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Digital assets estate planning means giving your executor or trustee a clear, legal path to the accounts and property you hold online. In Illinois, that usually takes three parts: a written inventory of what you own, documents that name who may act, and the account-level settings each platform provides.
Key takeaways
- Digital assets include crypto, cloud files, photos, domains, and online business accounts.
- The IRS treats digital assets as property, not currency.
- Owning an account and getting into it are different things. Without the credentials, ownership can mean very little.
- Apple and Google both let you name someone in advance, for free.
- Keep passwords and recovery phrases out of your will.
Most people can tell you where the deed to their house is. Ask where the crypto is, or who can open the family photos, and you usually get a pause. This guide covers what to write down and which settings to turn on.
What counts as a digital asset?
A digital asset is property or an account that exists as data. It lives behind a login instead of in a drawer. The IRS uses a narrower definition for tax purposes: any digital representation of value recorded on a cryptographically secured, distributed ledger (blockchain) or similar technology. For digital assets estate planning, you need to think about both.
Most households have something in at least a few of these groups:
- Cryptocurrency, whether on a hardware wallet, in cold storage, or on an exchange.
- Cloud storage: photos, tax records, and backups nobody else can open.
- Email and messaging accounts, which usually hold the password-reset trail to everything else.
- Domains and websites tied to an online business.
- Subscriptions, which keep billing after someone dies.
Why digital assets don’t transfer like the rest of your estate
Owning something and being able to reach it are two separate problems. With a house, the deed and the keys travel together. Online, they split up. Ownership is recorded in one place, while the password, the phone that gets the two-factor code, and the recovery email are somewhere else entirely.
Nobody doubts these assets have value. For U.S. tax purposes, digital assets are considered property, not currency. The hard part is getting that value to a family that may not even know it exists.
Who has authority to act after a death is a job for your core documents. Good estate planning services in Evanston name that person and say what they’re allowed to reach.
What happens to my cryptocurrency when I die?
It depends on who holds the keys. A private key is the secret string that authorizes a transfer, and whoever has it can move the coins. Your heirs inherit ownership. They don’t automatically inherit access.
The tax side is simpler. Digital assets are treated as property, and the general tax principles applicable to all property transactions also apply to transactions involving digital assets.
Picture a couple just north of Evanston. There’s a hardware wallet in a desk drawer and a Google account holding twenty years of email, and the spouse has never opened either one. The will is signed. The wallet is still a brick.
Self-custody vs. an exchange account
| Feature | Self-custody (hardware wallet, cold storage) | Custodial exchange account |
|---|---|---|
| Who controls the asset | You do, through the private key | The exchange holds the keys for you |
| What your executor needs | The device, the recovery phrase, and instructions | Proof of identity and whatever the platform requires |
| Most common failure | A recovery phrase nobody wrote down | An account nobody knew existed |
If you hold crypto or run an online business, a short review with an Illinois attorney can confirm your plan actually reaches those assets.
Should I put my passwords in my will?
No. The reason is practical more than legal. A will gets signed and then sits in a file for years, while passwords, two-factor devices, and recovery phrases change constantly. A password written into a will is usually out of date long before anyone needs it.
Use a password manager instead, and write down where it is and who’s allowed to open it. Your documents give someone the authority. The password manager holds the secrets.
The same question comes up if you’re ever incapacitated, which is why naming someone to act while you’re alive belongs in this conversation too. So a digital asset will is really two things: the signed documents, and a list you keep up to date.
The digital asset inventory every Illinois plan should include
A digital asset inventory is a written list of what you own online and where it lives. It tends to run longer than people expect. You can build it in one sitting:
- Financial accounts you manage online: banking, brokerage, payment apps.
- Cryptocurrency: every wallet and exchange, with a note on how each is held.
- Cloud storage and photo libraries, including anything shared.
- Email, messaging, and social media accounts.
- Business property: domains, storefronts, ad accounts, customer lists.
- Subscriptions and recurring charges.
For each one, note what it is, where it lives, and who should get it. Leave the passwords off. Keep the list next to your estate documents rather than inside them, so updating it never means reopening anything you signed.
Keeping that list current takes the same habit as moving assets into the plan you signed, and that follow-through is where plans for digital property most often fall apart.
Turn on your legacy contacts this week
This takes a few minutes. On Apple, a Legacy Contact is someone you choose to have access to certain data in your Apple Account after your death. Google’s Inactive Account Manager lets you choose trusted contacts and decide which account data they receive if your account goes unused for a period you set.
Set up both. Then tell the people you picked, so they know to look for it when the time comes.
Digital assets estate planning: frequently asked questions
- Does my will cover my crypto?
-
Property you own can pass under your will, but a will can't hand anyone a private key. If the recovery phrase is gone, a document naming your heir won't move a single coin. Plan for custody, not just the paperwork.
- Is cryptocurrency taxed as money or property?
-
Property. For U.S. tax purposes, digital assets are considered property, not currency, and the general tax principles applicable to all property transactions also apply to transactions involving digital assets. Your tax advisor can apply those principles to your situation.
- Who can access my email account after I die?
-
Largely, the provider decides, through its own settings and user agreement. What happens to your online accounts when you die depends mostly on what you set up ahead of time, which is why the Apple and Google tools are worth ten minutes today.
- Do Illinois families need a separate digital estate plan document?
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Usually not. Most plans cover digital assets inside documents you already have, with an inventory kept outside them so it stays current. Whether that's enough depends on what you own.
- How should an Evanston or North Shore family start?
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Start with the inventory, then the platform settings, then a review with an Illinois attorney. Families in Evanston, Illinois and the surrounding North Shore towns usually get the list done in one evening.
When to talk to an Illinois estate planning attorney
Most of this is record keeping. A few situations need more than a checklist:
- You hold crypto in self-custody, and nobody else knows the recovery phrase exists.
- You run an online business with domains, storefronts, or ad accounts in your name.
- You have a blended family, and it isn’t clear who should get which files and photos.
- You’re settling a parent’s estate and can’t get into their phone or email.
Talk to an Evanston estate planning attorney
Digital property is easy to own and easy to lose. Daci Jett Law helps families in Evanston, Illinois and across the North Shore build plans that cover crypto, cloud accounts, and online businesses along with everything else. Schedule a consultation to add a digital-asset section to your plan. It’s a conversation, not a commitment.
Daci Jett Law provides this content as general legal information. Reading it does not create an attorney-client relationship. For advice about your specific situation, schedule a consultation.
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