United States: crypto estate planning guide

The US has no single "inheritance law": each state sets its own rules for wills, trusts, probate and intestacy, while the IRS handles federal estate, gift and income tax. Sections are tagged by level, so beginners can read the Beginner parts first and come back for the rest.

Printable companions: letter of instruction · US supplement · executor guide · inheritance checklist. Real example: the Matthew Mellon estate.

New in this guide: which document does what Beginner, how US exchanges handle a death and the executor's and trustee's duties Intermediate, small estates and transfer-on-death Intermediate, which states have enacted RUFADAA, small-estate limits in six states and survivorship in Texas and California Intermediate, Forms 706 and 1041 Intermediate Expert and two worked US scenarios Beginner Intermediate.

At a glance: the five things that matter most Beginner

1. A current will (and possibly a revocable trust) that mentions digital assets and gives your executor or trustee power to deal with them.
2. A durable power of attorney covering digital assets, so someone can act if you are incapacitated rather than dead.
3. A letter of instruction, kept separately and with no secrets in it, explaining what you hold, where the backups are, and who can help technically.
4. Records: cost basis, exchange accounts and wallet list, so your executor can value the estate and file tax returns.
5. A plan for practical access that no single person can abuse (e.g. multisig with a key held by your executor or a collaborative-custody provider) and that has been tested.

How the US treats crypto Beginner

• For federal tax, the IRS treats digital assets as property, not currency (IRS digital assets).
• For estate tax, the Form 706 instructions define digital assets as "any digital representations of value that are recorded on a cryptographically secured distributed ledger or any similar technology", expressly including NFTs, cryptocurrencies and stablecoins; they are reported on Schedule F (other miscellaneous property) (Instructions for Form 706).
• Crypto is part of your estate and passes by will, trust, beneficiary designation (where a provider offers one) or, if you have no will, under your state's intestacy rules.
• Estate tax must be paid in US dollars: the IRS states that digital assets are not accepted as payment (Form 706 instructions). An estate that is mostly crypto may have to sell to pay tax.
• Form 1040 (and, for estates and trusts, Form 1041) asks every year whether you received or disposed of digital assets.

Step 1 — Will or revocable living trust? Intermediate

1. Decide on a will-only plan or an RLT with a "pour-over" will.
2. If using an RLT, fund it: exchange accounts can often be retitled to the trust; for self-custody, document an assignment of the wallet's contents to the trust and design key access for the successor trustee (e.g. one multisig key).
3. Include a digital-assets provision referencing RUFADAA powers and authorising technical experts.
4. Keep seeds, passphrases and PINs out of the will and trust document.
5. Review after every big change: a new coin, a new wallet setup, marriage, divorce, children or a move to another state. A will that predates your crypto may not mention it at all (see Mellon).

Signing formalities vary by state

• The Uniform Probate Code model (§2-502) requires a will in writing, signed by the testator and by at least two witnesses; it also allows an alternative of acknowledgement before a notary, and recognises holographic (handwritten) wills without witnesses if the signature and material portions are in the testator's handwriting (UPC §2-502 text).
• Not every state follows the UPC: many do not recognise holographic wills, and few have adopted the notarised-will option (Colorado's version is an example: C.R.S. §15-11-502). A "self-proving" affidavit can make probate easier. Ask your attorney what your state requires.

Which document does what: will, trust, letter, power of attorney Beginner

Each document has a different job. The common mistake is to expect one of them to do everything, or to put secrets in the one that becomes public.

Printable: letter of instruction with the US supplement.

Step 2 — RUFADAA: what it does and doesn't do Intermediate

The Revised Uniform Fiduciary Access to Digital Assets Act (2015) has been enacted in the large majority of states, sometimes with local changes; a few states have their own statutes (Delaware, for example, has a separate Fiduciary Access to Digital Assets and Digital Accounts Act). Check the ULC's legislative report by state and your state code. It sets a three-tier priority for fiduciary access to accounts held by custodians (online service providers):

1. The user's choice in an online tool provided by the custodian;
2. Otherwise, directions in a will, trust or power of attorney;
3. Otherwise, the custodian's terms of service.

