Got Cryptocurrency or NFTs? They Need to Be in Your Estate Plan

bit coin wallet

by: Tracy Craig, Fellow, ACTEC, AEP®Emily Parker Beekman

original article written May 23, 2022

Handled incorrectly, these popular assets could go poof. You need a password-sharing plan, a plan for naming beneficiaries and possibly a trust.

Cryptocurrencies and non-fungible tokens (NFTs) are becoming a bigger part of the investment world as more and more people buy these assets. It is important to take these digital assets into account in your estate plans so they will pass to your loved ones at death, just like more traditional assets.  Crypto and NFTs, however, can present challenges to securing, transferring, protecting, and gifting family wealth.  New strategies are evolving to address this growing demand for family planning and tax planning with these types of assets.

There are currently many different cryptocurrencies and NFTs.  Right now, the top cryptocurrencies are Bitcoin, Ethereum, Binance Coin, Tether and Solana, and they make up a large part of the trillion-dollar market value.  An NFT is a unique, collectible, tradable digital asset on the blockchain, sort of like digital art, a photo, or a video game avatar, that can only be purchased on an NFT marketplace through a bidding process.  For example, you can purchase virtual land and real estate in the form of NFTs.  In November 2021, someone paid $450,000 to be Snoop Dogg’s neighbor in the metaverse (If you mentally replace the phrase “the metaverse” in a sentence with “cyberspace.” Ninety percent of the time, the meaning won't substantially change. That's because the term doesn't really refer to any one specific type of technology, but rather a broad (and often speculative).  Sales of NFTs jumped to more than $17 billion in 2021, demonstrating a growing desire for these collectibles.

Track Your Cryptocurrency and NFTs

Cryptocurrency is accessed through a private key, which is a series of alphanumeric characters known only to the owner and stored in a digital wallet or in cold storage. Whoever has the private key can buy, sell, and use the digital currency.  Your family or trustee must know that the cryptocurrency exists, where to find the assets, and what to do with them.  One option is to share the seed phrase and private keys with your trustee.  Another option for safe tracking is to place your crypto-assets and NFTs in custody, like a software application or hardware wallet.  Companies offering digital-asset custodian services include Coinbase, BlockFi, Casa, Unchained Capital, Anchorage and Genesis.  A third more old-fashioned option is to make a schedule of your digital assets for your fiduciary and list the login protocols for each account on whatever cryptocurrency exchange you use.

Similarly, NFTs can only be accessed with a password or personal key.   Like crypto, your passcode or personal key must be shared with your trustee in order for it to be passed down.  A digital legacy (an organized, updated list of your digital assets and the relevant related information and passwords a trustee will need to access them) can be a good place to keep this information.

Ultimately, you need to be sure that the details of the ownership of the NFT and cryptocurrency, including the private keys and passwords to access the digital wallets, are accessible to the fiduciary – otherwise, the cryptocurrency and NFTs could be lost forever.

Cryptocurrency, NFTs and your Estate Plan

It is currently difficult to open cryptocurrency accounts and NFTs in the name of a revocable or irrevocable trust.  However, wallets do exist that allow you to open an account in the name of a trust, or you can try to name a trust as a beneficiary of your account.  This option is only available if the company handling your account allows it.  As of the time of this article, our clients have generally been unsuccessful in naming beneficiaries for crypto accounts.  It is likely that the ability to name a beneficiary will evolve rapidly and could soon be available.

If there is no trust account and no named beneficiary, t

.  You should make sure that your will, trust and durable power of attorney include digital asset powers for the fiduciary handling your estate.  It is also important to know if your state has adopted either the Uniform trustee Access to Digital Assets Act (UFADAA) or the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).  Of the 50 states, 46 have adopted one of these two laws.  UFADAA and RUFADAA make it easier for your loved ones to manage your digital assets both during incapacity and after death.


The estate planning and tax issues surrounding NFTs, and cryptocurrency are complex and continue to evolve.