An Estate Plan Can Name the Right People and Still Lock Them Out.

An estate plan can name the right people and still leave them locked out.

The family knows an account exists. They cannot find the records. They have a password but no legal authority. They have authority but the platform’s process says something different. A digital wallet exists, but nobody can locate the keys or the tax basis.

I think digital estate planning needs four separate answers: what exists, how it is accessed, who has authority and what records need to survive.

Build an inventory without building a security problem

Start with categories, not passwords. Financial accounts, email, cloud storage, social media, domain names, online businesses, loyalty programs, digital payment accounts and digital assets such as cryptocurrency may all require a decision.

For each item, record the provider, account purpose, owner, approximate significance, recovery method and where secure access instructions are kept. Do not place live passwords, private keys or seed phrases in a will. A will may become public, and a static list becomes outdated quickly.

The inventory should help the authorized person find the door. The security system should still control the key.

Access and authority are not the same

A family member who can technically sign in may not have legal authority to manage the account. An executor or agent may have legal authority and still need to follow the provider’s process before access is granted.

The Revised Uniform Fiduciary Access to Digital Assets Act gives states a framework for fiduciary access to online accounts. State adoption and the client’s documents matter. Provider tools and terms can matter too.

And so I would ask the estate attorney to address digital authority in the will, trust and powers of attorney where appropriate. The client should also review any legacy contact, inactive-account or beneficiary feature offered by the provider. One does not automatically replace the other.

Crypto needs custody instructions and tax records

Cryptocurrency creates a practical problem that ordinary account statements may not solve. Access can depend on private keys or seed phrases. Transactions may occur across wallets and exchanges. The person who finds the asset may still be unable to establish cost basis or transaction history.

The IRS says digital-asset transactions must be reported and directs taxpayers to keep records that document purchases, receipts, sales, exchanges and other dispositions. That recordkeeping requirement does not disappear at death.

This is where the CPA perspective is important. The estate plan needs a secure access process, but it also needs records that support valuation, basis and reporting. A wallet balance without history is only half the file.

A hypothetical family with the password but not the plan

Consider a hypothetical client who owns a domain connected to a small online business, stores family records in a cloud account and holds digital assets in two wallets. The spouse knows the password-manager master password. The durable power of attorney never mentions digital assets, the business domain is registered under an old email address, and the purchase history for one wallet is scattered across two exchanges.

The fix is not to email a spreadsheet of credentials. The attorney should review authority. The client should update recovery information and document the custody process securely. The CPA should identify the records needed for basis and reporting. The business continuity file should show how the domain and revenue accounts are maintained.

The password was not the plan. It was one piece of access.

Test the plan without the client’s help

Assume the client cannot answer a call, unlock a device or authorize a transfer. Can the authorized person identify the important digital accounts? Can that person find the attorney, custodian, exchange or platform instructions? Is there a secure method to recover access? Are the tax and transaction records understandable?

If the answer relies on the client remembering everything, the plan will fail at the moment memory is unavailable.

Create the inventory. Separate authority from credentials. Secure the recovery instructions. Preserve the tax records. Then test the process with the future decision-maker without exposing secrets they do not yet need.