Cryptocurrency Estate Planning in New York

I have sat across the desk from clients who confidently tell me they own a substantial amount of Bitcoin or Ethereum, only to realize during our planning session that no one else on earth knows how to access it. That gap is not a hypothetical risk. Cryptocurrency is different from every other asset class I handle in an estate plan, because there is no bank, brokerage, or government registry that can simply confirm ownership and hand over the funds when the owner dies. If the access information is lost, the asset is not merely difficult to recover; it is gone permanently, with no customer service line, no court order, and no probate proceeding capable of bringing it back. As a New York estate planning attorney, I wrote this guide to walk through exactly how cryptocurrency estate planning works under New York law, where the real dangers lie, and the concrete steps my clients take to make sure their digital wealth actually reaches their families.

Why Cryptocurrency Is Uniquely Dangerous to Lose Track Of at Death

Traditional assets leave a paper trail. A house is recorded with the county clerk. A brokerage account generates 1099 statements and appears on tax returns. A bank account is discoverable through mail, statements, or a simple inquiry once an executor is appointed. Cryptocurrency frequently leaves none of these breadcrumbs. Many holders access their coins through a smartphone app, a hardware wallet stored in a drawer, or a string of twelve or twenty-four words written on a piece of paper, and none of that generates a statement that arrives at the family home after death.

The danger compounds because cryptocurrency ownership is defined entirely by cryptographic control, not by a name on a title. Whoever holds the private key, or the seed phrase that generates it, controls the asset outright. There is no override. If a client dies and the only copy of a seed phrase is destroyed, misplaced, or simply unknown to the family, the underlying coins remain on the blockchain forever, visible but permanently unreachable. I have reviewed cases where a family strongly suspected a decedent held significant crypto value based on old emails or exchange confirmations, yet had no legal or technical way to recover it. That outcome is entirely avoidable with the right planning, but it requires deliberate steps taken well before death, not after.

Custodial Exchange Accounts Versus Self-Custody Wallets

Before building a plan, it is essential to understand that cryptocurrency holdings generally fall into two very different categories, and each raises separate legal and practical issues for an executor.

Custodial holdings are cryptocurrency held on a centralized exchange such as Coinbase, Kraken, or Gemini. In this arrangement, the exchange itself holds the private keys on the customer\u2019s behalf, similar to how a bank holds cash on a depositor\u2019s behalf. Because a custodial exchange is a company with a terms-of-service agreement, a compliance department, and a legal obligation to respond to properly documented requests, an executor with the right legal authority can generally contact the exchange, submit a death certificate and letters testamentary or letters of administration, and request that the account be liquidated or transferred to the estate or to named beneficiaries.

Non-custodial, or self-custody, holdings are the opposite. Here the individual holds the private keys directly, whether in a software wallet on a phone or computer, or in a hardware wallet such as a Ledger or Trezor device. There is no company to call, no customer service department, and no account number. Access depends entirely on possession of the private key or the seed phrase used to derive it. This distinction is the single most important concept in cryptocurrency estate planning, because the legal authority granted to an executor under New York law functions very differently depending on which category applies.

New York\u2019s RUFADAA Framework: EPTL Article 13-A

New York addressed the problem of fiduciary access to digital property when it adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which is codified in Article 13-A of the New York Estates, Powers and Trusts Law. EPTL Article 13-A gives executors, administrators, trustees, and agents under a power of attorney a legal framework for requesting access to a decedent\u2019s digital assets, including online accounts, email, cloud storage, and yes, custodial cryptocurrency exchange accounts, when that access is authorized by a will, trust instrument, power of attorney, or the platform\u2019s own online tool for designating a legacy contact.

Under EPTL Article 13-A, a custodian, meaning the company that holds the account, must generally provide a fiduciary with a catalogue of communications or, in some circumstances, the content of those communications, once the fiduciary presents the required documentation, which typically includes a certified death certificate and letters testamentary or letters of administration issued by the Surrogate\u2019s Court. This is exactly the legal tool that allows an executor to approach a custodial exchange like Coinbase and request that a decedent\u2019s account be transferred into the estate. Naming digital asset authority explicitly in a will or a revocable trust, consistent with the framework in digital assets estate planning under New York law, strengthens an executor\u2019s position when dealing with any custodian\u2019s legal or compliance team.

Here is the critical limitation every client needs to understand: RUFADAA and EPTL Article 13-A grant legal authority to demand access from a custodian. They do not, and cannot, grant the cryptographic key needed to unlock a self-custody wallet. A statute can compel a company to hand over an account. No statute can force open a hardware wallet protected by a twelve-word seed phrase that only the decedent knew. This is the single most misunderstood point in crypto estate planning, and it is why legal authority alone is never enough when self-custody is involved.

What an Executor Can and Cannot Do

To put the distinction in practical terms: if your holdings are entirely on a regulated exchange, your executor\u2019s path is comparatively straightforward, provided your will or trust grants the appropriate digital asset authority and your executor knows the accounts exist in the first place. Your executor will present the exchange with a death certificate and Surrogate\u2019s Court documentation, complete the exchange\u2019s estate or beneficiary transfer process, and the asset moves into the estate for distribution under the terms of your will or trust.

If your holdings are in a self-custody wallet, your executor\u2019s legal authority is real but functionally useless without the key. No Surrogate\u2019s Court order, no letters testamentary, and no provision of EPTL Article 13-A can extract a private key from a hardware device or reconstruct a seed phrase that was never recorded anywhere accessible to the fiduciary. This is not a defect in the law; it is an inherent feature of how cryptography secures these assets, and it means the entire burden of protecting self-custodied crypto shifts from the law to advance planning and secure information storage.

