Bitcoin and Other Cryptocurrencies & Estate Planning

You have probably heard of (or even invested in) cryptocurrencies like Bitcoin, Litecoin, and Ethereum. For those that aren’t sure what I’m talking about, cryptocurrencies are a new kind of money that only exist digitally. While you can’t hold such currency at your local bank or buy gas or groceries with them (yet), these digital assets have real value. According to CoinDesk (, as of January 31st, a single Bitcoin was valued at $10,164.45. So, if these currencies have value, it stands to reason that they should be included in your estate plan, right? Well, yes, but it’s a little tricky!

One of the main facets of cryptocurrencies is that there is no centralized system for control or ownership. Also, cryptocurrency is meant to come with some level of anonymity, so no coin bears a specific title. Rather, each coin is assigned to two encrypted “keys” – a public key and a private key. The public key or public address is the information others would use to transfer their cryptocurrency to you. The private key – made up of some long combination of letters and numbers – is the key you would use to access and transfer your currency to others. So, as long as you hold the key, you can transfer your crypto-wealth to others, no problem!


But what if you die or become incapacitated?

This is the tricky part. For traditional assets, if you have already titled those assets to your trust, the successor trustee can manage those assets for you when you can’t – like if you become incapacitated or when you die. But how do you title cryptocurrency to a trust when it doesn’t really have title? Also, proper titling of an asset requires an understanding of the type of property it is. For example, title to the cash under your mattress is tied closely to possession, while cash in a bank account is tied directly to the account registration. Because cryptocurrency cannot be held in tangible form, establishing the title to it cannot be accomplished through possession of the actual asset. And, because it isn’t held in a formal account with an individualized account registration, establishing title cannot be accomplished that way either.

As noted earlier, the key in all of this may literally be just that – the key. We’ve all heard the saying, “cash is king.” Well, in the world of cryptocurrency, possession of the private key is king. Whoever holds that key, has access to the cryptocurrency. This can be problematic. On one hand, if you lose your key, you lose access (and thus ownership) of the cryptocurrency. On the other hand, if you store your key and later become incapacitated or die, an unintended “beneficiary” could get ahold of your key and take the spoils. And, because of the anonymity of the system, tracking down the person who took it could be a fruitless endeavor.

So, what should a crypto investor/owner do?

This is still a very new area for estate planning. So here is what I would suggest:

  • Put your key in a safe place, like you would any other item of value to you – in a locked safe or safety deposit box.
  • Include directions regarding your key in your will or trust using specific language about who should get access to the cryptocurrency (usually the trustee or personal representative) and who should receive the cryptocurrency. (While you might want to specifically mention the cryptocurrency and access to “the key”, DO NOT write the actual alphanumeric key in your documents. Instead make sure you tell the trustee or personal representative where the key can be found.)
  • Also, make sure your will or trust has language that authorizes the personal representative or trustee to access and manage your digital assets. (On a side note, if you live in Arizona and don’t have a will or trust that includes language that comports with Arizona’s version of the Revised Uniform Fiduciary Access to Digital Assets Act, be sure to give me a call.)
  • If you have a trust, make sure you transfer the rights to the currency to your trust. This is best done using an assignment of personal property.

In summary, if you have cryptocurrency, be sure to work with a competent estate planning attorney to make sure it is covered in your estate plan. We are always available to assist in this area!