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How To Handle Crypto And NFTs For Estate Planning

By Eric RosenbergPublished Jan 31, 2022 · Updated Nov 2, 2026 · 8 min read
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To pass on crypto and NFTs, your estate plan needs three things: a list of what you own and where, a secure way for your heirs to reach it without exposing your keys while you're alive, and legal documents that say who inherits it. Without access instructions, crypto in a wallet only you control can be lost for good, no matter what your will says.

Quick Take

  • Anyone with your seed phrase or private keys can take your crypto. Never write them into a will, which becomes a public record in probate.
  • US federal estate tax applies only to estates above $15 million per person in 2026, so most families' main tax issue is basis, not estate tax.
  • Heirs who inherit crypto get a "stepped-up" basis equal to its value at your death, which can erase years of built-up capital gains.

What A Crypto Estate Plan Includes

Your plan should cover four parts:

  1. An inventory: every exchange account, wallet, NFT and staking position, with enough detail to find it.
  2. Access instructions: step-by-step directions for reaching each asset, stored separately from the keys themselves.
  3. Legal documents: a will or revocable trust that names who gets your digital assets, and an executor or trustee who can handle them.
  4. Tax planning: how the assets will be valued, and whether gifting during your life or leaving assets at death makes more sense.

If you hold crypto in a hardware or software wallet, you know about seed phrases, private keys and exchanges. Ask yourself whether your spouse, parents or kids know any of it. If not, the plan has to teach them.

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Asset Access: How Heirs Get To Your Crypto

When someone dies with money in a bank, the family goes through probate and the bank releases the funds. Crypto in a self-custody wallet doesn't work that way. No company can reset the password, and a court order can't open a wallet without the keys.

Option How It Works Trade-Off
Sealed Instructions With An Attorney Or In A Safe Seed phrase or wallet details stored in a sealed envelope, released at death Simple, but whoever holds it has full access
Metal Seed Backup In A Safe Or Deposit Box Seed phrase stamped on steel, kept where your executor can reach it Survives fire and water, but a safe deposit box can be sealed at death in some states
Multisig Wallet Two of three keys needed to move funds, held by you, an heir and a trusted third party No single person can take the funds, but setup is harder
Inheritance Service Companies such as Casa hold a recovery key and release funds to named heirs Monthly or yearly fee, and you rely on the company
Exchange Account The executor sends the exchange a death certificate, court papers such as letters testamentary, and ID Easiest for heirs, but you don't hold the keys while alive
Bitcoin ETF Or Crypto IRA Held in a brokerage or IRA with a named beneficiary Passes outside probate, but you own a fund share or IRA, not the coins

A multisig wallet fits people with large holdings who don't want any one person, including an heir, to hold full access. Crypto IRAs, such as those in our crypto IRA rankings, and spot bitcoin ETFs in a brokerage account let you name a beneficiary, the same as any other retirement or brokerage account.

Why Not Put Keys In Your Will?

A will is filed with the probate court and generally becomes public. Anyone who reads it could take the crypto before your heirs do. Your will should name who inherits your digital assets and point to where the access instructions are kept, but never contain the seed phrase itself.

Most US states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which lets your executor or trustee manage your digital assets if your will or trust grants that power. Ask your estate attorney to include explicit digital asset language. That helps with exchanges and other custodians, though it can't open a self-custody wallet without the keys.

Tax Planning For Crypto And NFTs

Federal estate tax applies only above a high threshold. Under the One Big Beautiful Bill Act, the estate and gift tax exemption is $15 million per person for 2026, and $30 million for a married couple, indexed to inflation in later years, according to the IRS. Above that, the top federal estate tax rate is 40%, per the IRS estate tax page.

Twelve states and the District of Columbia have their own estate tax, and five states have an inheritance tax, with Maryland charging both. Some start far lower than the federal tax, such as $2 million in Massachusetts and $1 million in Oregon. If you live in one, check your state's threshold.

Step-Up In Basis: Gifting vs. Inheriting

The rule that matters for most families is the basis step-up. Under section 1014 of the tax code, an heir's cost basis in inherited property is its fair market value on the date of death. A gift during your life keeps your original basis.

