and how to access them.
For cryptocurrency: the location of any wallets, the exchange accounts (Coinbase, Kraken, Gemini, etc.), the seed phrases and private keys, and any two-factor authentication methods linked to the accounts.
For hardware wallets, your heirs need both the physical device and the PIN or seed phrase. One without the other is useless. Both need to be findable.
For online accounts generally: usernames, passwords, the email address associated with each account, and any two-factor authentication apps or devices.
This information needs to be kept current. I t's not a one-time exercise. And it needs to be kept secure while also being findable by the right person at the right time. That's a harder problem than it sounds.
Here's what not to do: don't put private keys, seed phrases, or passwords in your Will. Your Will goes through probate and becomes a public document. Anything in your Will is visible to anyone who looks.
Better options:
A password manager (1Password, Bitwarden, Dashlane) that your successor trustee can access with a master password stored securely elsewhere.
A fireproof safe at home with a printed document containing the key access information.
A safe deposit box at your bank.
Or a combination of these.
The goal is that when your successor trustee needs to access your digital assets, the information they need is findable, current, and secure from everyone who shouldn't have it while you're alive.
We've written about Hand-Off Instructions, a document that consolidates exactly this kind of information for your successor trustee and family. It's one of the most practical things you can do for your heirs, digital assets or not.
If your cryptocurrency is held on an exchange: Coinbase, Kraken, Gemini, or similar, the situation is closer to a traditional brokerage account. The exchange has a process for estate claims. Your executor or successor trustee can present legal documentation and work through it.
This is meaningfully simpler than self-custodied cryptocurrency. But it comes with its own risk: if the exchange fails, as FTX did dramatically in 2022, your assets can be at risk. The crypto community's maxim exists for a reason: not your keys, not your coins.
The planning approach depends on how your crypto is actually held. Make sure your estate plan reflects the real situation, not the situation you intended.
Not every digital asset is about money. Email archives are often invaluable for estate administration. Contracts, financial statements, and important communications live in email. Social media accounts contain photos and messages that can matter enormously to your family.
Several major platforms have their own features worth setting up now:
Facebook lets you designate a Legacy Contact who can manage your account after you die, or you can set the account to be deleted.
Google's Inactive Account Manager lets you designate people to receive your data after a period of inactivity.
Apple's Digital Legacy program lets you add Digital Legacy Contacts who can request access to your Apple ID data after your death.
These are worth setting up regardless of your formal estate plan. They're free, take about ten minutes, and ensure your wishes are followed on each platform.
The legal pieces, including authority for your trustee and proper authorization language, go in your estate planning documents.
The practical pieces, including access information, account inventory, seed phrases, and instructions, go in your Hand-Off Instructions or an equivalent secure document.
The platform-level designations go directly on each platform.
These three layers work together. None of them alone is sufficient.
Digital assets are real assets. The law is catching up, but the practical challenge of access remains entirely on you to solve. If you have cryptocurrency, online financial accounts, or any digital asset of value and your estate plan doesn't address them, that's a gap worth fixing.
It's not a complicated conversation — but it is an important one. If you'd like to talk through how your digital assets fit into your plan, a free intro call is a good place to start.
Schedule a free intro call at clarkallison.com or call us at (800) 394-1988.
Give us a call at (800) 394-1988 or click Get Started below to reach out. We'd love to help you figure out the right planning strategies for your situation.
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