Your estate includes more than your home, bank accounts, and physical belongings. It may also contain valuable digital assets, such as cryptocurrency, online bank accounts, social media profiles, digital photos, and important documents stored in the cloud.
Without proper planning, your family may struggle to access these assets or manage your online accounts after your death or incapacitation. Some digital property may even become permanently inaccessible.
For North Carolina residents, including digital assets in an estate plan is an important step toward protecting their property and making things easier for loved ones. This guide explains how digital estate planning works, what NC law says, and how you can protect your online accounts and digital property.
What Are Digital Assets in Estate Planning?
Digital assets are electronic records, accounts, and files that you own, control, or have rights to access. They may have financial, personal, or sentimental value.
Some common examples include:
- Financial accounts: Online banking, payment apps, investment accounts, and digital wallets.
- Cryptocurrency: Bitcoin, Ethereum, and other digital currencies.
- Social media accounts: Facebook, Instagram, LinkedIn, and other profiles.
- Digital files: Photos, videos, emails, personal documents, and cloud storage.
- Online businesses: E-commerce stores, websites, domain names, and digital income sources.
- Subscription accounts: Paid memberships, streaming services, and online platforms.
Not every digital asset has financial value. Family photos, personal messages, and important documents may still be meaningful to your loved ones.
Understanding what you own is the first step toward including these assets in your North Carolina estate plan.
What Happens to Your Digital Assets After Death?
When someone dies, their digital assets do not automatically become available to family members. Access depends on the type of asset, the service provider’s policies, applicable laws, and the deceased person’s instructions.
For example, a family member may need to contact an online bank to handle an account. A social media platform may offer options to memorialize or close a deceased user’s profile. Cryptocurrency can present a bigger challenge if nobody knows where the private keys or recovery phrases are stored.
Your loved ones may face several difficulties:
- They may not know which online accounts you own.
- Service providers may refuse access without proper legal authority.
- Important photos, emails, and documents may become difficult to recover.
- Cryptocurrency may be permanently lost without the necessary access information.
- Automatic subscriptions and recurring payments may continue.
Planning helps reduce these problems and gives your family clear instructions about managing your digital property.
What Does North Carolina Law Say About Digital Assets?
North Carolina has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which establishes rules for fiduciaries who need to access another person’s digital assets.
A fiduciary may include an executor, personal representative, trustee, or agent acting under a power of attorney.
Under North Carolina law, a fiduciary’s authority to manage digital assets depends on the person’s legal authority, the applicable estate planning documents, and the service provider’s terms.
The law also recognizes certain ways to give directions about digital assets. For example, some online platforms allow users to select a legacy contact or specify what should happen to their accounts after death. These directions may take priority over conflicting instructions in a will or other estate planning document, depending on the circumstances.
However, having authority over digital assets does not necessarily mean a fiduciary can read every private communication. The law distinguishes between accessing digital property and accessing the content of electronic communications.
North Carolina residents should therefore make their wishes clear and ensure their estate planning documents provide appropriate authority.
How to Include Digital Assets in Your Estate Plan
Including digital assets in your estate plan does not have to be complicated. The goal is to make sure your trusted family members or fiduciaries know what you own, where to find it, and how you want it handled.
Here are some practical steps to get started.
1. Create a Digital Asset Inventory
Make a list of your important digital accounts and property. Include online banking, investment platforms, cryptocurrency wallets, social media accounts, email addresses, websites, and cloud storage.
You do not need to list every minor account. Focus on assets that have financial, personal, or legal importance.
2. Choose a Trusted Digital Executor
Consider appointing someone who can manage your digital property after your death. This person should be responsible, trustworthy, and comfortable handling online accounts and technology.
You can discuss your wishes with your estate planning law firm to determine the appropriate legal authority for this role.
3. Update Your Will and Power of Attorney
Your will should address how your digital assets should be managed and who should receive any transferable property.
Your power of attorney should also include appropriate authority for your agent to handle digital assets if you become incapacitated.
Remember that a will and power of attorney serve different purposes, so both may be necessary.
4. Use Online Legacy Settings
Some platforms allow you to select a trusted contact or provide instructions about what happens to your account after death.
Review these settings regularly and make sure they match your estate planning documents.
5. Store Access Information Securely
Keep account details, recovery instructions, and other necessary information in a secure password manager or encrypted storage system. Tell your chosen representative how to access these instructions when needed.
