Cryptocurrency in Estates and Trusts

Gabriel Katzner - November 30, 2023 - Estate Planning

Digital assets such as cryptocurrency and non-fungible tokens are increasingly important when estate planning. Unlike physical assets, cryptocurrency, with its decentralized and borderless nature, presents unique challenges but also opportunities for people looking to secure and maximize their wealth and pass it on to future generations.

The cryptocurrency market is estimated to exceed $3 trillion. This is roughly quadruple its 2020 year-end value. This is an amazing gain when considering that cryptocurrency digital assets have only existed for a little more than a decade.

The decentralized nature of cryptocurrency and its lack of regulatory oversight presents estate planning challenges. Work with your estate planning attorney to ensure that your digital assets are safely and securely passed to your heirs.

What is cryptocurrency?

Cryptocurrency is a digital asset that is created and traded only. The transactions are secured by cryptography or the use of encrypted algorithms and other techniques to safeguard the currency.

A single party or organization does not control cryptocurrencies. Instead, they operate on a decentralized ledger technology called a blockchain. This unique technology allows for anonymity while also ensuring that a community agrees with all transactions.

What are the benefits of including cryptocurrency in estate planning?

While cryptocurrency is a newer asset, it offers several advantages.

Privacy and security

Cryptocurrency transactions are anonymous and can offer a level of privacy that transferring traditional assets cannot.


Investing in cryptocurrencies can diversify your wealth and reduce your risk. The cryptocurrency market and the traditional financial markets often move independently.


Cryptocurrency is taxed as a property. This makes tax treatment for cryptocurrency easier to manage than other investments.

What are the challenges in managing cryptocurrency in estate planning?

Since cryptocurrency and other digital assets do not have a physical record, it is essential to include them in your estate planning documents. Your heirs may not realize you own these digital assets unless you disclose their existence.

Cryptocurrency is stored in a digital wallet, either online or offline in an external hard drive. Where cryptocurrency is stored can impact how it is defined, whether as personal property (offline) or an investment account (online).

When including cryptocurrency in your last will and testament, include the following important information:

  • A list of all cryptocurrencies and other digital assets you own.
  • A description of how these digital assets will be distributed among your heirs.
  • A list of all digital wallets that contain these digital assets.
  • A memorandum referring to another document containing all usernames, passwords, and PINs. This memorandum should be given to a trusted person and not included in your will. Your last will and testament will be public upon your death.
  • A guide to how to access your cryptocurrency, because many people are unfamiliar with this technology. You may also want to describe how to sell your cryptocurrency and convert it to cash.

To access your cryptocurrency, your heirs will need to understand how to access your digital wallet and have access to your public and private keys. Without access to your keys, your cryptocurrency may be lost forever. Stefan Thomas, Matthew Mellon, and Matthew Moody are three examples of people who made cryptocurrency investor mistakes.

Does cryptocurrency go through probate?

Yes, if your cryptocurrency is listed in your will, it will go through probate, along with your other assets and accounts.

Another estate planning option is to fund a trust with your cryptocurrency. This has many advantages, including avoiding the lengthy, public, and potentially costly probate process.

Using a trust, you can provide detailed information about your cryptocurrency and instructions on managing it. However, since trading cryptocurrencies is a speculative investment, your trustee may have restrictions on how to manage your cryptocurrency. Many fiduciaries are unequipped to handle the security and volatility of cryptocurrency.

If your trust documents are digital, be mindful of digital security. Keep your usernames and passwords on a separate document in a safe or safe deposit box. More than one copy can help ensure your assets are accessible. Update your account information regularly, especially if you are an active trader.

Speak to a trusted advisor to help you develop your digital estate plan. Contact us and schedule a call with us at 855.631.3457 to learn more about how to protect those most important to you.

Gabriel Katzner

In 2002, Gabriel Katzner, the founding partner of Katzner Law Group received his Juris Doctorate with honors from the Fordham University School of Law. After spending the first 7 years of his legal career
practicing at Cahill Gordon & Reindel LLP, an international law firm based in New York, he went on to found his own firm.

Gabriel Katzner has a track record, along with a vast number of
outstanding public reviews across platforms, of working hard on behalf of individuals who need assistance with comprehensive
estate planning services. Finding a lawyer who is knowledgeable about revocable and irrevocable trust planning, guardianship for minor children, asset protection, trust administration and probate,
as well as Medi-Cal / Medicaid planning is extremely important.

Years of experience: More than 17 years
Location: San Diego, CA


This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. Furthermore, it has received approval from attorney Gabriel Katzner, an experienced estate planning lawyer with over 17 years of legal expertise.

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