Due to blockchain and tokenisation, wealth is no longer limited to bank accounts, share certificates and file cabinet property documents. Our assets, from tokenised government bonds and stablecoins to tokenised real estate, are increasingly digital and accessible - exclusively via cryptographic keys, passwords and on digital exchanges/platforms. Borderless money transfers, fractional ownership of high-value assets and quick worldwide settlement are outstanding benefits of this change. But this all equally raises new questions as concerns one of the oldest human regarding what happens to our wealth after death. Historically, estate planning has focused on tangible property and identifiable accounts; executors might find a bank, obtain deeds and pursue probate processes - difficult in the age of digital money and tokenised assets. After all, unshared secret keys, expired two-factor authentication codes and badly drafted wills can lock up capital forever.

Source: Teamblockchain

When people hear the term, digital assets, their minds often jump to volatile cryptocurrencies such as Bitcoin or Ethereum. But the modern digital asset universe is far broader, particularly in the context of estate planning. At its core, a digital asset is any item of value stored in a digital format, owned or controlled by an individual and, in the financial realm, this increasingly includes:· stablecoins - fiat-backed or algorithmically stabilised digital currencies such as USDC or EURS that function as cash equivalents but move instantly across blockchain networks.

· tokenised deposits - bank-issued digital representations of customer deposits, enabling programmable transactions and near-instant settlement while remaining fully regulated.

· tokenised real-world assets (RWAs) - fractional digital ownership of tangible items such as commercial property, fine art, government bonds or even renewable energy credits, recorded immutably on a blockchain.

These co-exist alongside more traditional ‘personal’ digital assets such as domain names, online accounts, photos, healthcare records and videos and cloud storage content items that may have sentimental as well as monetary value. The inheritance challenge is magnified because, unlike traditional property or even a standard bank account, many digital assets are self-custodied, i.e. accessible only to the person holding the private keys or passwords. Without them, ownership can be impossible to prove and recovery impossible to achieve. Hence, the single greatest technical obstacle in inheriting digital assets is access. A safety deposit box might be opened with a court order; a blockchain wallet, however, cannot be unlocked without the correct cryptographic keys and/or passwords. Tokenised deposits, funds and RWA holdings may be slightly easier, if held through regulated platforms, but they can still present problems. Many platforms enforce strict two-factor authentication tied to the owner’s device. If the device is lost, or if SMS codes are sent to a deactivated phone number, executors can be locked out. Another barrier lies in the terms of service of digital platforms - some explicitly forbid third-party access, even to executors, without prior authorisation from the original account holder. A court order may be required but, if the company is located in another jurisdiction, compliance can be slow or non-existent. Hence, it is not only about high-value assets - tokenised shares in a family-owned property, stored on a niche blockchain platform, may hold sentimental as well as financial importance. If an heir cannot navigate the platform’s technical interface or pass identity checks, the asset may effectively vanish from the estate.

Moreover, digital asset inheritance operates in a legal patchwork. Some jurisdictions have updated their probate and property laws to explicitly include digital assets; others remain silent on the matter. The result is a global inconsistency that complicates cross-border estates. For instance, certain US states have enacted versions of the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), granting executors the right to access digital accounts if authorised in the will. But even within these states, private companies can impose additional requirements or resist access on privacy grounds. In the UK, the Property (Digital Assets) Bill aims to formally recognise digital assets as property which will make executors’ jobs easier when dealing with courts. In Europe, the General Data Protection Regulation (GDPR) can sometimes be interpreted to restrict the transfer of personal digital data to third parties, even legal heirs, without explicit consent from the original owner before death. But in emerging markets where tokenised assets are proliferating, there may be no legal recognition of such assets at all, leaving heirs with no enforceable claim. This is especially relevant for tokenised RWAs held across multiple jurisdictions. For example, who would govern the inheritance of a tokenised apartments in Paris listed on a Singaporean platform, owned by a resident of Kenya? The answer may be a complex and costly legal battle. Notwithstanding this, however, the concept of a “digital executor” (someone appointed specifically to manage and transfer digital assets) has begun to gain traction - although, without consistent global standards, even this role can be hampered by conflicting laws and platform rules.