Which states have enacted RUFADAA? (checked 25 October 2026) Intermediate

The Uniform Law Commission's enactment map and bill list for the Revised Uniform Fiduciary Access to Digital Assets Act (data stated as at 24 October 2026, 23:06 UTC) record 49 enactments among the 53 jurisdictions it tracks (50 states, the District of Columbia, Puerto Rico and the US Virgin Islands). The table groups them by the year the ULC lists.

• "Enacted" can mean "with changes". The ULC records enactment of the act, not identical text. California is a good example: its version (Probate Code §870 onwards) has applied to wills, trusts and deaths from 1 January 2017, but originally covered only personal representatives and trustees. SB 1458 (Chapter 799, Statutes of 2024, approved 27 September 2024) added conservators and agents under a power of attorney, for conservators appointed and powers of attorney executed before, on or after 1 January 2025 (§§871–872, 879.1–879.3). That is why the ULC lists California under 2024.
• What it says about self-custody. As amended, California Probate Code §880(c) gives a fiduciary with authority over a decedent's or settlor's property a right of access to digital assets that are not held by a custodian, and §880(e) gives a fiduciary with authority over tangible personal property (for example a computer or a hardware wallet) a right of access to it and to digital assets stored in it, but both say they do not require a custodian to share passwords or decrypt protected devices (SB 1458 text). The law can confirm the executor's authority; it cannot recover a seed nobody wrote down.
• Not enacted does not mean no rules. In Delaware, Louisiana, Massachusetts and Puerto Rico, check the local statute and the custodian's terms; we have not verified what, if anything, Louisiana, Massachusetts or Puerto Rico provide instead.

How major US exchanges handle a death Intermediate

An exchange account is the easy part of a crypto estate: there is a company, a claims process and an account that can be frozen and transferred. What follows is what each exchange's own help page said on 24 October 2026; processes change, so check the current page.

Exchange processes cannot reach self-custody wallets, including an exchange's own self-custody app: for those, the heirs need the backup and your instructions. RUFADAA's tier 1 (an online tool) matters only where a provider offers one.

The executor's and trustee's duties, applied to crypto Intermediate

The IRS describes the personal representative's primary duties as collecting all the decedent's assets, paying the decedent's creditors and distributing the rest to the heirs or other beneficiaries (Publication 559). Trustees also have the investment duties in Step 4. In crypto terms:

• Collect and secure: find every account and wallet (the letter of instruction and records help), and move self-custody coins only under a written plan, with a witness, after a small test transaction.
• Keep estate property separate: recover to a wallet set up for the estate or trust, not to the executor's personal wallet, and record every transaction with date, amount, fee and transaction ID.
• Value and report: record date-of-death values with sources; the same values set the heirs' basis (see step-up) and feed Form 706 and Form 1041 (see below).
• Pay before distributing: creditors and taxes come first, and tax is payable in dollars.
• Account to beneficiaries: a written log of who held what, and when, protects the executor in any later dispute.

Step 3 — Durable power of attorney Beginner

• A durable financial power of attorney lets an agent act if you are incapacitated. Add explicit digital-asset authority (RUFADAA requires specific consent for content of communications).
• Pair with practical access (e.g. the agent holds one multisig key; a collaborative-custody provider supports agent access).
• Incapacity is often harder than death: there is no death certificate, and you may recover. Design access so the agent can act without being able to drain everything unnoticed (e.g. 2-of-3 multisig where the agent holds one key and a professional or second person another).

Step 4 — Trusts, trustees and the prudent investor rule Expert

Trustees in most states are bound by a version of the Uniform Prudent Investor Act. Section 3 says a trustee "shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying". Section 1(b) makes this a default rule that the trust document may expand, restrict or eliminate (UPIA text reproduced by the FDIC).

