Last updated on March 14, 2022

How To Protect Digital Assets After Death

High-net-worth individuals with large portfolios of cryptocurrency are rightly concerned about what could potentially happen to those assets after their death. This concern hit the news when thirty-year-old Gerald Cotten died from Crohn’s disease while traveling in India, leaving Quadriga, Canada’s biggest cryptocurrency exchange, unable to gain access to over $145 million in assets. When experts tracked down the digital wallets a month later, they were completely empty. This doesn’t have to happen to you. An experienced estate planning attorney in New York City can help you develop a solid plan to pass all of your digital assets, including your cryptocurrency portfolio, to your intended beneficiaries safely and easily.

The Challenge of Estate Planning With Digital Assets

The first and most basic step in protecting your digital assets is making sure that your New York City Estate Planning Attorney is always up to date on all information regarding your online personal and business accounts including:

● Web Hosting and Email;

● Credit Card, Airline and Hotel Rewards Programs;

● Paypal and Other Online Banking, Investment and Brokerage Accounts;

● Professional Management Accounts and Customer Databases and

● Cryptocurrencies.

It’s important to review these assets with your attorney because state and federal laws sometimes default to prohibit access by third parties, even after death, to protect the privacy of the account holder. In addition, the fine print in digital service providers under “terms of service agreements,” often prohibit third party access, including by fiduciaries after a person’s incapacity or death. These agreements contain these provisions to protect the service providers from liability under federal laws such as the Electronic Computer Privacy Act (ECPA), The Stored Communications Act (SCA) and the Computer Fraud and Abuse Act (CFAA.) Without legal access to email accounts, it may be impossible to locate all of a person’s accounts with financial institutions and contracts with customers. That’s why it’s important to hire an estate planning attorney in New York City that has a thorough understanding of financial digital asset access protocols and how to ensure their safe succession.

New York Adopted The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)

In 2013 and 2014, New York adopted a version of the federal Revised Uniform Fiduciary Access to Digital Assets Act (FUFADAA,) by amending Article 13-A of the New York Estates and Trusts Laws, titled “Administration of Digital Assets.” Holders of online accounts are now called “users” and may appoint fiduciaries with the right to access their digital accounts. For example, users may now provide directions in wills, trusts and powers of attorney to access online data. After the amendment passed, some online companies, such as Facebook and Google, began to offer special tools that make it easier for users to disclose their assets on these platforms to fiduciaries. Most importantly, the amendment overrides the “terms of service” agreements that prohibit third party access, specifically granting authorized fiduciaries the power to access digital assets.

Estate Planning For High-Net-Worth Individuals With Investments in Cryptocurrency

Despite attempts to modernize federal and state laws to facilitate the transfer of digital assets to intended beneficiaries, most estate planning attorneys in New York City are not up to speed with how to handle estates for high-net-worth individuals with investments in cryptocurrency. Cryptocurrency uses blockchain technology to create an immutable, decentralized public ledger where individuals can earn, purchase and sell it through a network of independent computers that track it with complex algorithms. Cryptocurrency doesn’t utilize the safeguards that most financial institutions require for fiduciaries to access accounts like powers of attorney, original death certificates or testamentary letters. Once a fiduciary obtains the complex passcode for the accounts, there is no oversight, and unauthorized transfers are virtually impossible to recover. That’s why experienced digital asset and cryptocurrency estate planning attorneys use methods such as “cold storage” to hold offline cryptocurrency information. This method can allow fiduciaries to transmit the password without personally knowing it. Due to ambiguity in federal and state laws regarding the tax status of cryptocurrency, it’s important that the use of “cold storage” is properly drafted in estate planning documents. If you’re heavily invested in cryptocurrency, it is crucial to speak to a New York City Estate Planning Attorney that specializes in financial digital assets.

For more information, please contact Natalia Sishodia, Sishodia PLLC, email

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