Cryptocurrency is now an important asset for many people and families. Once considered a niche investment, it has become a common form of property and can make up a large part of someone’s wealth. Because of this, more people want to know if cryptocurrency can be part of an estate plan and what happens to it after death. The answer is yes; cryptocurrency can and should be included in a well-prepared estate plan. Still, digital assets come with challenges that don’t exist with traditional bank accounts, investments, or real estate. Without careful planning, cryptocurrency can be lost, become inaccessible, or end up in legal disputes, which can make things harder for your loved ones.
At Bernard Law P.C., we help clients across Suffolk County figure out how digital assets fit into their estate plans. For many people, cryptocurrency is a key part of their financial future. Whether you have Bitcoin, Ethereum, stablecoins, or other digital assets, it’s important to make sure these are included in your estate plan.
Cryptocurrency Is Property That Can Be Transferred Through An Estate Plan
Many people mistakenly believe that cryptocurrency is not covered by traditional estate planning rules. While it works differently from other financial assets, cryptocurrency is usually treated as property that can be passed on to beneficiaries.
Just like stocks, real estate, and other assets, cryptocurrency can be part of your probate estate or trust estate, depending on how you own it. A good estate plan will name who should get these assets and who can manage them if you become unable to do so or pass away.
The challenge is not whether cryptocurrency can be inherited. The challenge is ensuring that the individuals responsible for administering an estate can locate and access the digital assets. Unlike traditional accounts held at financial institutions, cryptocurrency is often secured through private keys, passwords, and digital wallets. If that information is unavailable, the assets may effectively become inaccessible regardless of the owner’s intentions.
For this reason, cryptocurrency planning requires more than simply mentioning the assets in a will.
New York Law Recognizes Fiduciary Access To Digital Assets
New York has adopted legislation addressing access to digital assets after death and during periods of incapacity. The Revised Uniform Fiduciary Access to Digital Assets Act is codified in Article 13-A of the New York Estates, Powers and Trusts Law.
Under New York Estates, Powers and Trusts Law § 13-A-2.2 and related provisions, executors, trustees, agents acting under powers of attorney, and court-appointed guardians may have authority to access certain digital assets and electronic records under specific circumstances.
These laws matter because many estates now include digital property. Cryptocurrency can be stored on exchanges, in digital wallets, or on other online platforms. Getting access to these assets usually depends on good planning and following the right legal steps.
Even if someone has legal authority, it can still be hard to access cryptocurrency. Exchanges and digital asset platforms often have their own rules for account access and verification. Estate plans should plan for these challenges so family members aren’t left to deal with them during a crisis.
Why A Will Alone May Not Be Enough
Many people assume that a will solves every estate planning concern. While a will remains an important document, cryptocurrency often requires additional planning considerations.
A will may identify who inherits cryptocurrency, but it generally does not provide the detailed instructions necessary to locate and access those assets. Publicly filing sensitive information through probate can also create security concerns.
For example, it’s usually not a good idea to put private keys or wallet details in your will, since probate records can become public. Instead, many people keep separate records about wallet access and account locations, and make sure trusted people know how to find this information.
The goal is to create a plan that balances accessibility with security. Beneficiaries must ultimately be able to access the assets, but sensitive information should not be unnecessarily exposed.
Trust Planning Can Help Protect Cryptocurrency Assets
For many clients, a revocable living trust may provide additional flexibility when planning for cryptocurrency.
Trust planning can allow assets to be managed privately without many of the public disclosure issues associated with probate proceedings. A properly drafted trust can designate successor trustees with authority to manage cryptocurrency holdings if the original owner becomes incapacitated or dies.
This can be particularly valuable when substantial digital assets are involved. Cryptocurrency values may fluctuate significantly, and administrative delays can create additional complications. A successor trustee with clear authority may be better positioned to manage those assets promptly.
Trust planning can also help families avoid some of the delays associated with probate administration. Every situation is unique, and the appropriate structure depends upon the nature of the assets and the client’s overall objectives.
Incapacity Planning Is Equally Important
Estate planning is not only about what happens after death. It is also about protecting yourself during your lifetime.
If you become incapacitated, someone may need authority to manage your cryptocurrency holdings. This is where a properly drafted Durable Power of Attorney becomes extremely important.
New York General Obligations Law § 5-1501B and related provisions establish the framework governing Powers of Attorney in New York. Depending upon the authority granted, an agent may be able to manage financial assets and address matters involving digital property.
