Digital Assets in Your Kentucky Estate Plan
When most people think about estate planning, they picture wills, homes, and bank accounts. But in today’s world, there’s another important category to consider: digital assets. These can hold financial value, sentimental meaning, or both.
Let’s break down what digital assets are, why they matter, and how to include them in your estate plan.
What Are Digital Assets?
Digital assets are any electronic records or content you own or control. Common examples include:
- Online bank and investment accounts
- Cryptocurrency wallets
- Social media accounts (Facebook, Instagram, Twitter/X)
- Email accounts
- Cloud storage (Google Drive, iCloud, Dropbox)
- Digital photos and videos
- Websites, blogs, or domain names
- PayPal, Venmo, or other payment platforms
- Loyalty points or airline miles
- NFTs and other blockchain-based assets
Some of these have obvious monetary value. Others are important for sentimental reasons or data security. Either way, they’re part of your estate.
Why Digital Assets Matter in Kentucky Estate Planning
Kentucky adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2016. This law allows you to grant access to your digital assets to a designated fiduciary, such as an executor, trustee, or power of attorney, but only if you give clear, legal permission.
If you don’t, your executor might be blocked from accessing your accounts. Service providers are often bound by federal privacy laws and terms of service agreements. Without authorization, they may refuse access, even if you’ve passed away.
This can lead to lost funds, locked accounts, or digital memories your loved ones can’t retrieve.
Step One: Take Inventory
Start by listing all your digital assets. Include:
- The name of the asset or account
- Where it’s stored
- Your usernames
- Passwords (stored separately or in a secure password manager)
- Any instructions you want to leave behind
You’d be surprised how many accounts we accumulate over the years. Taking inventory ensures nothing important is left behind.
Step Two: Choose the Right Fiduciary
Pick someone you trust, ideally someone familiar with using technology. This person may be the same as your executor or power of attorney, but it doesn’t have to be. Just make sure they’re comfortable managing digital information and will honor your wishes.
Step Three: Put It in Writing
In Kentucky, under RUFADAA, your digital asset instructions should be included in:
- Your will or trust
- Your power of attorney documents
- Possibly a separate digital asset memorandum (which lists passwords and access details, stored safely)
Be clear. Specify whether your fiduciary can read your emails or just close the account. Say whether you want your social media profiles deleted, memorialized, or passed to someone else.
Privacy and Security Considerations
You may be nervous about putting passwords in legal documents. Rightfully so. Wills become public records once probated.
To protect your privacy, keep sensitive access credentials in a secure place like a password manager or safe deposit box. Then, in your legal documents, refer to the location and authorize your fiduciary to retrieve the information.
Don’t Forget Business-Related Digital Assets
If you own a small business or side hustle, your digital assets may include even more than personal files and accounts. Think about online storefronts like Etsy or Shopify, business email accounts, client databases, accounting software, or social media pages used for marketing. These digital tools often represent income, branding, and operations.
If no one can access them after you’re gone, your business could suffer, or worse, shut down entirely. Including them in your estate plan ensures continuity and helps your loved ones or business partners handle affairs without unnecessary delays or complications.
Contact Our Legal Team To Learn More
Estate planning isn’t just about property and money anymore. Your online life needs a plan, too.
At Hoffman Walker & Knauf, we help individuals create estate plans that reflect today’s world. From your cherished photos to your cryptocurrency, we’ll guide you in protecting what matters, online and off.
Ready to start? Let’s talk about your digital legacy.