The answer is to plan ahead and create a digital asset inventory, a secure document describing all digital holdings from stablecoin wallets to tokenised property accounts, with access instructions being essential. This should provide the platform name, asset type and authentication instructions, along with the relevant passwords and methods of access, although, because a will becomes public during probate, the inventory of assets should not include secret keys or passwords. These credentials can be maintained offline on an encrypted USB drive or safety deposit box with a will reference. Certainly, major platforms offer legacy access options and there are already services that can be of help: Google’s Inactive Account Manager can transfer account management after inactivity and Apple's Legacy Contact, after death, allows specified persons access iCloud data. Some blockchain-based custodial systems allow pre-approved contacts to authorise account transfers, e.g. MetaMask's social recovery solution and Argent's Guardian system.

However, as technology and asset portfolios change, estate planning still needs be regularly revised. A stake in a niche RWA platform now may be moved to another chain tomorrow and regular evaluation prevents heirs from pursuing obsolete access instructions. Moreover, digital assets are harder to appraise for inheritance than traditional property; tokenised deposits may collect interest, and tokenised RWAs can appreciate or depreciate fast depending on market circumstances. Valuation dates also key in regulated settings - a tokenised bond may be valued $100,000 upon death but $95,000 or $105,000 at estate settlement. Furthermore, changes in valuation will impact inheritance tax liabilities and beneficiary expectations, as indeed is the case for non-digitised assets today. Unsurprisingly, taxes vary significantly - inherited digital assets may be liable to capital gains tax when sold, or inheritance or estate taxes based on death value. Double taxation treaties or their absence can complicate cross-border estates and assets on decentralised networks without issuers can be particularly problematic. Proving asset ownership and value for tax purposes is difficult without proper paperwork hence accurate recordkeeping and platforms with verifiable transaction histories are crucial.

So, whilst much of the discussion around digital asset inheritance is technical or legal, it can also be deeply human. The loss of a loved one is a time of grief, therefore navigating complex, unfamiliar digital systems can add emotional strain to the process. For some, inheriting digital assets may feel similar to stepping into an alien financial world. A beneficiary comfortable with real estate deeds may be bewildered by a tokenised property platform’s dashboard and, without guidance, valuable assets can go unclaimed or be sold hastily at disadvantageous terms. Therefore, clear communication during life can ease this burden - explaining to heirs, not only what assets exist, but why they were chosen, how a stablecoin holding protects against inflation, or how a tokenised bond fits into a diversification strategy, can empower them to manage these assets wisely. The coming decade will likely bring more formalised frameworks for digital asset inheritance. Regulators are beginning to recognise that the tokenisation of money and assets is not a niche phenomenon but a structural shift in finance. We may see standardised global protocols for transferring tokenised deposits upon death, integrated directly into banking systems. Smart contracts could execute inheritance instructions automatically, releasing assets to designated beneficiaries upon receipt of verified death certificates. Platforms handling tokenised RWAs may embed inheritance modules, allowing owners to set multi-tiered succession plans, primary heirs, secondary heirs and conditional allocations all enforced by blockchain logic; these systems could reduce the risk of disputes and ensure assets remain productive during the transition. Still, technology alone will not solve the problem. As long as access to assets depends on secure authentication, the human factor trust, foresight and communication will remain central.

Without doubt, digital money and tokenised assets have redefined ownership in the 21st century. They offer speed, accessibility and flexibility unimaginable in the paper-based systems of the past. Yet these benefits come with a profound responsibility: to ensure that this wealth is not lost at the moment it matters most. Planning for digital asset inheritance is not just about securing value; it is about preserving intent; it is ensuring that the stablecoins intended for a grandchild’s education fund are actually received, that the tokenised share of a family property remains in the family, that no part of a life’s work vanishes into the digital void. The path forward blends legal foresight, technical literacy and human empathy. As digital assets become an ordinary part of ordinary lives, estate planning must evolve accordingly so that the ‘internet of value’, similar to the tangible wealth before it, can be passed from one generation to the next.

This article first appeared in Digital Bytes (26th of August, 2025), a weekly newsletter by Jonny Fry of Team Blockchain.