Securing a digital legacy A Private Client Article

Advising on estate planning is now not complete without consideration of how digital assets will be treated.

While owners of bitcoin or other cybercurrencies may still be in the minority, digital assets encompass much more than this, and can have implications for the majority of estate plans.

The legal position

The Property (Digital Assets etc) Act 2025 (the 2025 act), which came into force on 2 December 2025, has formally recognised digital assets as personal property under the law of England and Wales. This is a huge step forward after years of uncertainty.

While case law has been emerging for some time, and legislation has existed in other countries such as the US and Canada for a number of years, this is the first legislation in England and Wales that has confirmed the status of digital assets as personal property.

Under English law, personal property previously fell into two categories: things in possession and things in action. Things in possession include tangible physical items, such as furniture or jewellery. Things in action are intangible legal rights such as debts or contractual claims. When they first emerged, digital assets did not appear to fit neatly into either category. 

The Law Commission’s report into digital assets, published 28 June 2023, recommended that a third category of property should be recognised and that this should include certain assets existing only in electronic form (such as cryptocurrencies and non-fungible tokens (NFTs)). The 2025 act has formally implemented the commission’s recommendation to recognise a third category of personal property for digital assets.

Case law had already established that digital assets could be treated as personal property: in the 2019 case AA v Persons Unknown, the High Court found that bitcoin could be considered property, even though it is neither a thing in possession nor a thing in action. In this case, AA was an insurer whose insured client suffered a ransomware attack. Hackers demanded a ransom in bitcoin. However, the 2025 act, by clearly recognising the third category of property means it is now possible to have certainty about handing on digital assets on death.

What are digital assets?

It is important to distinguish between digital assets that have financial value and can be passed on, and those that are mere licences that end on death. The former includes assets such as cryptocurrencies / crypto tokens, NFTs, tokenised rights, monetised YouTube channels and domain names. The latter type includes access-oriented accounts such as email, cloud drives, social media and messaging, streaming licences and apps. 

This distinction matters because property can be gifted and administered like other estate assets, while licences cannot usually be transferred and come to an end on death.

So while a testator can plan to hand on cryptoassets or photographs stored in the cloud, digital accounts that are merely licences, such as books on a Kindle or music on Spotify, are merely non-transferrable licences that cannot be passed on.

Planning in relation to digital assets

Section 25 of the Administration of Estates Act 1925 imposes an obligation on personal representatives (PR) to gather in all of the assets in an estate. However, where digital assets are concerned, a new layer of complexity is added because unlike other forms of property, digital assets are subject to terms of service.

The first thing to consider is what form the digital assets take and what action will need to be taken in relation to them.

An inventory of digital assets is a good starting point and can act as a way to distinguish between the different categories of asset. There are various websites which have templates that can be helpful. This can include everything from details of email and social media accounts, to online bank accounts, cryptocurrency and intellectual property. Therefore, the testator can consider how each category of asset is likely to be treated on death, and to plan accordingly. One caveat is that this is a fast-moving area of law, and so it’s important to review the plan frequently, especially where there are significant digital assets in the estate.

Unlike traditional property, such as a bank account where the executor of an estate simply needs to write to the bank with a copy of the grant of probate, there is an added layer of complexity with many digital assets, in that individuals will have signed terms of agreement as a condition of signing up with a digital assets provider, often without reading the agreement and therefore without any idea of what they are actually agreeing to.

Service providers are often unwilling to allow access to anyone other than the original account holder, with the vast majority prohibiting the customer sharing their account password or assigning their rights under the contract.

This can cause real practical difficulties during an estate administration. In the UK, section 1 of the Computer Misuse Act 1990 makes it an offence (among other things) to access an online account after someone’s death without authority. Because this authority needs to come from the service provider (and not the deceased) this can be problematic and actions such as sharing passwords are prohibited. This contrasts with the situation in the US for example, where laws such as the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), prioritise online tools over contrary terms of service and give much more power to testators to create a post-death plan for their digital assets. Whether a similar law will be enacted in the UK in due course is not yet clear.

Testators should consider reviewing the terms of service of digital asset providers to determine what additional steps they need to take beyond writing a will in order to ensure that their loved ones can access their accounts.

Many of the larger providers such as Google, Facebook and Apple have put in place their own measures to facilitate the situation post-death and it is important that individuals engage with these, especially where not doing so could lead to valuable assets being lost.

