How to Handle Cryptocurrency in Your Estate Plan: A California Guide (2025 Update)
- Linda Varga
- Jul 29
- 3 min read
Short Answer: To properly handle cryptocurrency in your estate plan, you must clearly document your holdings, securely store access information (such as private keys and passwords), and designate a trusted person or fiduciary to manage and distribute your digital assets according to your wishes. You should also address crypto in your will or trust and include it in your durable power of attorney and advance directive documents.
Why Planning for Cryptocurrency Is Critical
Cryptocurrency is not like traditional bank or brokerage accounts. If no one knows your passwords or private keys, your digital assets may become permanently inaccessible after your death or incapacity. Without proper planning:
Your heirs may never know your crypto exists.
Your digital wallet may be lost forever.
Valuable assets may be excluded from probate or trust administration.
Step-by-Step Guide to Including Cryptocurrency in Your Estate Plan
1. Inventory Your Crypto Assets
List all digital assets you own, including:
Bitcoin, Ethereum, and altcoins
Wallet locations (hardware, software, exchange accounts)
NFTs, DeFi investments, and staking assets
Clearly identify:
Where they are stored (e.g., Coinbase, MetaMask, Ledger, etc.)
The approximate value
Associated public wallet addresses
2. Securely Document Access Instructions
Cryptocurrency is only accessible with private keys or seed phrases.
Your estate plan should include:
A way to locate your seed phrase and passwords
Instructions stored in a secure place (like a safe, encrypted USB, or offline document)
Guidance on how to access, manage, and transfer the assets
⚠️ Never include your private keys directly in your will or trust—those documents become public during probate.
3. Use a Trust or Will to Direct Distribution
Your estate planning documents should:
Identify cryptocurrency as a specific asset
Name who will receive it and under what conditions
Appoint a trustee or executor who is comfortable handling digital assets
If your crypto is held in a revocable living trust, the trust should be named the owner of exchange accounts or hardware wallets (when possible).
4. Update Your Durable Power of Attorney
Include specific language granting your agent the authority to:
Access digital wallets and cryptocurrency accounts
Manage, sell, or transfer crypto
Retrieve private keys, seed phrases, or hardware devices
This protects you in case of incapacity.
5. Plan for Taxes and Volatility
Cryptocurrency is considered property by the IRS. Your plan should address:
Capital gains tax
Cost basis step-up at death
How to handle volatile markets during estate administration
Common Mistakes to Avoid
Failing to mention crypto at all in your estate plan
Relying solely on exchange accounts without backup access
Not updating your access instructions as your holdings change
Leaving access info in unsafe places (e.g., email or cloud storage without encryption)
FAQs
What Happens If My Heirs Can’t Access My Crypto Wallet?
They may never be able to retrieve your assets. Without access to your private keys, your funds are lost forever—even with a valid will or trust.
Can I Name a Digital Asset Executor?
Yes. In some states, you can name a separate fiduciary to handle digital assets specifically, including cryptocurrency.
Let Moravec, Varga & Mooney Help You Plan for Crypto
Our estate planning attorneys understand the complexities of digital assets and can help you:
Protect and document your cryptocurrency
Create or update your will, trust, and power of attorney
Ensure your digital legacy is preserved for the next generation
Contact us today to secure your cryptocurrency as part of a comprehensive estate plan.