The Fading Fortune: Ensuring Digital Legacy in Estate Planning

Digital Assets Transform Estate Planning and Inheritance Disputes in India

As Indians increasingly invest in cryptocurrencies, NFTs, online investment accounts, cloud storage and monetised social media platforms, legal experts warn that digital assets are rapidly transforming estate planning and inheritance disputes in the country. Unlike traditional assets such as property, bank deposits or jewellery, digital holdings often exist behind passwords, private keys and platform-specific privacy rules, creating major challenges for families after the death of the asset owner.

The absence of clear succession instructions, login credentials or dedicated legal frameworks is leading to rising uncertainty around ownership, access and valuation of such assets. Tushar Agarwal, Founder & Managing Partner, C.L.A.P. JURIS, Advocates & Solicitors, notes that digital assets are fundamentally changing the nature of succession because ownership in the digital ecosystem is often invisible, decentralised, and access-driven rather than document-driven.

Families struggling to access digital wealth face formidable barriers in establishing both ownership and accessibility. Tushar Kumar, Advocate, Supreme Court, explains that password protection, multi-factor authentication, private encryption keys, platform confidentiality obligations and restrictive user agreements frequently render digital holdings inaccessible notwithstanding undisputed familial entitlement.

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The issue becomes more complicated when there is no will or succession plan in place. Experts note that heirs may have to approach courts for probate, succession certificates or letters of administration merely to establish authority over online accounts and digital assets. Varun Kalsi, Director, Private Client at Cyril Amarchand Mangaldas, points out that existing succession laws were drafted decades before digital assets became mainstream.

Cross-border platforms complicate disputes further as many online platforms, crypto exchanges and cloud service providers operate outside India and are governed by foreign laws. A digital asset may belong to an Indian resident but be stored on overseas servers or managed by foreign companies with their own privacy and succession policies. This creates uncertainty regarding jurisdiction, enforceability of Indian succession orders and taxation.

Sadia Khan, Partner at Shardul Amarchand Mangaldas & Co., notes that Indian succession laws were framed when property was largely physical and tangible. While jurisdictions such as the United States, Australia, Italy and Germany have pivoted towards recognising digital assets in inheritance framework, India still lacks a dedicated statutory guideline to deal with digital succession and posthumous access rights.

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Lawyers say the growing risks associated with digital inheritance are making digital estate planning an essential part of wealth management. Experts recommend that individuals explicitly include digital assets in wills, maintain updated inventories of online holdings and securely preserve login credentials and recovery information. They also advise appointing trusted digital executors who can coordinate with platforms and heirs after death.

To ensure smooth transfer of digital assets to heirs, platforms should provide features such as 'Legacy Contact' or nominee-based access, and succession tools should provide clear instructions regarding how certain digital accounts are to be handled, including whether accounts are to be memorialised, closed, transferred or continued.