Practical Steps to Protect Your Cryptocurrency Legacy

Build a Secure, Attorney-Guided Asset Inventory, Kept Separate From Your Will

Your will becomes a public document once it is filed for probate in Surrogate\u2019s Court. Anyone can request and review it. For that reason alone, a seed phrase, private key, exchange login, or wallet PIN should never be written directly into a will or referenced by its actual value in any court-filed document. Instead, I work with clients to build a confidential inventory of digital holdings, listing what exists, which exchange or wallet type is involved, and where access information is securely stored, whether in a safe deposit box, an encrypted password manager, or with a trusted fiduciary services provider built for this purpose. The will or trust then references the existence of this inventory and grants the executor authority to access it, without ever exposing the sensitive access details in a public court filing. This approach dovetails with a broader estate planning checklist for New York residents that accounts for every category of asset, digital or otherwise.

Consider a Trust to Hold Cryptocurrency Directly

For clients with meaningful crypto holdings, I frequently recommend titling those assets in the name of a revocable living trust during life, rather than relying solely on a will. When cryptocurrency is transferred into a properly funded trust, the successor trustee already has both the legal authority and, if the trust is properly administered, practical access to continue managing or distributing the assets without waiting for a probate proceeding at all. This avoids the delay and public exposure of Surrogate\u2019s Court and gives a named, trusted individual a continuous role in safeguarding the private keys before and after incapacity or death. If you have not yet explored whether this structure fits your situation, our guide on how to set up a trust in New York explains the mechanics, and our estate planning practice page outlines how we integrate digital assets into a comprehensive plan.

Name a Technically Capable Executor or Co-Executor

Not every trusted family member is comfortable navigating a hardware wallet, a multi-signature setup, or an exchange\u2019s estate transfer process. I encourage clients to think honestly about whether their chosen executor has the technical aptitude to handle cryptocurrency, or whether it makes sense to name a co-executor, a tech-savvy family member, or a professional fiduciary with specific experience in digital assets, to work alongside a more traditional executor. The instructions you leave behind are only useful if the person receiving them can actually follow them under pressure, often while grieving and managing an unfamiliar legal process.

Never Put Seed Phrases or Private Keys Directly Into a Will

This point is worth repeating because I still see it done: a will is not a vault. It is filed with the court, it becomes part of the public record, and court staff, opposing parties in any dispute, and members of the public can request copies. Recording an actual seed phrase or private key in a will is roughly equivalent to publishing it online. The correct approach is always a reference to a separately maintained, secure inventory, updated whenever holdings change, and reviewed periodically with your attorney to ensure the access instructions still match reality.

Tax Basis and Reporting Considerations at Death

Cryptocurrency is treated by the IRS as property, not currency, for federal tax purposes, and that classification has real consequences for an estate. When a person dies owning appreciated crypto, the asset generally receives a step-up in basis to its fair market value on the date of death, which means beneficiaries who later sell the inherited coins are taxed only on appreciation occurring after death, not on the gain that accrued during the decedent\u2019s lifetime. Establishing that date-of-death value requires a clear, timestamped record of holdings and their market price, which is another reason a maintained inventory matters even beyond the access problem. Executors are also responsible for reporting estate assets accurately, and for ensuring any income, such as staking rewards or interest generated after death but before distribution, is properly reflected on the appropriate returns. For authoritative background on how digital assets are treated for federal tax purposes, the IRS digital assets guidance is a useful reference, though it does not substitute for coordinated advice from your estate planning attorney and tax preparer.

Frequently Asked Questions

Does New York law require my executor to have access to my cryptocurrency?

New York law, through EPTL Article 13-A, gives your executor the legal authority to request access to digital assets, including custodial cryptocurrency exchange accounts, once appointed by the Surrogate's Court. However, that legal authority only works against a company, such as an exchange, that can verify the request and hand over the account. It cannot force open a self-custody wallet, since access to those funds depends entirely on possessing the private key or seed phrase, which no statute can supply if it was never recorded and shared securely.

What happens to Bitcoin or Ethereum in a self-custody wallet if the owner dies without leaving access instructions?

If no one else knows the private key or seed phrase, the cryptocurrency remains visible on the blockchain but is permanently unreachable. There is no company to contact, no override process, and no court order capable of recreating lost cryptographic keys. This is why a secure, attorney-guided inventory of holdings and access information, kept separate from the will itself, is essential for anyone holding crypto in a self-custody wallet.

Should I put my seed phrase in my will?

No. A will becomes a public document once it is filed for probate in Surrogate's Court, and anyone can request a copy. Writing a seed phrase or private key directly into a will effectively publishes it. Instead, the will or trust should reference a separately maintained, secure inventory of digital holdings and access information, which the executor is authorized to consult without exposing sensitive details in a public filing.

Is it better to hold cryptocurrency in a trust rather than pass it through a will?

For many clients with meaningful crypto holdings, yes. Titling cryptocurrency in the name of a properly funded revocable living trust allows a successor trustee to manage or distribute the assets without waiting on a Surrogate's Court probate proceeding, and it keeps the details of those holdings out of the public probate record. It also gives a trusted, informed person a continuous role in safeguarding private keys, rather than transferring that responsibility only after death.

How does the difference between a custodial exchange account and a self-custody wallet affect estate planning?

Custodial holdings, such as cryptocurrency held on Coinbase or Kraken, function similarly to a bank account: the exchange holds the keys, and an executor with proper documentation and EPTL Article 13-A authority can generally request that the account be transferred or liquidated. Self-custody wallets have no company intermediary, meaning access depends entirely on the private key or seed phrase. Your estate plan needs to address both categories differently, since legal authority alone resolves the custodial case but does nothing for self-custody without secure, pre-arranged access information.