Crypto & NFT Estate Planning: How to Protect Your Digital Assets

As digital assets like cryptocurrency and NFTs (non-fungible tokens) become increasingly popular, they’re playing a larger role in personal wealth. But unlike traditional assets like real estate or bank accounts, digital assets can be lost forever if not properly documented and included in an estate plan.

At East County Estate Planning, PC, we help individuals and families in Kirkland, Redmond, Bothell, Woodinville, Sammamish, and King County, Washington, as well as La Mesa, Santee, El Cajon, and San Diego County, California, plan for the secure transfer of all their assets—including digital ones.

If you own Bitcoin, Ethereum, NFTs, or other crypto assets, here’s what you need to know to safeguard your investments for future generations.

What Are Digital Assets?

Digital assets include anything you own in a digital form that has value. This can include:

• Cryptocurrencies: Bitcoin, Ethereum, Solana, Dogecoin, etc.

• NFTs: Digital art, collectibles, in-game assets, domain names, etc.

• Exchange accounts: Wallets with Coinbase, Binance, Kraken, MetaMask, etc.

• Private keys and seed phrases: Critical for accessing your digital wallets

If your loved ones don’t have access to your crypto holdings or NFT portfolio when you pass away or become incapacitated, those assets can be permanently lost.

Why Crypto & NFTs Need Special Estate Planning

Unlike bank accounts or property titles, digital assets are not tied to your name in the same way. There’s no “customer service” line to call if your heirs can’t find your seed phrase or don’t know where your assets are stored.

Without a specific plan, crypto assets often do not show up in probate proceedings—which means they are never discovered, claimed, or passed on.

5 Key Steps to Protect Your Crypto in an Estate Plan

1. List All Digital Assets

The first step is creating an inventory of your digital assets, including:

• Which coins/tokens you own

• Where they are stored (hardware wallet, mobile app, exchange)

• Account credentials, wallet addresses, and access codes (securely documented)

2. Securely Store Access Information

Store your private keys, seed phrases, and login credentials in a highly secure, but accessible, location. This can include:

• Encrypted USB or hardware storage

• Password management software (e.g., LastPass or Bitwarden)

• Written documentation stored in a safe or with your estate attorney

Never store this information unprotected or in cloud storage without encryption.

3. Include Digital Assets in Your Estate Plan

We help clients incorporate digital assets into their:

• Revocable Living Trusts: Allows for controlled, private distribution of digital assets while avoiding probate

• Wills: As a backup or for naming digital asset beneficiaries

• Powers of Attorney: To allow an agent to manage crypto if you become incapacitated

• Instructions to Executors/Trustees: Outlining how to locate, access, and transfer digital assets

In California and Washington, your trustee or executor needs clear legal authority to access your digital property under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).

4. Use a Digital Asset Memorandum

We recommend a separate Digital Asset Memorandum that lists everything in detail without being part of the public record. This document can be updated regularly without the need to amend your trust.

5. Consider Tax Implications

Crypto is treated as property by the IRS, which means it’s subject to capital gains tax, not income tax. When digital assets pass to heirs, they receive a step-up in basis, which can eliminate capital gains tax if sold soon after.

We work with tax professionals in San Diego County, CA, and King County, WA, to ensure your plan accounts for both tax and legal implications.

Planning for NFTs

NFTs present their own unique challenges. You should:

• Specify where and how they are stored (e.g., OpenSea wallet, cold wallet)

• Ensure copyright and licensing rights are clearly understood and transferable

• Address how royalties, if any, should be handled by your beneficiaries

As NFTs grow in value and scope—from art to music to gaming—they need to be treated like any other significant asset.

Why Local Experience Matters

Estate planning laws around digital assets vary, and both California and Washington have adopted RUFADAA, but implementation and practice differ.

Our team at East County Estate Planning, PC knows how to properly structure estate plans to comply with state laws in:

• California: La Mesa, Santee, El Cajon, San Diego County

• Washington: Kirkland, Redmond, Bothell, Woodinville, Sammamish, King County

We’ll ensure your estate plan fully accounts for both your physical and digital wealth.

Don’t Let Your Crypto Disappear Forever

If you’ve invested in cryptocurrency or NFTs, you owe it to yourself and your loved ones to include them in your estate plan. At East County Estate Planning, PC, we offer custom digital asset planning to ensure your legacy is protected in the digital age.

📍 Schedule your consultation today—secure your estate, secure your crypto.

Office Locations

• La Mesa Office

• Kirkland Office

📞 Call us today at (619) 566-8084 or visit www.ecestateplanning.com to schedule your free consultation.

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal advice. Reading this blog or contacting our firm through this website does not create an attorney–client relationship. You should not act or refrain from acting based on any content included in this blog without seeking appropriate legal or other professional advice specific to your situation.