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Estate Planning for Cryptocurrency

As an estate planning lawyer in Folsom, I have found that in recent years cryptocurrency has become a larger part of some clients’ holdings. These holdings take the form of Bitcoin or other cryptocurrencies. Although not a major part of most clients’ holdings, it is nonetheless important to understand how estate planning works in this context. 

Estate planning for cryptocurrency is a crucial aspect of managing your digital assets, ensuring they are properly managed and transferred to your heirs or beneficiaries in the event of your incapacity or passing. Here are steps and considerations for estate planning involving cryptocurrencies:

  1. Create or Update a Will or Living Trust:
    • Include provisions for your cryptocurrency holdings in your will or trust document. Clearly specify how you want your cryptocurrencies to be distributed, who should receive them, and any conditions or restrictions on their use.
  2. Appoint an Executor or Trustee:
    • Designate an executor (if you have a will) or trustee (if you have a trust) who is knowledgeable about cryptocurrencies or can work with experts to manage these assets.
  3. Inventory and Document Your Holdings:
    • Create a detailed inventory of your cryptocurrency holdings, including wallet addresses, private keys, and passwords. Store this information securely and inform your executor or trustee about its location.
  4. Use Hardware Wallets or Cold Storage:
    • Consider storing cryptocurrencies in hardware wallets or cold storage solutions to enhance security. These offline methods are less vulnerable to hacks or loss due to technical issues.
  5. Use Multi-Signature Wallets:
    • Multi-signature wallets require multiple private keys to authorize transactions. This can be a safeguard against unauthorized access, as multiple parties must collaborate to manage the assets.
  6. Consider Cryptocurrency Estate Planning Services:
    • Some companies offer specialized cryptocurrency estate planning services, including secure storage and management of your cryptocurrency holdings, as well as the transfer of assets to your heirs.
  7. Name Beneficiaries in Accounts:
    • Some cryptocurrency exchanges and wallets allow you to name beneficiaries. Ensure that your beneficiaries are designated correctly to facilitate the transfer of assets.
  8. Encrypt and Secure Access:
    • Use strong encryption and secure methods to protect access to your cryptocurrency wallets and accounts. Provide instructions on how to access these assets in your estate plan.
  9. Inform Your Executor or Trustee:
    • It’s essential that your executor or trustee knows about your cryptocurrency holdings and where to find the relevant information. Consider providing them with detailed instructions.
  10. Regularly Update Your Plan:
    • Cryptocurrency markets are volatile, and your holdings can change significantly over time. Regularly update your estate plan to reflect your current cryptocurrency assets.
  11. Secure Your Estate Plan: Safeguard your estate plan and important documents with strong encryption and secure storage methods, such as digital vaults or safe deposit boxes.
  12. Consider Charitable Bequests: If you have a significant amount of cryptocurrency, consider including charitable bequests in your estate plan, as some charitable organizations may accept cryptocurrencies.


Estate planning for cryptocurrency is an evolving field, and it’s crucial to stay informed about changes in technology, regulation, and best practices for securing and transferring these assets. It’s advisable to work with professionals who understand the unique challenges and opportunities presented by cryptocurrencies to create an effective and secure estate plan. Specifically, it is important to understand the legal and tax implications of cryptocurrency. Consulting with a Folsom attorney experienced in estate planning to address regulatory issues and tax concerns is recommended. If you have any questions about estate planning for cryptocurrency, contact Thapar Law at 916-579-0605 or send us a message

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