The law in this area has developed over the last few years. Apple, for example, was prompted to introduce a digital legacy option after negative publicity following the case of Matthew Thompson, a man in his 30s who died and whose widow was forced to apply for a court order in order to be able to access photographs and videos on his phone.

With the Apple digital legacy option, users can designate up to five legacy contacts. When the individual’s name is added to the account, an access key is created. After the death certificate is provided to Apple, it will grant access to the legacy contacts, allowing them to download photographs and other personal data.

Google has a similar system. The ‘inactive account manager’ allows users to nominate up to 10 trusted contacts, who can access their Google data once the account becomes inactive, such as photos and Gmail accounts. The user can choose what data is shared with each of the nominated contacts. These contacts can then choose whether to share photos, Gmail and so on and can also instruct for these to be deleted.

Similarly, Facebook allows individuals to create a legacy contact to manage a memorialised profile, who is able to pin posts, change profile photos, request deletions and download content (if enabled).

With assets such as cryptocurrency, it is essential that the PRs of the estate can access the private key, so that they can administer the assets. The use of a custodian arrangement usually means that the private key can be passed to the estate securely. There have been a number of cases where valuable cryptocurrency has not been able to be accessed on someone’s death so it’s vital that testators consider how their executors will be able to do so. 

Should you appoint a digital executor?

Executors are the people who will administer the estate and so where there are significant digital assets, particularly valuable ones such as crypto-currencies or NFTs, it is wise to consider appointing at least one executor who is knowledgeable about digital assets.

While most wills appoint executors that will administer all of the assets in the estate, it is possible to appoint both general executors to deal with the bulk of the estate and, alongside them, to restrict one executor’s power to a defined class of assets.

As discussed above there has been lengthy debate in the past about whether digital assets constituted property. In November 2019, the Law Tech Delivery Panel, headed by Sir Geoffrey Vos, Chancellor of the High Court, published legal guidance to say that cryptoassets have all the legal indicia to qualify as property and should be treated as such. The 2025 act removes all uncertainty by recognising a third category of property rights.

This means that it is now possible to apply for a separate grant of probate limited to digital assets, in much the same way as it is possible to apply for a separate literary grant. There may be cases where this could be advantageous, such as where someone has complex digital assets that will require ongoing administration. 

In the vast majority of cases, this will not be necessary, but it is worth explicitly stating in the will that the testator has considered digital assets and is appointing the executors (or someone else) to act as digital assets manager. If someone is appointed a manager and not an executor, they will not have the legal right to administer the digital assets. However, they will be able to assist the executors in dealing with the digital assets in much the same way as a legacy contact or, if the executors are appointed digital assets manager, it will demonstrate to the service providers that the testator has considered digital assets and given express authority in their will. This may be helpful in the future if English law adopts something akin to RUFADAA, as it will demonstrate that the deceased considered and consented to the executors accessing their digital assets after death.

How should the will treat digital assets?

If no specific reference is made to digital assets in the will, they will form part of the residuary estate. It is also possible to include a clause making specific gifts of crypoassets. It is important to distinguish between the hardware on which the assets are stored, such as a computer, and the digital asset itself. If the beneficiaries are not the same, it is important to consider how the digital information will be transferred to the beneficiary before the hardware is given to the ultimate beneficiary.

If the residuary estate creates a trust, then the digital assets can form part of an ongoing trust. In this case it is very important that the will, which will be in effect the trust deed going forward, contains instructions that explicitly empower trustees to deal with digital assets, including authority to access wallets, private keys, recovery phrases, online accounts, and to transfer or liquidate them. Without clear wording, custodians may refuse access. A detailed letter of wishes should sit alongside the will giving guidance to the trustees.

Preparing for the taxation of digital assets

On death, HMRC has confirmed that digital assets will be valued as part of the estate and subject to inheritance tax. The IHT400 now includes specific reference to cryptoassets and their value should be included in box 76 of the main IHT400 form. 

HMRC has been concerned about non-compliance of those holding digital assets for some time, However, this will be more difficult now, as from 1 January 2026 the Cryptoasset Reporting Framework came into force, which requires UK reporting cryptoasset service providers to collect and report to HMRC information about the tax residency of users and their transactions.

Conclusion

Digital assets are a rapidly evolving area of the law and it is absolutely vital that those advising private clients keep up to date on the latest developments.