Avoid putting sensitive passwords or private keys directly in your will because estate documents may become accessible to others during probate.
How to Protect Cryptocurrency and Other Valuable Digital Assets
Cryptocurrency and other valuable digital assets need special attention because losing access information can mean losing the asset permanently.
Unlike traditional bank accounts, cryptocurrency transactions may be difficult or impossible to reverse. Your family may not be able to recover funds if they cannot access the wallet or private keys.
Consider taking these precautions:
- Identify all cryptocurrency holdings: List the wallets, exchanges, and platforms where you keep digital currencies.
- Secure your private keys: Store private keys and recovery phrases in a secure location that your trusted representative can access when legally authorized.
- Protect hardware wallets: If you use a physical crypto wallet, explain where it is stored and how it works.
- Include digital investments: Identify other valuable digital property, such as domain names, online businesses, and investment accounts.
- Plan for secure transfers: Make sure your estate documents explain who should receive these assets and how they should be managed.
Never share private keys or recovery phrases through unsecured emails or ordinary documents. Your estate plan should provide a secure way to locate this information without exposing it to unauthorized people.
What Happens to Digital Assets If You Become Incapacitated?
Digital estate planning is not only about what happens after death. It also matters if you become seriously ill, injured, or mentally unable to manage your financial and personal affairs.
For example, you may be unable to access your online banking accounts, pay business expenses, manage investments, or renew important digital subscriptions.
Without proper legal authority, your family may struggle to handle these responsibilities.
A durable power of attorney can help address this problem. In North Carolina, you can authorize a trusted agent to manage certain financial and digital matters on your behalf. However, the document should provide appropriate authority for digital assets under applicable law.
You should also consider how your agent will manage online businesses, financial accounts, digital records, and other important property while protecting your privacy.
Planning for incapacity ensures that someone you trust can help manage essential matters when you cannot do so yourself.
Common Digital Estate Planning Mistakes NC Residents Should Avoid
Even people with traditional estate plans can overlook their online property. Some common mistakes include:
- Ignoring digital assets: Assuming that only physical property and bank accounts belong in an estate plan.
- Not updating account information: Forgetting to add newly created accounts, wallets, or online investments.
- Sharing passwords insecurely: Leaving sensitive login details in unprotected documents or emails.
- Choosing the wrong representative: Appointing someone who cannot manage digital accounts or understand basic security requirements.
- Ignoring cryptocurrency: Failing to document digital wallets, recovery phrases, and private keys.
- Relying only on a will: Not considering online legacy settings, powers of attorney, and platform-specific requirements.
- Failing to review the plan: Keeping outdated instructions that no longer reflect your digital property or wishes.
Review your digital estate plan whenever you create important accounts, purchase valuable digital assets, or make significant changes to your financial situation.
How an Estate Planning Attorney in North Carolina Can Help
Digital estate planning involves more than creating a list of passwords and accounts. You also need to consider ownership rights, privacy, legal authority, and how different service providers handle requests from fiduciaries.
An experienced estate planning attorney in North Carolina can help you:
- Identify and organize your digital assets.
- Include appropriate digital asset provisions in your will and trust.
- Prepare a power of attorney with suitable digital asset authority.
- Understand your rights and responsibilities under North Carolina’s RUFADAA.
- Select an appropriate personal representative, trustee, or agent.
- Plan for cryptocurrency, online investments, and digital business interests.
- Coordinate your online legacy instructions with your estate planning documents.
An attorney can also help ensure that your digital estate plan works alongside your existing estate planning arrangements.
Professional guidance can be especially valuable if you own cryptocurrency, operate an online business, or have digital assets spread across multiple platforms.
Final Thoughts
Digital assets are an important part of modern estate planning. From cryptocurrency and online investments to personal photos and social media accounts, these assets deserve the same attention as your traditional property.
For North Carolina residents, creating a digital estate plan can help protect valuable online property, reduce confusion, and make it easier for loved ones to manage important accounts after death or incapacity.
Start by making an inventory of your digital assets, choosing trusted representatives, securing access information, and updating your will and power of attorney. Most importantly, review your plan regularly as your digital life changes.
If you are unsure how to include digital assets in your estate plan, consult an experienced North Carolina estate planning attorney. The right legal guidance can help ensure your digital property is protected, and your wishes are respected.