Without appropriate incapacity planning, family members may face significant obstacles when attempting to access or manage cryptocurrency accounts. In some circumstances, guardianship proceedings under Article 81 of the New York Mental Hygiene Law may become necessary.
Many people spend considerable time planning how assets will be distributed after death while giving less attention to incapacity planning. Cryptocurrency owners should address both concerns.
Snowbirds Should Consider Additional Planning Factors
Because we frequently work with New York snowbirds, we understand the importance of coordinating estate plans across state lines.
Individuals who divide their time between New York and Florida often own property and maintain financial relationships in both states. While Florida has also adopted laws addressing fiduciary access to digital assets, multistate planning can still create additional considerations.
Questions regarding domicile, asset location, fiduciary authority, and estate administration should be addressed proactively. Cryptocurrency is inherently digital, but the legal administration of an estate remains governed by state law.
Coordinated planning helps ensure that cryptocurrency holdings are treated consistently within the broader estate plan and reduces the likelihood of confusion for surviving family members.
Cryptocurrency Should Be Part Of A Modern Estate Plan
As cryptocurrency ownership becomes more common, estate plans should evolve accordingly. Failing to address digital assets can create unnecessary risks for both owners and beneficiaries. Proper planning helps ensure that cryptocurrency can be identified, accessed, managed, and ultimately transferred according to your wishes.
A well-designed estate plan should address not only who receives cryptocurrency but also how fiduciaries will locate and administer those assets when needed. Taking these steps today can help protect your family and preserve valuable assets for future generations.
Cryptocurrency In New York Estates FAQs
Can Cryptocurrency Be Passed To My Beneficiaries After I Die?
Yes. Cryptocurrency is generally considered property that can be transferred to beneficiaries through an estate plan. However, proper planning is critical because beneficiaries must be able to locate and access the assets.
Should I List My Cryptocurrency In My Will?
Your estate plan should account for cryptocurrency, but many people avoid placing sensitive access information directly into a will. Because probate records may become public, separate planning strategies are often preferable.
What Happens If My Family Cannot Find My Wallet Information?
This can create serious problems. If private keys, passwords, or recovery phrases cannot be located, cryptocurrency may become permanently inaccessible. Proper record keeping is extremely important.
Can A Trustee Manage Cryptocurrency Held In A Trust?
Yes. A properly drafted trust can authorize a trustee or successor trustee to manage cryptocurrency assets according to the trust’s terms.
Does New York Law Address Digital Assets?
Yes. New York has adopted provisions governing fiduciary access to digital assets through Article 13-A of the Estates, Powers and Trusts Law.
Can An Executor Access My Cryptocurrency Exchange Account?
Potentially. The executor may have legal authority under New York law, but the exchange may require documentation and compliance with its internal procedures before granting access.
Do I Need A Power Of Attorney If I Own Cryptocurrency?
A Durable Power of Attorney is often an important component of cryptocurrency planning because it may allow a trusted individual to manage assets if you become incapacitated.
Can Cryptocurrency Avoid Probate?
In some situations, cryptocurrency may be held through a trust structure that avoids probate. Whether this approach is appropriate depends upon the individual’s circumstances and planning objectives.
Is Cryptocurrency Treated Differently Than Other Assets In Estate Planning?
The basic estate planning principles remain similar, but cryptocurrency presents unique practical issues involving security, access, and digital ownership.
Should Snowbirds Address Cryptocurrency Differently?
Snowbirds should ensure that cryptocurrency planning is coordinated with their broader New York and Florida estate planning strategies. Multistate issues can create additional considerations that should be reviewed carefully.
Call Our Hauppauge Estate Planning Attorney For A Consultation
Cryptocurrency presents unique estate planning challenges that many families do not discover until it is too late. Whether you own digital assets as part of a diversified investment portfolio or hold a substantial amount of cryptocurrency, proper planning can help protect those assets and ensure your wishes are carried out. At Bernard Law P.C., we help clients throughout Suffolk County create customized estate plans that address traditional assets, digital property, trust planning, incapacity planning, and snowbird estate planning concerns.
If you own cryptocurrency and want to ensure it is properly incorporated into your estate plan, Bernard Law P.C. can help. Our office is located in Hauppauge, New York, and we proudly serve individuals and families throughout Suffolk County.
Call our Suffolk County estate law lawyer at Bernard Law P.C. at (631) 378-2500 to schedule a free consultation and discuss how cryptocurrency, digital assets, trusts, and estate planning can work together to protect your family’s future.