Irrevocable trusts (for estate-tax planning, asset protection or generation-skipping) raise further issues — gift-tax reporting on funding, the loss of step-up for assets moved out of the estate, and trustee key management. These need specialist advice.

Step 5 — Federal estate & gift tax Intermediate

Step-up in basis — very important for crypto

• Inherited property generally takes a basis equal to fair market value at the date of death (or the alternate valuation date, if elected) — whether or not a Form 706 is filed (IRS FAQ; IRC §1014). Heirs who sell soon after may owe little capital-gains tax.
• Lifetime gifts carry over the donor's basis (§1015) — gifting highly appreciated coins can cost heirs more tax than inheriting them.
• Executors should document date-of-death values per asset (exchange statements and reputable price sources, with time stamps).

Income tax reporting

• Brokers issue Form 1099-DA for digital-asset sales from 2025; cost-basis reporting by brokers begins for certain assets acquired from 1 January 2026 (IRS instructions). Self-custody activity still has to be tracked by you.
• Report sales on Form 8949 / Schedule D.
• An estate must file Form 1041 if it has gross income of $600 or more in a tax year (e.g. from staking rewards or sales during administration); the form includes its own digital-asset question (Instructions for Form 1041).

Lost or stolen crypto: what the IRS sources say Intermediate Expert

Chief Counsel Advice is written for IRS staff and "should not be used or cited as precedent", but it shows how the IRS reads the law. For the UK equivalent (losing a key is not a disposal; a negligible value claim may be possible) see HMRC CRYPTO22400 and the UK guide. Prevention is far cheaper than any deduction: see Safety.

Form 706 and Form 1041 basics Intermediate Expert

Most estates are far below the federal exclusion and file no Form 706, but may still face a state estate or inheritance tax with much lower limits (see the state table) and will often need Form 1041 if the estate earns income or sells assets at a gain.

Step 6 — State taxes and state variation Intermediate

Twelve states and the District of Columbia levy an estate tax and five states levy an inheritance tax (paid by or charged on recipients); Maryland has both. Exemptions are often far lower than the federal $15m. Figures below are as at 1 October 2026 according to the Tax Foundation — verify with the state revenue department before relying on them.

Inheritance-tax rates usually depend on the heir's relationship to you (close family are often taxed at 0%). Some states tax property located in the state even if you live elsewhere — mostly real estate and tangible property, but check how your state treats intangibles such as crypto.

Community property states

• Nine states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska, South Dakota and Tennessee offer an optional community property system (IRS Internal Revenue Manual 25.18.1; Publication 555).
• Crypto bought with earnings during the marriage may be community property even if only one spouse holds the keys, which affects what each spouse can leave by will.
• Survivorship in community property states: joint names alone do not always pass assets to the survivor. In Texas spouses can make a written community property survivorship agreement, signed by both, covering existing or future community property; it cannot be inferred merely from an account being joint or marked "JT TEN", the property stays community property during the marriage, and the transfer at death is not testamentary (Estates Code ch. 112, §§112.051–112.052, 112.151–112.152). In California, community property passes to the survivor without administration only if the transfer document expressly declares it "community property with right of survivorship" (Civil Code §682.1). A self-custody wallet has no title document, and we found no authority on how §682.1 applies to it; if you want jointly owned crypto to pass to your spouse, ask a lawyer in your state whether a written agreement, a trust or the will is the right tool.
• On the first death, IRC §1014(b)(6) can give the surviving spouse's half of community property a stepped-up basis too, not just the decedent's half — potentially valuable for appreciated crypto. Take advice on whether your holdings qualify.

Other state differences

• Probate procedures and small-estate affidavits vary widely; some states have streamlined procedures for smaller estates (see small-estate limits in six states).
• Transfer-on-death: some custody providers offer TOD beneficiary designations for accounts (e.g. Unchained); availability depends on state law and provider. Major exchanges do not offer one (exchange claims).
• Safe deposit boxes: rules on who may open a deceased person's box, and when, vary by state and bank. If a backup lives in a box, make sure your plan explains how an executor will lawfully get into it.
• Moving state can change the tax, community property and will-formality rules that apply. Review your plan after a move.

