From Bitcoin wallets to Instagram accounts left in wills, digital inheritance is a rapidly evolving yet complex area of private client law. This article explores how digital and decentralised assets are defined, the legal challenges of passing them on, and why thoughtful estate planning is more important than ever.
What are digital assets?
With no universally agreed definition of digital assets, their classification varies across jurisdictions, leading to differing interpretations of what they represent. For instance, Canada treats them as commodities, while Mauritius classifies them as digital assets. In a rare alignment, both the USA and the UK recognise digital assets as property for tax purposes, though in the UK’s case, “recognition” might be a strong word.
In a 2023 report, the Law Commission described them as a broad category of electronic resources, including crypto-tokens, digital files, email accounts, domain names, in-game assets, and other electronically stored records.
Decentralised assets
Decentralised assets include cryptocurrencies, Non-Fungible Tokens (NFTs), and similar technologies. Cryptocurrencies are digital currencies that are not issued by central banks, operating instead on blockchain networks (decentralised digital ledgers verified by a global network of computers). Bitcoin and Litecoin are among the earliest examples, used primarily as mediums of exchange.
NFTs, by contrast, represent ownership of unique digital items such as art, music, or virtual goods. Unlike fungible cryptocurrencies, NFTs are one-of-a-kind and also exist on the blockchain. In private client law, both NFTs and cryptocurrencies are typically grouped under the term cryptoassets.
Social media accounts
Social media accounts, like Instagram or Facebook pages, often carry sentimental value, preserving memories and connections. However, it is important to note that with commercialisation of social media and the rise of social media influencers, such accounts can also carry a significant commercial value.
Legal issues in digital inheritance
There is currently no clear legal framework governing who inherits digital assets such as cryptocurrency or social media accounts. Access to these assets is often determined by the terms and conditions of individual platforms, which may be vague, restrictive, or subject to change.
The proposed Property (Digital Assets Etc.) Bill seeks to confirm that certain digital assets, such as crypto tokens, may be recognised as a form of property. However, it remains unclear which digital assets this would cover, and the legislation may leave important decisions to the courts.
Some commentators have expressed concern that the Bill is too wide in scope and may lead to legal uncertainty, particularly if it is applied to digital content such as social media profiles. From a private client perspective, the Bill does not directly address succession or inheritance planning, and existing laws relating to wills and probate do not adequately account for digital assets.
What is estate planning?
An estate includes all assets and property a person owns at the time of death. Estate planning ensures these are passed on according to their wishes, typically through a valid will. Without one, intestacy rules apply but rarely reflect the person’s full intentions.
Why do digital assets matter in estate planning?
The digital age is reshaping how wealth is created, stored, and transferred. Generation Beta, emerging in 2025, will be the first to grow up fully in a digital-first world where virtual experiences shape relationships, careers, and finances.
At the same time, we are witnessing history’s largest wealth transfer, with baby boomers expected to pass down £5.5 trillion to millennials and Gen X by 2050. These younger generations, already comfortable with digital banking and cryptocurrencies, are well-equipped to integrate digital assets into their financial lives.
Unlike prior generations who focused on property and stocks, younger heirs are likely to invest in tokenised assets, digital currencies, and virtual economies. This signals a future where digital assets will be a larger part of financial planning, making digital estate planning not just relevant, but essential.
Estate planning for digital and decentralised assets
Unlike traditional assets, cryptoassets are not managed by banks or institutions. They reside in encrypted wallets, accessible only through private keys or seed phrases. If access is lost, there is no way to recover them.
To avoid this, individuals should prepare a secure memorandum listing all financial decentralised assets, such as crypto wallets, NFTs, and others, along with guidance on access. This document should not contain passwords or private keys directly but should refer to a separate secure source.
For significant cryptocurrency holdings, placing them in a trust is recommended to ensure secure management and succession planning. As they are legally classified as property, trustees can manage cryptoassets as part of an investment portfolio. Trust deeds should clearly authorise this, and detailed instructions can be included in a non-binding letter of wishes.
Some providers, like Fidelity Digital Assets, offer custodial services to manage and store digital assets for clients who prefer to outsource technical and security tasks, though private trustees may offer greater flexibility and personalised oversight.
Managing social media accounts after death
Most major platforms now offer ways to manage accounts after death. Facebook and Instagram support memorialisation or deletion, with legacy contacts handling limited tasks. X (formerly Twitter) lacks a memorialisation option but allows account closure with proof of death.
To ensure digital wishes are followed, individuals should include preferences in a letter of wishes and reference a secure document with access details. Reviewing each platform’s post-death policies is essential, a summary of major ones can be found here.
Conclusion
In Digital Transformation, Lindsay Herbert writes, “the truth is that digital transformation is actually not about adapting to new technology at all – it is about directing an organisation to be more adaptive to change itself”. For lawmakers, this means shifting from a reactive to a proactive stance, creating legal frameworks that help professionals navigate change rather than chase it.
For private client practitioners, digital assets are no longer fringe considerations; they are central to identity and wealth. With legislation lagging behind emerging technologies, private client professionals are expected to bridge the gap between legal uncertainty and modern realities. One can only hope the law soon catches up to support them.
Our team
Our team of trained and regulated professionals understand the complexities of inheritance law. When you instruct a lawyer, you receive expert advice tailored to your personal and financial circumstances, ensuring your true intentions are reflected. We can advise you on potential tax implications and help structure your estate in a tax-efficient way, but most importantly, you have peace of mind that your wishes will be clearly understood and legally enforceable.
If you’re thinking about making or updating a will, please do not hesitate to a member of our private client team.
This is only intended to be a summary and not specific legal advice.
