Digital Assets and Estate Planning in New York

In today’s digital age, your estate likely includes far more than physical assets and traditional financial accounts. You probably have email accounts, social media profiles, online banking, cryptocurrency, digital photos, domain names, and countless other digital assets. Yet most estate plans completely overlook these digital holdings, leaving executors and family members confused about what exists, how to access it, and what happens to it after death.

New York has modernized its approach to digital assets by adopting the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), codified in New York’s Estates, Powers and Trusts Law (EPTL) Article 13-A. This law gives you tools to plan for digital assets and authorizes your fiduciaries to manage them after your death. Understanding digital asset planning is now an essential part of comprehensive estate planning.

What Are Digital Assets?

Digital assets are all electronically stored information or accounts to which you have rights or interests. These include:

Email and Communications

• Email accounts (Gmail, Outlook, Yahoo, etc.)
• Text messages and messaging apps (WhatsApp, iMessage, Signal, etc.)
• Voicemail accounts
• Discussion forums or message board accounts

Social Media and Online Presence

• Facebook, Instagram, Twitter, LinkedIn, TikTok, and similar accounts
• Blogs or personal websites
• Online community memberships
• Gaming accounts with virtual assets

Financial and Banking

• Online banking accounts
• Cryptocurrency and digital wallets
• PayPal and other payment services
• Investment accounts and brokerage platforms
• Digital payment apps (Venmo, Square Cash, etc.)

Personal Data and Documents

• Cloud storage (Google Drive, Dropbox, iCloud, OneDrive, etc.)
• Digital photos and videos
• E-books and digital publications
• Online medical and health records
• Financial and tax records stored online

Business and Intellectual Property

• Domain names and websites
• Online businesses and e-commerce accounts
• Digital royalties or subscriptions
• Software licenses
• Intellectual property rights

Other Digital Assets

• Online utilities and subscription services
• Frequent flyer miles and loyalty programs
• Digital artwork and NFTs
• Online databases or research materials

Why Digital Assets Matter for Estate Planning

Most people underestimate the importance of digital assets in their overall estate. However, digital assets raise several critical planning concerns:

Financial Value Some digital assets have direct financial value. Cryptocurrency holdings, online business accounts, digital payment systems, and domain names may represent substantial assets. Your estate executor needs to know these exist and how to access and liquidate them if appropriate.

Personal and Sentimental Value Digital photographs, videos, emails, and documents often have irreplaceable sentimental value. Family members may want to preserve these memories after you pass. Without proper planning, these assets may be lost forever.

Accounts with Ongoing Obligations Some digital accounts have subscription fees, payments due, or ongoing financial obligations. Your executor needs to be able to access and manage these to avoid late fees, unnecessary charges, or breach of contract.

Identity and Privacy Concerns Your digital accounts contain sensitive personal and financial information. Without proper instructions, these accounts could be compromised or left accessible to unauthorized parties. Proper planning protects your privacy and your family’s security.

Terms of Service and Legal Issues Many digital service providers have terms of service that restrict access and transfer of accounts. New York’s RUFADAA law addresses these conflicts by giving your fiduciaries certain legal rights to access and manage digital assets despite terms-of-service restrictions.

New York’s RUFADAA (EPTL Article 13-A)

New York adopted the Revised Uniform Fiduciary Access to Digital Assets Act by adding Article 13-A to the Estates, Powers and Trusts Law. This law modernizes New York estate law to address digital assets and gives you important planning options.

Key Provisions of EPTL 13-A

Definition of Digital Assets Under EPTL 13-A-101, a “digital asset” is defined as a record maintained in an electronic form by a custodian. This includes email accounts, social media accounts, cryptocurrency wallets, online financial accounts, and virtually any information you maintain electronically through a third-party provider.

Definition of Fiduciaries Your executor, trustee, agent under a power of attorney, or guardian appointed under New York law are all considered “fiduciaries” under RUFADAA. This means they have certain legal rights to access and manage your digital assets.