Say you bought bitcoin for $5,000, and it's worth $100,000 when it passes to your child, who sells it right away:

Line Gift While You're Alive Inherited At Your Death
Your Original Cost $5,000 $5,000
Child's Cost Basis $5,000 (carries over) $100,000 (stepped up)
Sale Price $100,000 $100,000
Taxable Gain $95,000 $0
Federal Tax At 15% Long-Term Rate $14,250 $0

Gifts still have uses. You can give up to $19,000 per person in 2026 without filing a gift tax return, according to the IRS gift tax FAQs, and gifting can make sense for coins that haven't gained much or for heirs in the 0% capital gains bracket. Our crypto tax rates article has the 2026 brackets.

Valuation And Liquidity

The executor has to value every coin and NFT on the date of death. Coins with active markets are easy to value. NFTs and small tokens may need an appraisal. If an estate owes tax, heirs may also need to sell some crypto to pay it, so your instructions should say which assets to sell first.

Estate Planning Outside The US

  • United Kingdom: cryptoassets count toward inheritance tax, charged at 40% above the £325,000 nil-rate band, with extra allowances for a home passed to children or grandchildren.
  • Canada: there's no inheritance tax, but at death you're treated as having sold your crypto at fair market value, so capital gains tax is due on the final return, unless it passes to a spouse, per the Canada Revenue Agency.
  • Australia: there's no inheritance tax, and the heir generally takes over the deceased's cost base for crypto, paying capital gains tax only when they sell, per the Australian Taxation Office. Assets the deceased bought before Sept. 20, 1985 reset to market value instead.

Tools To Help Pass On Your Digital Assets

Password Manager

A password manager keeps your exchange logins encrypted behind one master password. Make sure a trusted person knows how to reach it in an emergency and how your two-factor authentication works. Many managers, including the open-source Bitwarden, have emergency access features that release your vault after a waiting period.

Physical Backups

A paper or metal record of wallet locations and seed phrases means nothing gets forgotten. Steel backup plates, such as the Billfodl, survive house fires that would destroy paper. Store the backup in a safe, separate from the instructions that explain what it is.

Hardware Wallet

You can restore your seed phrase to a second hardware wallet and keep it with your estate documents, or set up a multisig across several devices. Ledger and Trezor are among the most widely used hardware wallets. You can buy a Ledger device from Ledger's site.

Account Information

List every exchange account and wallet and what each holds. If you track your crypto for taxes, you may already have a list, such as an export from crypto tax software. Update it once a year.

What To Watch Out For

  • Scams after a death: grieving families are targeted by fake "recovery" services. Our article on common crypto and NFT scams explains the warning signs.
  • Single points of failure: one person holding the only copy of a seed phrase can lose it, or take it.
  • Outdated lists: an inventory from three years ago misses new wallets and closed accounts.
  • Exchange failures: crypto on an exchange that goes bankrupt can be tied up for years. Our crypto hacks tracker records recent failures.
  • State rules: probate, safe deposit box access and digital asset laws differ by state and country.

The Bottom Line

None of us enjoys thinking about it, but an estate plan is how your family ends up with your money, investments and other assets. If those assets include crypto and NFTs, the plan has to cover access as well as ownership. Write down what you own, decide how your heirs will reach it, and have an estate attorney put the legal pieces in place.

FAQ

What Happens To Crypto When You Die?

It passes under your will or trust like other property, but only if someone can reach it. Crypto on an exchange can be claimed by your executor with court documents. Crypto in a self-custody wallet is lost if no one has the keys.

Should I Put My Seed Phrase In My Will?

No. Wills become public records in probate. Name who inherits your crypto in the will and keep the seed phrase in a separate secure place, such as a sealed envelope with your attorney or a safe.

Do Heirs Pay Tax On Inherited Crypto?

Not when they inherit it, unless the estate is large enough to owe estate tax, which starts above $15 million per person in 2026. Heirs owe capital gains tax only on growth after the date of death, because their basis steps up to the value on that date.

Is It Better To Gift Crypto Or Leave It In My Estate?

For coins with large gains, leaving them in your estate saves heirs more income tax, because of the step-up in basis, unless the estate is large enough to owe estate tax. Gifting during your life passes along your original basis.

Can A Crypto Exchange Release Funds To My Family?

Yes. Major exchanges have processes for executors, generally requiring a death certificate and documents showing the executor's authority. Spot bitcoin ETFs and crypto IRAs can also name a beneficiary directly.

About the author

Eric Rosenberg, Contributor

Eric Rosenberg is a financial writer, speaker and consultant who follows crypto, NFTs and other new technology in personal finance. He holds a B.S. in finance and an M.B.A.

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