Probate & Letters Testamentary Considerations with Your Crypto Estate Plan
Most people think of probate as paperwork. And it is, until the person who died held Bitcoin wallets or NFT collections. Then things get complicated fast. Exchange accounts flag inactive users. Hardware wallets sit locked behind PINs that nobody else knows. And unlike a bank account, there’s no branch manager to call.
Probate is how you get the legal authority to recover those assets. Without Letters Testamentary, exchanges won’t talk to you. Courts can’t help you crack open a cold storage device. If your family holds any meaningful amount of crypto, you need a plan for this before something happens.
What Probate Really Means for Digital Asset Recovery
Probate is the court process that validates a will and authorizes who gets what. If there’s no will, the court uses state intestacy laws to sort it out. For crypto, this matters more than most people realize. Almost every exchange and wallet manufacturer requires a court order before they’ll give anyone access to a deceased user’s accounts.
The process creates a legal paper trail proving you have the right to touch someone else’s digital property. Without it, you’re locked out.
Letters Testamentary: Your Access Pass to Locked Accounts
Letters Testamentary are court documents that give an executor authority to manage an estate. For crypto, these are what actually get exchanges and custodians to talk to you.
A lot of families find this out the hard way. Coinbase, Binance, and other major platforms have strict policies about account access. They want court documents, not just death certificates. Without Letters Testamentary, your requests for account information stall for months. Sometimes years.
The document also puts fiduciary responsibility on the executor. That means you’re on the hook to secure private keys, document wallet addresses, and keep detailed records of every crypto transaction during estate administration.
Preparing Your Probate Application for Digital Assets
Before you file anything, pull together the specific documentation that courts and crypto platforms will ask for. Start with whatever digital asset inventory you can build: exchange statements, wallet addresses, hardware device purchase records. Document all of it.
One thing to be careful about: never include private keys or seed phrases in public court filings.
Estimate the estate’s crypto value using established pricing sources and write down how you got your number. Crypto prices move fast, so timestamp your valuations and keep evidence tied to the specific date you used.
Find attorneys who actually understand crypto estate administration. Ask them point-blank about their experience with exchange access requests and digital asset tax reporting. A general estate lawyer will miss things about blockchain transactions and DeFi protocols because they’ve never dealt with them.
Filing the Application: Digital Asset Considerations
When you fill out probate applications, list digital assets with clear categories. Separate exchange accounts from hardware wallets. Distinguish between NFTs and fungible tokens. Courts need to understand what exactly they’re authorizing you to manage.
If crypto assets are held through business entities or trust structures, note those ownership relationships carefully. Some crypto investments skip probate entirely through corporate ownership or designated beneficiary arrangements.
Attach the required documents: original will, death certificate, any codicils. Pay court fees and submit executor affirmations. Depending on your jurisdiction and the size of the estate, you may need a resident process agent or surety bond.
After Filing: Managing Digital Assets During Probate
Once you have Letters Testamentary in hand, contact crypto exchanges right away. Many platforms have specific procedures for deceased account holders, and some require advance notice. Coinbase, for example, has a detailed set of requirements for estate representatives.
Lock down all hardware wallets and any devices that might contain private keys. Before you move anything significant, test wallet access with small amounts first. Record every transaction with timestamps and blockchain confirmation numbers.
Staking rewards and DeFi protocol interactions can keep generating income while the estate is being administered. Track those earnings carefully for tax purposes, and figure out whether the assets need active management to hold their value.
Common Digital Asset Probate Challenges
Price volatility makes estate administration unpredictable. Beneficiaries watch crypto values drop and start questioning executor decisions about when to sell. Keep communication open about valuation dates and distribution timing, because those conversations will happen whether you’re ready for them or not.
Lost access information is the worst-case scenario. If nobody has the recovery phrases or hardware wallet PINs, those crypto assets are gone. Permanently. No court order can force a blockchain to reverse a transaction or recover a lost key.
Taxes get messy with digital assets. Staking income, airdrops, and DeFi interactions each create taxable events, and standard estate administration software wasn’t built to handle any of it. Budget for a crypto-specific tax preparer.
Working with Professional Support
Get a probate attorney involved early, especially one who’s handled digital asset recovery before. The legal complexity spikes when you’re dealing with international exchanges, smart contracts, or disputed account access.
A tax professional who’s actually worked with cryptocurrency reporting will save you from expensive mistakes. Ask them specifically whether they’ve dealt with exchange transaction downloads and blockchain analysis tools.
For complicated situations involving lost wallets or international custody, consider a digital asset recovery specialist. They know technical recovery methods that most attorneys have never heard of.
Want to talk through your situation? Contact Digital Ascension Group to learn more about protecting your family’s digital assets through proper estate planning and probate preparation.
Building Your Digital Legacy Protection Plan
At Digital Ascension Group, we worked with a family whose father had built up significant cryptocurrency holdings across multiple platforms. When he died unexpectedly, his family found themselves staring at locked accounts worth millions and hardware wallets they couldn’t open.
The probate process dragged on for eight months. Their estate attorneys didn’t know how crypto custody worked. Exchange platforms kept asking for documentation that hadn’t been filed. Hardware devices stayed locked while family members tore through the house looking for recovery information.
That kind of delay is avoidable. Families who document their digital holdings, store recovery information securely, and work with people who’ve done this before don’t end up in that position. If you have crypto holdings of any size, get your estate plan sorted out now. Waiting is the most expensive option.