Authorization for Fiduciary Access Under EPTL 13-A-201, a custodian (the company or provider holding your digital asset) must grant a fiduciary access to digital assets that are part of your estate or trust. The fiduciary can request access in two ways:

1. By presenting a copy of your will, trust document, or power of attorney showing the fiduciary’s authority
2. By providing a court order authorizing access

Terms-of-Service Override EPTL 13-A-204 provides that a terms-of-service provision attempting to restrict a fiduciary’s access to a digital asset is unenforceable. This is crucial because many digital service providers have terms that attempt to block access to accounts after death. Your executor and other fiduciaries now have explicit legal authority to access these assets despite such restrictions.

However, this protection has limits. The custodian may still require reasonable identification of the fiduciary and may require certain procedures before granting access.

Intent Manifested in Writing Your instructions regarding digital assets are given special protection if you manifest your intent in writing. Under EPTL 13-A-401, if you provide written instructions (in your will, trust, power of attorney, or separate document) about how to handle your digital assets, fiduciaries must follow those instructions.

If you do not provide instructions, fiduciaries have authority to manage digital assets as they deem appropriate, subject to their fiduciary duties.

Types of Digital Assets and Planning Considerations

Email Accounts

Your email account is often the gateway to all other digital accounts. Email contains financial records, account statements, password recovery information, and communications about your affairs.

Plan for your email by:

• Listing your email addresses (you may have multiple)
• Specifying whether your executor should preserve, delete, or transfer the account
• Providing access instructions in a secure manner (not in your will, which becomes public record)
• Considering that some email providers have specific procedures for deceased account holders

Social Media Accounts

Facebook, Instagram, Twitter, and LinkedIn accounts may contain valuable digital memories and important professional information. New York law recognizes that you have the right to plan for these accounts.

Options for social media:

• Memorialize or delete the account after death
• Allow family members to maintain the account
• Request that the platform restrict the account to serve as a memorial
• Transfer content to your family

Different platforms have different policies. Facebook allows family members to request memorialization or deletion. Other platforms have varying procedures. Document your wishes in your estate plan.

Cryptocurrency and Digital Wallets

Cryptocurrency holdings represent a unique planning challenge. Unlike traditional financial accounts, cryptocurrency is often held in digital wallets that are not connected to a custodian in the traditional sense.

Critical planning steps for cryptocurrency:

• Document all cryptocurrency holdings and the platforms where they are held
• Provide secure access information to your executor (written instructions, password manager, safe deposit box, etc.)
• Specify your wishes: should the cryptocurrency be liquidated, transferred, or held long-term?
• Be aware that some cryptocurrency exchanges have terms of service that may complicate access
• Consider the tax implications of transferring or liquidating cryptocurrency

Online Financial Accounts and Banking

You likely have accounts with multiple banks, investment firms, and financial institutions online. These accounts are custodian-held assets, making them more straightforward than some digital assets.

Plan for online accounts by:

• Maintaining a current list of all online financial accounts
• Ensuring your executor can access these accounts through the financial institution’s procedures
• Designating beneficiaries where available (retirement accounts, payable-on-death accounts, etc.)
• Coordinating digital financial assets with your overall estate plan

Cloud Storage and Digital Documents

Cloud storage services (Google Drive, Dropbox, iCloud, OneDrive) often contain important documents, financial records, insurance information, and personal files. These are critical for estate administration and family recordkeeping.

Address cloud storage in your plan:

• Maintain a list of all cloud storage accounts and access information
• Document what important information is stored in each account
• Instruct your executor on how to access and preserve critical documents
• Specify whether photos, videos, and personal files should be preserved for family
• Consider designating someone to manage sentimental digital content

Fiduciary Access to Digital Assets

EPTL 13-A gives your fiduciaries the legal right to access and manage your digital assets, but they must follow proper procedures.

Access Procedures

To access a digital asset, your fiduciary should:

1. Determine which institution (custodian) holds the digital asset
2. Request access by presenting either the will/trust document showing the fiduciary’s authority or a court order
3. Provide reasonable identification as requested by the custodian
4. Follow any additional procedures required by the custodian

Most major financial institutions have established procedures for fiduciaries to access accounts of deceased account holders. Email providers and social media platforms are increasingly establishing formal procedures as well.

