What Happens to Your Digital Assets like Social Media and Crypto Accounts When You Die?

Most Illinois residents have an estate plan for a house, a bank account, or a life insurance policy, but few have planned for what happens to their Venmo balance, a cryptocurrency wallet, or a Facebook profile when they die.

These digital assets can be difficult or impossible for loved ones to access and may therefore sit unclaimed indefinitely. An experienced estate planning attorney can accommodate these new assets in a comprehensive estate plan, but it helps to understand how state and federal laws apply.

What Counts as a Digital Asset?

Any online property a person owns or has rights to is digital assets. They are particularly vulnerable to loss because there are often no titles or ownership documents involved; they are accessed and manipulated by password only. These can include:

1. Social media profiles
2. Email accounts
3. Cloud-stored items like photos
4. Online banking and brokerage accounts
5. Domain names
6. Cryptocurrency

Illinois Law Governing Digital Assets

In practice, a will that simply leaves “all my assets” to a spouse or child is usually not specific enough because a technology company can lawfully deny a family member access without clearer direction. Consider the following:

1. Social Media account access is governed by Illinois’ Revised Uniform Fiduciary Access to Digital Assets Act, which determines whether and how an executor, trustee, or agent under a power of attorney may access a deceased or incapacitated person’s digital accounts. There is a strict order to the Act, giving primary importance to the account holder setting up access within the platform’s own tool. The second tier of access is specific instruction left in a will, trust, or power of attorney. The last bulwark is the social media company’s terms of service, which can deny access to family members without a court order.
2. Cryptocurrency is more difficult to manage due to access issues and taxes. Unlike a bank account, crypto assets are held in a wallet that requires a private key that is intentionally unrecoverable by design. Even a court order is meaningless if no one knows where the key is stored. It is essential to document instructions for locating wallet credentials or these assets can be lost the moment the owner dies. In addition, crypto assets are treated as property, not currency. As such their value is “stepped-up” to fair market value at the time of the owner’s death. A beneficiary who inherits crypto that has increased substantially in value rarely pays capital gains tax if they are sold close to that value. Yet estates large enough to owe federal taxes still need the crypto’s date of death value reported on IRS Form 706.

Practical Steps for Illinois Residents

The Illinois State Bar Association’s guidance on estate planning suggests a detailed plan that includes digital assets, including:

1. Keeping a private, updated list of accounts and wallets in a place where your executor can find it (not inside your will, which becomes a public record when it reaches probate).
2. Use the legacy tool on each social media platform and name a digital executor with authority.
3. For cryptocurrency, document wallet locations and recovery procedures. Consider creating a trust to hold your crypto assets outside of probate.
4. Revisit your plan periodically, since new accounts and platforms appear constantly and an outdated list is unhelpful.

Staying Abreast of Changes

Digital assets are a relatively new category of estate planning but the law in Illinois has caught up, and a comprehensive plan is essential. Contact the estate planning professionals at Legacy & Life Law to review your accounts and compare them against your existing will or trust to make sure your digital property actually reaches the people you intend to pass it to. Regular check-ins are also encouraged to stay on top of major changes in family configuration as well as assets. Call for a consultation today.