Understanding Digital Assets

‍

As daily life becomes increasingly digital, the fiduciary industry has yet to fully address how clients’ digital footprints should be safeguarded. These digital items may hold significant financial value as well as deep emotional importance, capturing years of memories, milestones, and connections. My own interest in technology recently led me to complete a course focused on digital assets which are broadly defined as any electronically created and stored item that carries identifiable value. 

‍

Gibraltar has played a leading role in digital ledger technology (DLT) regulation, but what strikes me most is how under-discussed digital legacy planning remains. The scope of digital assets – and how to protect them – is vast, and yet rarely explored in depth, prompting the reflections that follow.

‍

Preserving Digital Memories: Why Estate Planning Must Evolve

‍

Our lives are no longer contained in photo albums or filing cabinets. Today’s memories and assets range from family photos to monetised YouTube channels and live online: in clouds, on social platforms, and within countless digital accounts. They form an important part of personal identity, yet most estate plans still overlook them. Ignoring this area can lead to painful losses, disputes, and the disappearance of both sentimental and financial value. 

‍

What falls under the umbrella of “digital assets,” and why must they form part of modern legacy planning?

‍

In their broadest sense, digital assets include:

‍

• Content Platforms: YouTube, Instagram, blogs, and other monetised channels
• Personal Media: Photos and videos stored on devices, externally or in the cloud
• Communication Records: Email accounts, archived messages, calendars
• Access Credentials: Passwords, authentication codes, password manager vaults
• Financial Digital Assets: Cryptocurrency wallets (holding for example Bitcoin or Ethereum), NFTs, and digital collectibles held on blockchain platforms

‍

The Risks of Neglect

‍

Where digital assets form part of an estate, failure to plan properly can lead to the permanent loss of wealth or irreplaceable memories. Loved ones may face account lockouts, inaccessible crypto wallets, or legal uncertainties due to unclear ownership rights and platform terms of service. Valuable NFTs or monetised channels may simply vanish because no one has the authority to access or maintain them.

‍

An example of what can go wrong is the 2018 case of the late Gerald Cotten, CEO of QuadrigaCX. His will authorised access to his digital assets but the absence of correct passcodes prevented his executor from recovering cryptocurrency then valued at close to US$200m, much of it owed to clients.

‍

Building a Digital Asset Legacy Plan

‍

A digital asset legacy plan aims to ensure continuity, clarity, and security for those who will eventually manage the assets. The first step is to create a comprehensive inventory of digital accounts and assets, including social media, cloud services, email, and monetised platforms. Once completed, access should be secured using password managers and encrypted vaults and possibly multi-factor authentication for all critical accounts. Wills or trust deeds should explicitly address if digital assets are to be included, together with the appointment, where necessary, of a “digital executor” empowered to manage and ultimately distribute digital wealth reducing uncertainty for beneficiaries and service providers.

‍

Succession Strategy

‍

Succession plans for digital assets should be as detailed and deliberate as those for physical property. They might include instructions on whether income-generating channels should be maintained, or whether NFTs and other blockchain-based assets should be transferred or liquidated. Personal accounts, such as social media profiles, may require decisions about whether they should be deleted or “memorialised.”

‍

These plans must respect relevant GDPR and data protection laws, together with the terms of service applicable to each platform or cryptocurrency exchange. As clients’ digital footprints evolve far more rapidly than traditional asset portfolios, digital succession plans should be reviewed more frequently. An annual review may no longer be sufficient.

‍

Final Thoughts

‍

Digital assets continue to evolve at speed, attracting growing regulatory attention. Gibraltar’s framework, including the Financial Services (Distributed Ledger Technology) Regulations and the Proceeds of Crime Act 2015, has helped position the jurisdiction at the forefront of responsible digital asset oversight. This regulatory structure provides trustees with increased confidence when managing digital holdings that are reshaping the fiduciary landscape.

‍

For Gibraltar TCSPs, the opportunity lies in combining digital literacy with longstanding principles of trust and corporate governance. By doing so successfully, we can offer clients, who should not underestimate the value or complexity of digital assets, peace of mind in an increasingly digital world. TCSPs have an increasingly important role in helping clients manage, secure, and structure their digital wealth, ensuring it can be passed on safely and effectively. 

‍

For further information or a no-obligation discussion about how Acquarius can assist with protecting digital asset portfolios within a Gibraltar trust or corporate structure, please get in touch.