Crypto Estate Planning: Protecting Your Digital Assets for Heirs

When it comes to estate planning, cryptocurrency owners face a unique challenge. Traditional assets can be easily inherited by loved ones, but digital assets require both legal authority and practical access. According to Barry E. Janay, Esq., founder and CEO of The Law Office of Barry E. Janay, P.C., somewhere between 11% and 18% of Bitcoin gets lost permanently due to lost keys or owners dying without providing heirs with instructions on how to access it.

To avoid this fate, crypto owners should start by telling their estate planner about their digital assets. This is crucial because heirs can't open a cold crypto wallet without a private key. Janay advises creating an inventory of crypto assets and documenting what they are, where they're held, and how to access them.

It's also essential to keep private keys separate from estate documents. Placing passwords or seed phrases directly into wills or trusts can expose the crypto and lead to its loss. Rahn stresses the importance of backing up backups, whether that's secure physical storage or a safety deposit box.