Cryptocurrency isn’t fringe anymore. Neither are NFTs. They’re woven into modern portfolios — from Bitcoin held long-term to digital art stored in blockchain wallets.
What hasn’t caught up? Estate plans.
When someone dies without a plan for digital assets, it can mean irreversible loss. This isn’t about misplacing a password — entire fortunes have disappeared because no one could access them. Crypto doesn’t come with a customer support line. That’s the nature of decentralized systems.
If your estate plan doesn’t account for cryptocurrency and NFTs, it’s incomplete.
Control the Access
No one inherits what they can’t reach. That’s rule number one with crypto and NFTs.
Every wallet — whether it’s on an exchange or a cold storage device — requires credentials. You’ll need to leave behind clear access instructions, but never in your will.
Why? Wills become public records during probate. Publishing private keys or recovery phrases in a court document is an open invitation for theft.
Instead, use a layered approach:
- Store credentials in an encrypted digital vault, password manager, or secure hardware wallet.
- Inform your executor or trustee where and how to find them.
- Consider naming a digital fiduciary — especially if your state has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA).
South Carolina has adopted RUFADAA, which allows executors and trustees to access digital assets when the owner authorizes it in estate planning documents.
Put It in Writing — Properly
Digital assets deserve a seat at the table. If your estate plan covers real estate, brokerage accounts, and business interests, your crypto belongs right alongside them.
List your cryptocurrency and NFTs explicitly in your estate planning documents. A trust often provides smoother transitions than a will, especially for digital property. Trusts keep sensitive information private and allow your trustee to act quickly without waiting for court approval.
Also remember: not all NFTs convey full ownership rights — some merely grant access or usage licenses that may not be transferable after death. Review the terms before including them in your plan.
Get Ready for Valuation
The IRS doesn’t care that crypto trades 24/7. At the time of your death, those assets need a fair market value for estate tax purposes.
Some coins are relatively easy to price, even with daily fluctuations. NFTs are another story — their value depends on demand, rarity, and perception.
Your executor should work with professionals experienced in digital asset valuation, especially if your estate might approach the taxable threshold.
Understand the Tax Rules
The IRS treats cryptocurrency and NFTs as property, not currency. When these assets are sold, they’re subject to capital gains tax, not income tax.
South Carolina follows suit — the state taxes income (including gains) but does not impose a separate inheritance or estate tax.
Here’s the upside:
Most inherited assets receive a step-up in basis.
If you bought Bitcoin for $10,000 and it’s worth $40,000 when you die, your heir inherits it at the $40,000 value. If they later sell for $45,000, they’re taxed only on the $5,000 gain — not the $30,000 appreciation during your lifetime.
However, if the estate sells the crypto before distribution, those gains could be taxed at the estate level. That’s why clear instructions, executor authority, and good documentation matter.
Name Your Beneficiaries Wisely
Digital assets can be divided just like any other property. You can:
- Split holdings equally among heirs,
- Assign specific tokens to certain beneficiaries, or
- Even design a smart contract to automate distribution.
That last option is possible — but only if coordinated between your legal and technical advisors. It’s not a plug-and-play feature yet.
No matter how you divide your digital wealth, clarity matters. Your estate plan should reflect your exact intentions and leave no room for guesswork.
The Bottom Line
Cryptocurrency and NFTs represent real, sometimes substantial, wealth — but they don’t follow traditional estate rules. Without a plan, those assets can disappear forever.
A well-drafted estate plan ensures your digital property passes securely and efficiently to your chosen heirs.
If you hold cryptocurrency, NFTs, or other digital assets, it’s time to make sure they’re part of your estate strategy — not left to chance.
Need help reviewing or updating your estate plan to include digital assets? Call Charleston Estate Planning Law Firm at 843-972-3391.
Charleston Estate Planning Law Firm
Latest posts by Charleston Estate Planning Law Firm (see all)
- Who Should Be Your Trustee, Really? - April 17, 2026
