A growing number of Americans have invested in cryptocurrency. However, few have addressed digital money in their estate plans. This relatively new class of wealth needs to be addressed in a comprehensive estate plan, says a recent article from Finance Feeds, “Crypto Estate PlanninEstate Planning Attorney Fort Lauderdale | Good Shepherd Legalg: What Investors Need to Know About Digital Assets.”
Billions of dollars in Bitcoin and other cryptocurrencies have already vanished because owners lost their access information or became incapacitated or died without establishing a viable succession plan. Unlike traditional asset custodians, where institutions can verify identity, ownership and facilitate transactions, digital assets require control of a private key, a series of numbers and letters. Once it’s lost, there’s no help desk, no customer service and no way to recover funds.
Some investors have chosen to use a platform like Coinbase or trade cryptocurrency within a more traditional fund structure. However, direct blockchain assets are different.
Most states have adopted RUFADAA, the Revised Uniform Fiduciary Access to Digital Assets Act, which clarifies access rights for fiduciaries in case of an owner’s death or incapacity. This law was designed for digital accounts such as email, photos, videos and online retail accounts. RUFADAA does not address issues related to direct cryptocurrency access.
Crypto owners also need to deal with tax issues. The IRS has classified cryptocurrency as property and treated it as a traditional asset, like cash, stocks, or real estate. Inherited cryptocurrency assets usually receive a stepped-up cost basis, adjusted to fair market value on the day of death.
Estate planning attorneys advise clients who own crypto to take several steps to protect their investments. The first is creating an inventory that documents every crypto holding, including wallet types, exchange accounts and all login credentials.
Private keys, seed phrases and two-factor authentication codes are critical. Many recommend using old-school paper and pen because they can’t be hacked if stored in a secure location. Fiduciaries need explicit authority to access digital assets under a will, trust, or power of attorney. Estate documents should mention cryptocurrencies and digital property but never include account names or numbers. A digital executor who is fluent in this new asset class and can manage crypto accounts is necessary.
Recoverable living trusts may be used to hold assets, allowing cryptocurrency investments to bypass probate, provide continued management by a trustee and, as with any trust, offer privacy. When cryptocurrency assets are gifted to the trust, they must be separated from the grantor’s control to constitute a completed gift. The trustee will need to hold custody, and not the grantor.
Estate plans need to be reviewed at least annually and updated when significant changes occur. For cryptocurrency, this includes changing phones, switching password managers, adding a new crypto wallet, or starting a new income stream.
The intersection of estate planning law and technology is expanding, and the responsibilities for owning digital investments are growing. Failing to create and manage a cryptocurrency plan almost guarantees that wealth will be lost. Talk with your estate planning attorney to ensure that cryptocurrency and digital assets are included in your estate plan.
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Reference: Finance Feeds (April 4, 2026) “Crypto Estate Planning: What Investors Need to Know About Digital Assets.”