Small estates and transfer-on-death: can crypto skip probate? Intermediate

Small estate procedures. Every state sets its own limits and rules. The table below covers six large states. In California, for deaths on or after 1 April 2025, a successor can usually collect personal property with a small estate affidavit if the gross value of the decedent's California real and personal property (after statutory exclusions) does not exceed $208,850; the figures are adjusted every three years under Probate Code §890, with the next adjustment due on 1 April 2028 (Judicial Council of California). At least 40 days must have passed since the death, and the procedure cannot be used if a probate case is already open without the personal representative's permission (California Courts self-help). Coinbase lists an affidavit for collection or a small estate affidavit among the probate documents it accepts (Coinbase Help). Other states' limits differ: check your state court's self-help pages.

Small-estate limits in six large states (checked 25 October 2026) Intermediate

Each figure below is taken from the statute or the state court's own pages. Thresholds change (California's is re-indexed every three years and Illinois's rose in 2025), and the tests differ: some count all personal property, some exclude homes, vehicles or family allowances, and some need a court order rather than a simple affidavit. Check the current text for the date of death before relying on any of them.

• Crypto and valuation dates: a price swing can push an estate over a limit. Texas tests the value on the date of the affidavit; the other statutes word the test differently, so check which date applies. Keep dated valuation evidence (exchange statements or a recognised price source) for whichever date applies.
• Exchanges decide what they accept: Coinbase lists a small estate affidavit among the documents it accepts (exchange claims); other platforms may want letters from a court. The affidavit gives authority, not the keys to a self-custody wallet.
• Other states: we have not verified limits for the other 44 states and DC. Use the state's court self-help pages or code.

Transfer-on-death (TOD) and beneficiary designations. These let an account pass outside probate where the provider offers them. Coinbase, Kraken and Gemini each say they do not offer a beneficiary option (table above), and a self-custody wallet has no account provider to register a beneficiary with. In practice, the routes that avoid probate for crypto are a funded revocable living trust or a provider that offers an inheritance feature for its own vaults (for example Unchained), with availability depending on state law and the provider.

Step 7 — What your executor (personal representative) will do Beginner

Two worked US scenarios Beginner Intermediate

Illustrative only: the people and figures are invented to show how the rules on this page fit together, and are not advice. Real outcomes depend on the facts and on state law.

Common US pitfalls and community advice Intermediate

Real US case: the Matthew Mellon estate Beginner

US checklist

• Will (and RLT if appropriate) with digital-asset/RUFADAA language, signed with your state's formalities
• Trust funded; key-access design for successor trustee
• Durable POA with digital-asset authority
• Exchange online-tool designations completed (RUFADAA tier 1)
• Letter of instruction (no secrets) where executor will find it
• Cost-basis records exported; gifting vs step-up considered
• State estate/inheritance tax checked, including states where you own property
• Community property status of crypto reviewed (if married in a community property state)
• Trust retention/diversification powers reviewed with your attorney
• Liquidity for estate tax considered; copies of any lock-up or vesting agreements filed with estate papers
• Recovery path tested end-to-end with a small amount

Key sources: IRS digital assets · Instructions for Form 706 · IRS estate & gift tax · IRS estate tax FAQ · IRS Publication 559 · Uniform Law Commission · Tax Foundation: state estate & inheritance taxes 2026 · ABA: the digital executor (2026) · Coinbase: claim a decedent's account · Kraken: deceased client account claims · Gemini: beneficiaries · California: Probate Code §890 amounts · California Courts: small estate affidavit · IRS: About Form 1041 · 26 U.S.C. §1014.

Last reviewed: 23 October 2026 · Educational information only — verify current details with official sources.