Why cryptocurrency can be an estate planning 'nightmare'

The inexorable rise of cryptocurrency in recent years has brought with it a new set of challenges when it comes to estate planning, warns Stacy Francis, the founder and president of fiduciary wealth management firm Francis Financial

“One of the biggest pieces that I am seeing more and more and more of is cryptocurrency,” she said, during a seminar on wills, estates, and trusts at the offices of law firm Anderson Kill in midtown Manhattan. “Has anyone dealt with cryptocurrency either in a divorce or in a situation where someone has passed away? It can be a nightmare.”

Francis explained that cryptocurrency can be held in different ways, such as at a custodian like Coinbase, where the asset is easily findable. “You get documents every year also that you use, that you report to IRS,” she said.

But that’s only one part of the cryptocurrency picture, according to Francis. “There is another type of cryptocurrency where it might be on this computer,” she said, gesturing toward a nearby laptop. “I could have $5 million worth of cryptocurrency in this hard drive - And the only way that my heirs are going to find it is, is if I have written out my key - and my key is like 20, 25 letters and numbers.”

“Think about someone who even has the key,” Francis said, acknowledging that this can make things difficult. “You could be leaving your heirs without any idea at all for that key.”

“That's really important … letting your heirs know where all your assets are so that they get them and so that they don't find themselves in a place where they don't know what you have and they don't know what to do next,” she added.

Cryptocurrency access has made headlines in recent years. In 2016 NBA star Kevin Durant invested in bitcoin on Coinbase but was subsequently unable to find the password, CNBC reported last year. With Durant unable to sell any of the bitcoin during that time, the value of his holding reportedly went “through the roof,” according to his agent.

In September 2025 Coinbase CEO Brian Armstrong wrote on X that the issue had been fixed. “Account recovery complete!” he added.

Before that came a Wales resident's 12-year quest to recover a hard drive containing 8,000 bitcoins that was mistakenly thrown away in 2013. After multiple efforts to remedy the more than $900 million mistake – including a long-drawn legal fight and an attempt to buy the landfill where it ended up – James Howell decided to instead launch his own cryptocurrency to try and recoup some of his losses.

Cryptocurrency is a growing theme in the financial advice industry. Research released earlier this year found that crypto adoption is increasing among U.S. financial advisors. The Bitwise/VettaFi 2026 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets found that advisors’ crypto allocations hit an all-time high in 2025. Some 32% of advisors invested in crypto for client accounts in 2025, the study found, up from 22% in the prior year.

Earlier this year crypto RIA Digital Ascension Group told InvestmentNews that a growing number of advisors are turning to the company’s digital platforms to ease their cryptocurrency headaches.

Crypto assets, and where they fall under federal securities rules, have posed a challenge for advisors, although the Securities and Exchange Commission has sought to clarify token taxonomy and jurisdictional boundaries with the Commodity Futures Trading Commission.