How Digital Assets Cause Inheritance Disputes

Digital assets are an increasingly significant part of personal estates in England and Wales. These assets include online financial holdings such as cryptocurrencies, cloud‑stored content, monetised social media accounts, email records, domain names and other online property. Unlike traditional assets such as land or bank accounts, digital assets can present unique legal and practical challenges during probate and estate administration because of access issues, valuation complexities, and gaps in the legal framework. When these challenges are not addressed in estate planning, they frequently lead to inheritance disputes between executors, beneficiaries, and other interested parties.

This article explains how digital assets are treated under English law, why they cause inheritance conflict, how disputes are resolved, and what practical steps can reduce the risk of contested estates.

What Are Digital Assets for Inheritance Purposes?

Digital assets are rights or interests that exist in a digital or online form. Examples include:

• Cryptocurrencies and digital wallets (Bitcoin, Ethereum, NFTs);
• Online financial accounts and investment platforms;
• Email accounts and cloud storage holding sentimental or valuable data;
• Monetised social media accounts, websites and digital businesses; and
• Domain names, digital art and intellectual property.

Since 2 December 2025, digital assets such as cryptocurrencies have been formally recognised as personal property under the Property (Digital Assets etc) Act, allowing them to be inherited and enforced in legal disputes much like traditional property.

However, many types of digital property (for example accounts governed by platform terms of service) remain subject to separate contractual and technical rules that restrict access and transfer.

Why Digital Assets Cause Inheritance Disputes

1. Lack of Legal Authority and Access Issues

Even after probate has been granted, executors and beneficiaries often cannot access digital accounts because:

• Digital service providers require passwords, recovery phrases or legacy contact arrangements; and
• The Computer Misuse Act 1990 makes unauthorised access to digital systems an offence, limiting informal access to a deceased person's accounts.

If an executor is unaware of a digital asset or lacks access credentials, significant assets - including valuable cryptocurrency holdings or online business accounts - may be permanently lost, which can trigger disputes over why they were overlooked.

2. Identification and Disclosure Problems

Unlike bank accounts or land records, digital assets are often hidden or unrecorded. Without a comprehensive inventory of usernames, passwords, private keys and access methods, an executor may not know what assets exist.

Failure to disclose these assets in a will or in preparatory documentation can lead to:

• Beneficiaries claiming assets were intentionally hidden;
• Executors being accused of failing to administer the estate properly; and
• Family members initiating legal action to compel disclosure.

3. Valuation and Tax Disputes

Digital assets such as cryptocurrencies are notoriously volatile in value. Determining the value of these assets on the date of death is essential for:

• Accurate inheritance tax (IHT) reporting; and
• Fair distribution to beneficiaries.

Disputes can arise when beneficiaries disagree with the valuation method used, or when significant fluctuations between valuation and distribution result in unexpected tax liabilities or perceived inequity.

4. Platform Terms and Ownership Rights

Many online providers do not regard digital accounts as transferable property. Email accounts, social media profiles and streaming subscriptions are often “licensed” rather than owned, meaning:

• Executores may not have the legal right to transfer or continue the account; and
• Beneficiaries may feel wronged if sentimental or commercially valuable content is lost.

Disputes over whether a particular digital asset was intended to be part of the estate often require interpretation of both the will and the platform's terms, which can be a source of litigation.

5. Emotional and Sentimental Value

Digital assets often hold personal, emotional value (family photos, videos, correspondence). The loss of access to these assets can strain family relationships and lead to disputes between beneficiaries who disagree on how such content should be preserved, archived or deleted after death.

Legal Principles Governing Digital Asset Inheritance

Digital Assets as Property

The Property (Digital Assets etc) Act confirms that digital assets such as cryptocurrencies can be treated as personal property capable of being inherited and included in an estate. This legislative change aims to reduce disputes by clarifying the legal status of these assets.

Executors' Legal Duties

Executors are legally obliged to:

• Identify all assets of the deceased, including digital assets;
• Value those assets for estate accounts and IHT purposes; and
• Distribute assets according to the will or intestacy rules.

If executors fail to carry out these duties properly, beneficiaries may pursue claims through the civil courts for breach of duty or seek instructions to clarify how digital assets should be handled.

Contractual Limitations

Even where the law recognises digital assets as property, the terms of service agreements governing many online accounts may restrict transfer or access. These contractual rights can conflict with testamentary instructions and provoke legal argument over whether the asset was capable of passing under the will.

Procedures and Time Frames in Digital Asset Disputes

Probate and Estate Administration

Managing digital assets typically forms part of the estate administration process after a grant of probate has been obtained. Executors should:

• Search for digital asset inventories;
• Contact service providers with appropriate documentation; and
• Seek specialist advice for complex assets such as cryptocurrency or online businesses.

Delays in securing access can cause probate delays and risk asset loss.

Claims and Legal Challenges

Disputes can lead to claims such as:

• Breach of executor duties in the civil courts;
• Declarations about ownership or rights to access digital property; or
• Claims under the Inheritance (Provision for Family and Dependants) Act 1975 if a dependent argues they were left inadequately provided for because digital assets were overlooked or undervalued.

Statutory time limits, such as six months from the grant of probate for Inheritance Act claims, are critical to observe.

Practical Steps to Minimise Disputes

Including Digital Assets in Your Will

Testators should:

• Create a digital asset inventory listing accounts, digital holdings and access instructions;
• Provide clear testamentary instructions naming beneficiaries for significant digital property; and
• Authorise executors explicitly to deal with digital assets under the Computer Misuse Act 1990 to avoid allegations of unauthorised access.

Appointing a Digital Executor

Consider designating a digital executor - a person with relevant technical competency - either in the will or in an associated letter of wishes to assist the appointed personal representatives.

Secure Storage for Access Credentials

Passwords, private keys, two‑factor authentication details and recovery phrases should be stored securely (for example in encrypted password managers or safes), with instructions for executors about how to retrieve them.

Regular Review and Update

Digital assets change rapidly; wills and asset inventories should be reviewed periodically to ensure that new accounts, wallets or platforms are captured in estate plans.

Common Questions About Digital Asset Disputes

Do digital assets count for inheritance tax?
Yes. Digital assets such as cryptocurrencies are treated as part of the deceased's estate for inheritance tax purposes, and must be valued on the date of death.

Can executors access social media and email accounts?
Not automatically. Access depends on service terms and prior authorisation; most providers require specific instructions or legacy contacts.

What happens if an executor cannot find digital assets?
Hidden or inaccessible assets may be lost, and beneficiaries could dispute that oversight if it affects the distribution of the estate.

Key Takeaways

Digital assets are now recognised as part of modern estates in England and Wales, but they present unique legal challenges. Access restrictions, lack of statutory succession rules, valuation difficulties and platform terms can all give rise to inheritance disputes if they are not carefully managed. Executors have a duty to identify and realise digital assets, but access often depends on passwords and legacy planning. Clear wills, comprehensive digital inventories, appropriate authorisation, and digital executor appointments can reduce the risk of conflict and ensure that digital assets are inherited according to the deceased's wishes.