Florida estate planners have long helped clients pass on real estate, brokerage accounts, retirement funds, and business interests. Today, a growing class of clients holds significant wealth in a different form: cryptocurrency, NFTs, online investment accounts, digital businesses, and intellectual property stored only in the cloud.
These assets present unique estate planning challenges. Unlike a bank account that a surviving spouse can access with a death certificate, a Bitcoin wallet with a lost private key is gone — permanently and irrecoverably. Unlike a brokerage that is regulated and required to work with an estate, a DeFi protocol operates with no customer service desk and no exception process.
Florida law provides a framework for digital asset inheritance under F.S. Chapter 740 (RUFADAA), but the law can only help if you have set up your estate plan to authorize fiduciary access — and if you have documented how to access your assets before you die.
What Are Digital Assets Under Florida Law?
Florida's Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA, F.S. Chapter 740) defines a digital asset broadly as any "electronic record in which an individual has a right or interest." This includes:
- Cryptocurrency — Bitcoin (BTC), Ethereum (ETH), and all altcoins and tokens
- NFTs (Non-Fungible Tokens) — digital art, collectibles, gaming assets
- Exchange accounts — Coinbase, Kraken, Gemini, Robinhood, and similar platforms
- DeFi and staking positions — liquidity pools, staking rewards, yield farming positions
- Online financial accounts — PayPal, Venmo, Cash App balances
- Email accounts — often essential for verifying and recovering other accounts
- Social media accounts — which may have monetary value (monetized channels, sponsored content) or sentimental value (photos, messages)
- Domain names and websites — including e-commerce businesses, content sites, SaaS products
- Digital files — photos, documents, creative work stored in cloud services
- Loyalty points and rewards — airline miles, hotel points, subscription credits with monetary value
The Fundamental Problem: Access Without the Key
Traditional assets pass through a well-established legal infrastructure. Banks have probate claim processes. Brokerages transfer accounts to beneficiaries with verified documentation. Social Security and life insurance have clear procedures.
Cryptocurrency — particularly self-custodied cryptocurrency held in a hardware wallet (Ledger, Trezor) or software wallet (MetaMask) — operates entirely outside this infrastructure. The only access mechanism is the private key or the 24-word seed phrase (BIP-39 recovery phrase). There is no customer support to call. There is no "forgot my password" recovery. If the seed phrase is lost, the assets are permanently unrecoverable — no matter what a Florida court orders.
Florida's RUFADAA: The Legal Framework for Fiduciary Access
Before RUFADAA (adopted in Florida effective July 1, 2016), a personal representative or trustee who tried to access a deceased person's online accounts was technically violating the Computer Fraud and Abuse Act (18 U.S.C. § 1030) and the federal Stored Communications Act (18 U.S.C. § 2701) — even when acting in their official fiduciary capacity.
RUFADAA resolves this by establishing a legal hierarchy of access rights:
- The online tool — If the platform (Google, Facebook, Coinbase, etc.) provides a digital tool for the user to designate what happens to their account after death (e.g., Google Inactive Account Manager, Facebook Legacy Contact), the user's designations in that tool control above all else
- The estate planning documents — If there is no platform-specific tool designation, the user's will, trust, or power of attorney controls — but only if those documents contain explicit RUFADAA authorization language
- The platform's terms of service — If neither of the above provides direction, the platform's terms of service govern
Exchange-Held vs. Self-Custodied Crypto: Different Problems
| Feature | Exchange-Held Crypto (Coinbase, Kraken, etc.) | Self-Custodied Crypto (Hardware/Software Wallet) |
|---|---|---|
| Access after death | Estate claim process with death certificate + legal docs | Requires private key or 24-word seed phrase |
| Recovery if access info lost | Platform support may assist with identity verification | Impossible — no recovery mechanism |
| Hacking/theft risk | Platform-level security (exchange hacks do occur) | Physical device theft; seed phrase theft |
| FDIC/SIPC protection | No (crypto is not FDIC/SIPC insured) | No |
| Estate planning complexity | Moderate (beneficiary designation or trust ownership) | High (seed phrase storage is critical) |
| Privacy | Exchange has your identity (KYC) | High (wallet may be pseudonymous) |
| Recommended approach | Title account in trust or name trust as beneficiary | Multi-location seed phrase storage; trustee access instructions |
The Digital Asset Memorandum: The Key Document
The most effective tool for passing digital assets is a Digital Asset Memorandum — a separate, private document (not filed with any court) that provides your fiduciary with everything needed to locate and access your digital assets. Your will and trust should reference this document by name and authorize your fiduciary to rely on it.
