What Happens to Digital Assets When You Die in California?

Without a proactive estate plan, your digital assets are likely to be permanently lost when you die. This includes a wide range of assets, from digital photo libraries to large cryptocurrency portfolios. When you pass away, technology companies rarely have an automatic way to transfer your valuable assets. In fact, they usually block transfers because these companies are required to enforce strict privacy policies and privacy laws that block unauthorized access to your accounts and information.

Luckily, you can protect your loved ones and your digital assets with an estate plan that accounts for everything you have worked so hard to achieve. To get started, contact the Kushner Legal team so your assets aren’t left behind.   

What Are Considered Digital Assets Under California Law?

Under California law, digital assets include any electronic record or online property in which you have a right to or interest in. This definition is intentionally broad. It includes assets such as:

• Digital Financial Assets: Cryptocurrencies (e.g., Bitcoin and Ethereum), PayPal or Venmo balances, online-only banking accounts, digital trading accounts, and investment apps.
• Business Digital Assets: E-commerce stores (e.g., Shopify, Amazon storefronts), monetized YouTube channels and social media accounts, domain names, intellectual property, blogs, and affiliate marketing accounts.
• Sentimental and Personal Digital Assets: iCloud or Google photo libraries, social media accounts (e.g., Instagram, TikTok, Facebook), email archives (e.g., Gmail, Outlook), and digital music or movie libraries.

Will My Family Automatically Get Access to My Online Accounts?

No. No one automatically gets access to your online accounts, emails, virtual wallets, or passwords when you die. State and federal privacy laws, alongside strict terms of service agreements, prohibit unauthorized access to your private information and accounts. Even if it is your spouse or lifelong friend, the law doesn’t grant them access by default.

California adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) to address the problems posed by these strict default rules. Under RUFADAA, a tech company can release your data to a designated representative, but you have to grant that specific authority through your estate plan. If you don’t formally designate anyone, the default rules apply. This means your account will stay locked or possibly even be deleted.

What Happens to Cryptocurrency When You Pass Away in California?

If you hold cryptocurrency directly and die without securely passing on your private keys or seed phrases to a trusted representative, your cryptocurrency is permanently lost. Unlike traditional bank accounts, no customer service department or government agency can recover a lost crypto wallet for your family.

If you hold your digital currency on a centralized exchange like Coinbase or Kraken, the process is significantly different. Legally, the exchange holds the cryptocurrency for you much like a traditional bank. As a result, your named executor or successor trustee can obtain these assets by presenting court orders or estate planning documentation.

How Can I Protect My Digital Assets from Being Lost?

To completely safeguard your digital legacy and ensure your loved ones receive what is rightfully theirs, you must take specific, proactive steps while you are still alive:

• Use a secure password manager. Even if your estate plan accounts for your digital assets, it is easy to make mistakes when you have to track hundreds of passwords for different accounts. A secure password manager lets your executor or successor trustee manage your digital assets with one simple login.
• Designate a digital executor. Name someone who is tech-savvy and understands the digital world. For example, you can have an elderly uncle who is an accountant handle your real-world tangible assets, while a younger cousin serves as your digital executor.
• Update your estate plan. Work with experienced Beverly Hills estate planning attorneys to draft specific clauses that grant your fiduciary the power to access, manage, and distribute your digital property.
• Use platform-specific legacy tools. Set up built-in features like Apple’s Legacy Contact or Google’s Inactive Account Manager to provide an extra layer of authorized access to your chosen contacts.

Frequently Asked Questions for Transferring Digital Assets in CA

Can’t my executor just log in with my passwords after I die?

Possibly, but that is risky. The primary issue is that logging into someone else’s account typically violates the platform’s terms of service and can even be prosecuted as Unlawful Access to Stored Communications under federal law. This often causes issues, such a high-profile Instagram account being locked once an authorized log-in is detected. Furthermore, if someone tries to transfer assets out of your digital wallet in violation of the law, they face significant legal penalties.

Do I need a completely separate will or trust for my digital assets?

No, your digital assets can be incorporated into a traditional estate plan. Specifically, a standard will or trust agreement can include clauses that comply with California laws such as RUFADAA to authorize your executor or successor trustee to manage your digital assets.

Does a routine California will cover my cryptocurrency?

Unless you work with West Hollywood estate planning attorneys familiar with cryptocurrency and digital wallets, a routine will or trust is unlikely to include provisions covering cryptocurrency. Estate planning documentation is worthless if it doesn’t explain how to access the cryptocurrency in the first place.

Our team at Kushner Legal can provide an ironclad estate plan that fully accounts for your cryptocurrency, along with practical instructions so your loved ones can access the assets.

Kushner Legal Is Here to Help Secure Your Digital Legacy

Our team at Kushner Legal helps ensure your digital assets can be safely transferred to the people you care about most. Whether you plan to transfer a monetized digital brand or want to ensure your family can access priceless digital photo albums, we are here for you.

Contact Kushner Legal today to schedule a consultation and take the first step towards securing your digital assets.