Blog

For many Californians, cryptocurrency has become another part of their investment portfolio. Whether you own Bitcoin, Ethereum, or another digital asset, one thing is certain: if your estate plan doesn’t account for it, your family could face significant challenges after your death.

Unlike traditional bank or brokerage accounts, cryptocurrency accounts often have no central authority to restore access if passwords, recovery phrases, or private keys are lost. In many cases, access to the cryptocurrency means ownership. Without proper planning, your digital assets could become permanently inaccessible.

Why Cryptocurrency Is Different

Your executor can usually locate your bank accounts, investment accounts, and real estate with relative ease. Cryptocurrency presents unique challenges because it may be stored:

• On a cryptocurrency exchange
• In a software wallet
• On a hardware wallet (sometimes called cold storage)
• In a self-custody wallet protected by a private key or recovery phrase

If no one knows these assets exist or how to access them, they may never become part of your estate.

Common Estate Planning Mistakes

We’ve seen people make several common mistakes with digital assets:

• Never tell anyone they own cryptocurrency.
• Storing recovery phrases in unsafe or inaccessible locations.
• Including passwords directly in a will, which may become part of the public record during probate.
• Failing to give a trustee or executor the legal authority needed to manage digital assets.
• Forgetting to update an estate plan after purchasing cryptocurrency.

What Should You Do?

If you own cryptocurrency, your estate plan should:

• Identify that digital assets exist.
• Authorize your trustee or executor to manage them.
• Include secure instructions for locating wallets and recovery information.
• Coordinate your trust and other estate planning documents with your digital asset inventory.
• Be reviewed regularly as your investments change.

Just as important, your access information should be stored securely, but not inside your will or trust itself.

Cryptocurrency Is Only One Type of Digital Asset

Many people are surprised to learn that digital assets include much more than cryptocurrency. Your estate plan may also need to address:

• Online financial accounts
• Digital payment platforms
• Reward points and loyalty programs
• Websites and domain names
• Cloud storage
• Social media accounts
• Digital photographs and family records

A comprehensive estate plan should consider both the financial and sentimental value of these assets.

Don’t Leave Your Family Guessing

Estate planning is about more than deciding who receives your assets. It’s about making sure they can actually access them.

As technology evolves, so should your estate plan. If you’ve invested in cryptocurrency or other digital assets since your documents were prepared, now is a good time to review your plan and make sure it reflects today’s realities. We’ve created a Cryptocurrency/Digital Asset Check List, feel free to download it  to ensure your digital assets are accounted for and can be accessed.

At Botti Law Group, Ltd., we help California families create estate plans that address both traditional and digital assets, providing greater peace of mind for the future.

Thanks for reading,
Christopher E. Botti, Certified Specialist in Estate Planning, Trust & Probate Law

This blog is for informational purposes only and does not constitute legal advice. Every situation is unique, and you should consult with a qualified attorney for advice regarding your specific circumstances.