A comprehensive Digital Asset Memorandum should include:
- Inventory of all digital assets — type, approximate value, and location (exchange name or wallet type)
- Exchange accounts — the platform name, email used, and instructions for how to access or claim the account; do not include live passwords (they change)
- Hardware wallets — the device location (e.g., "Ledger Nano X in the safe"), the PIN, and — most critically — the seed phrase storage location (not the phrase itself in this document unless the document itself is stored in a secure location, such as a safe deposit box or fireproof safe)
- Instructions — whether to sell, hold, or transfer specific assets; which beneficiary should receive which asset
- Contact information — any crypto advisor, accountant, or digital asset attorney the fiduciary should consult
Seed Phrase Storage: The Right and Wrong Way
The 24-word BIP-39 seed phrase is the master key to a self-custodied wallet. Anyone who has it can move every asset in the wallet — instantly, irrevocably, and anonymously. Proper storage is both an estate planning issue and a security issue.
Do Not Store Seed Phrases:
- In a digital file on your computer or phone (ransomware risk)
- In cloud storage — Google Drive, Dropbox, iCloud (hacking risk)
- In email or a messaging app
- In your will (becomes public record)
- In only one location (single point of failure)
Recommended Seed Phrase Storage:
- Metal seed phrase backup (Cryptosteel, Bilodl, etc.) — fireproof and waterproof engraved metal plates; store in a fireproof safe or safety deposit box
- Multiple secure locations — one copy with your estate attorney in a sealed envelope, one in a home safe, one in a safety deposit box — each location documented in your Digital Asset Memorandum
- Trusted fiduciary access — your successor trustee or personal representative should know where to find the seed phrase, even if they do not have it before your death; consider a sealed letter with your estate attorney to be opened only at death
Tax Treatment of Inherited Cryptocurrency in Florida
Cryptocurrency is treated as property for federal tax purposes (IRS Notice 2014-21). Key tax rules for inherited crypto:
- Stepped-up cost basis — Under IRC § 1014, inherited cryptocurrency receives a new cost basis equal to the fair market value at the date of the decedent's death. If you inherit Bitcoin with a date-of-death value of $50,000 (even if the decedent paid $5,000), your cost basis is $50,000. Sales above that basis are taxable; sales at or below are not.
- Estate tax inclusion — Cryptocurrency held at death is included in the gross estate at date-of-death fair market value for federal estate tax purposes
- Income in respect of a decedent (IRD) — Generally does not apply to cryptocurrency held as a capital asset (unlike retirement accounts)
- Florida has no state estate or inheritance tax — Florida residents pay only federal estate tax if the gross estate exceeds $13.99 million (2025)
Planning for Other Digital Assets
Online Financial Accounts (PayPal, Venmo, Robinhood)
These platforms typically have beneficiary designation tools or estate claim processes. Name beneficiaries through the platform's tool where available, and include explicit RUFADAA authorization in your trust and power of attorney for the trustee or agent to access these accounts during incapacity.
Social Media and Email
Google (Inactive Account Manager), Facebook (Legacy Contact), and Apple (Digital Legacy) all offer specific tools for designating what happens to your accounts after death. These should be set up as part of your digital estate planning — they override any trust or will provision for those platforms.
Domain Names and Online Businesses
A domain name, website, or online business (e-commerce store, content site, SaaS product) can have substantial monetary value. These assets should be specifically addressed in your trust or will — including instructions for the fiduciary to continue operations, sell the business, or wind it down. The login credentials for the hosting provider, domain registrar, and any associated platforms should be documented in your Digital Asset Memorandum.
Frequently Asked Questions
Plan for Your Digital Assets Before They're Lost
Cryptocurrency and digital assets require proactive estate planning — the window to act is always now, not after a health event. Cornerstone Wealth & Legacy Law helps Florida clients inventory, document, and integrate digital assets into a comprehensive estate plan that actually works for the people they love.
Start Your Estate Plan →This article is for general informational purposes and does not constitute legal or tax advice. Digital asset and cryptocurrency estate planning involves complex federal tax law, Florida trust and probate law, and rapidly evolving technology. Consult a licensed Florida estate planning attorney and a qualified tax advisor before making decisions about your digital assets. Arthur Simpson, Esq. is licensed to practice law in the State of Florida.