Custodian Obligations and Limitations

Under EPTL 13-A, custodians must respond to fiduciary requests within a reasonable time. However, the law allows custodians to:

• Request reasonable verification of the fiduciary’s identity and authority
• Follow reasonable procedures established by the institution
• Deny access if doing so is required by federal law (for example, certain financial privacy laws)
• Recover reasonable costs of complying with the request

Custodians cannot refuse to grant access simply because the account holder has died or because their terms of service purport to prohibit access by fiduciaries.

Terms-of-Service Conflicts

One of the most important protections in EPTL 13-A is the override of terms-of-service restrictions. Many digital service providers try to restrict access to accounts after the account holder’s death.

Examples of terms-of-service restrictions:

• “Account ownership is non-transferable”
• “Upon death, this account is automatically deleted”
• “Fiduciaries cannot access this account”
• “Only the account holder may access this account”

Under EPTL 13-A-204, these restrictions are unenforceable in New York. Your fiduciaries have the legal right to access your digital assets despite such restrictions. However, the custodian may still require reasonable procedures and verification.

Practical Steps for Digital Estate Planning

Create a Digital Assets Inventory

The first step is to compile a comprehensive list of all your digital assets. Include:

• Email addresses and backup email addresses
• Social media accounts and usernames
• Online financial accounts (banking, investment, PayPal, etc.)
• Cloud storage accounts
• Cryptocurrency and digital wallets
• Domain names and websites
• Subscription services (streaming, software, etc.)
• Any other accounts or digital assets

Do not include passwords or access information in this inventory if it will be shared. Instead, maintain access information separately and securely.

Communicate Your Intentions

Write clear instructions about each digital asset. Specify:

• Whether the asset should be closed, memorialized, transferred, or preserved
• How your executor should handle ongoing subscriptions or financial obligations
• Any sentimental value and whether family members should have access
• Instructions for transferring or liquidating assets with financial value
• Special instructions for cryptocurrency or business digital assets

Store Access Information Securely

Do not leave passwords scattered around or written down in unsecured locations. Instead:

• Use a password manager (1Password, LastPass, Dashlane, etc.) and grant your executor access
• Maintain a secure document in a safe deposit box with limited access information
• Store detailed instructions in a locked location accessible only to your executor
• Consider a digital legacy service (Everplans, Digital Legacy, etc.) designed for this purpose

Document Everything in Your Estate Plan

Incorporate your digital asset wishes into your will, trust, or power of attorney. At a minimum, provide written instructions that your executor can reference.

A comprehensive digital asset addendum to your will or trust might specify:

• The scope of authority granted to your fiduciary over digital assets
• Any accounts that should be closed immediately upon your death
• Any accounts that should be preserved as memorials
• Instructions for cryptocurrency and high-value digital assets
• Authorization for your fiduciary to take any actions necessary under EPTL 13-A to access accounts

Designate a Digital Executor or Manager

You may want to designate someone with particular technical skills or knowledge to manage your digital assets. This could be your regular executor or a separate person.

If you designate someone other than your main executor, clarify their authority and compensation. Provide them with instructions and access information through your secure storage system.

Review and Update Regularly

Digital asset planning should be reviewed at least every two to three years as you acquire new accounts and services. Update your inventory, access information, and instructions as your digital life changes.

Westchester County Considerations

Westchester residents should be aware that digital asset planning is increasingly important given the prevalence of online banking and financial services in our area. Additionally, many Westchester families have substantial digital photographs and videos documenting family history, making digital preservation important. Digital assets also factor into your overall estate tax planning if they have significant financial value.

If you own a business or professional practice, consider how digital assets related to your business should be handled. This may include client lists, email accounts, websites, intellectual property, and digital files. Business succession planning should address these assets explicitly.

Conclusion

Digital assets are now a standard part of most estates. New York’s adoption of RUFADAA through EPTL 13-A provides important legal protections and authorizes your fiduciaries to access and manage these assets despite terms-of-service restrictions.

Proper digital asset planning requires creating an inventory, documenting your intentions, storing access information securely, and incorporating digital asset instructions into your formal estate plan. Without planning, your digital assets may be inaccessible to your family, subject to unwanted deletion, or mismanaged after your death.

Marc R. Lynde, Esq., can help you develop a comprehensive digital asset plan as part of your overall estate planning strategy. Contact our office to discuss how to protect your digital assets and ensure they are properly managed according to your wishes.