Digital Assets & Cryptocurrency Estate Planning California 2026: Protecting Your Digital Legacy

Why Digital Asset Planning Is Critical in 2026

If you own Bitcoin, Ethereum, NFTs, or any cryptocurrency, here's a sobering fact: an estimated $140 billion in Bitcoin is permanently lost because owners died without sharing their private keys. Unlike traditional bank accounts, there's no customer service number to call. No institution holds your crypto. If your private keys die with you, your digital wealth dies too.

But cryptocurrency is just the tip of the iceberg. Your digital estate includes:

• Cryptocurrency and digital tokens (Bitcoin, Ethereum, stablecoins, NFTs)
• Online financial accounts (PayPal, Venmo, investment apps)
• Email and cloud storage (Gmail, iCloud, Dropbox, Google Drive)
• Social media accounts (Facebook, Instagram, LinkedIn, Twitter/X)
• Digital subscriptions and purchases (Kindle books, iTunes, streaming services)
• Online business assets (domains, websites, e-commerce stores)
• Loyalty programs and rewards (airline miles, credit card points)
• Digital photos and videos (often irreplaceable family memories)

As a Glendale estate planning attorney who has helped families navigate the complex intersection of technology and inheritance law, I've seen the devastating consequences when digital assets aren't properly planned for. This guide explains California's digital asset laws and practical steps to protect your digital legacy.

What Are Digital Assets Under California Law?

California adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2016, codified in Probate Code sections 870-884. This law defines digital assets and establishes rules for fiduciary access.

Legal Definition

Under California Probate Code §870, a digital asset means:

"An electronic record in which an individual has a right or interest."

This broad definition includes:

Asset Type	Examples
Cryptocurrency	Bitcoin, Ethereum, Solana, stablecoins (USDC, USDT), NFTs
Financial Accounts	Online banking, PayPal, Venmo, Robinhood, Coinbase
Email	Gmail, Yahoo, Outlook, ProtonMail
Cloud Storage	Google Drive, Dropbox, iCloud, OneDrive
Social Media	Facebook, Instagram, Twitter/X, LinkedIn, TikTok
Digital Media	Kindle books, iTunes purchases, Steam games
Domains/Websites	GoDaddy domains, WordPress sites, Shopify stores
Business Software	Subscriptions, licenses, SaaS accounts

What RUFADAA Does NOT Cover

• Physical devices (computers, phones, hard drives)—these are tangible property
• Underlying assets represented by digital records (the actual money in a bank, not the app)
• Accounts owned by employers (your work email)

California's RUFADAA Framework: The Three-Tier Priority System

Understanding RUFADAA's priority system is essential for effective planning. California law establishes a hierarchy for determining who can access your digital assets:

Priority 1: Online Tool Designation (Highest)

Many platforms now offer tools to designate a legacy contact or set post-death preferences:

• Google Inactive Account Manager - Designate who receives your data
• Facebook Legacy Contact - Choose someone to manage your memorialized account
• Apple Legacy Contact - Grant access to your iCloud data
• Instagram Memorialization Request - Designate account handling

These settings override your will or trust. If you tell Google to delete everything, your trust's instructions don't matter.

Priority 2: Estate Planning Documents (Middle)

If you haven't used a platform's online tool, your will, trust, or power of attorney controls. But you must specifically address digital assets—generic language may not be enough.

Priority 3: Terms of Service (Lowest)

If you've done nothing, the platform's terms of service control. Most platforms:

• Prohibit transferring accounts
• May delete accounts after inactivity
• Limit or deny access to heirs
• Distinguish between account access and content access

Cryptocurrency Estate Planning: Special Considerations

Cryptocurrency presents unique estate planning challenges that don't exist with traditional assets.

The Problem: No Central Authority

Traditional Asset	Cryptocurrency
Bank holds your money	You hold your crypto directly
Bank can verify identity and grant access	No one can grant access without keys
Lost password? Bank resets it	Lost keys? Crypto is gone forever
Death certificate unlocks accounts	Death certificate is meaningless
FDIC insured	No insurance or recovery

Critical Crypto Concepts for Estate Planning

1. Private Keys

• The cryptographic password that controls your crypto
• Typically 64 hexadecimal characters
• Whoever has the private key controls the assets
• If lost, crypto is permanently inaccessible

2. Seed Phrases (Recovery Phrases)

• 12-24 word phrase that generates your private keys
• Can recover an entire wallet from this phrase
• Must be stored securely offline
• Anyone with the phrase controls your crypto

3. Wallet Types

Wallet Type	Description	Estate Planning Consideration
Hardware Wallet	Physical device (Ledger, Trezor)	Device + PIN needed; include in inventory
Software Wallet	App on computer/phone	Access credentials needed
Exchange Account	Coinbase, Kraken, etc.	Has account recovery; may have legacy features
Paper Wallet	Printed keys	Physical document; store securely
Multi-Sig Wallet	Requires multiple keys	Complex; document all key holders

How to Include Crypto in Your California Living Trust

Step 1: Create a Detailed Inventory

Document every cryptocurrency holding:

• Type of cryptocurrency (BTC, ETH, etc.)
• Approximate amount (can be general for privacy)
• Where it's held (exchange, hardware wallet, etc.)
• Wallet addresses (public keys are safe to document)

Step 2: Secure Your Access Credentials

For each holding, document:

• Private keys or seed phrases
• Wallet passwords and PINs
• Exchange login credentials
• Two-factor authentication backup codes

NEVER put this information directly in your trust document. Trusts can become public during litigation.

Step 3: Create a Secure Storage Solution

Options include:

• Safety deposit box with instructions in trust
• Hardware security module or encrypted drive
• Split custody (seed phrase split among multiple locations)
• Specialized crypto inheritance services (Casa, Unchained)

Step 4: Update Your Trust

Your trust should include:

• Definition of digital assets including cryptocurrency
• Grant of authority to trustee to access and manage digital assets
• Instructions for handling crypto (hold, sell, distribute)
• Authorization for trustee to hire specialists if needed

Step 5: Educate Your Successor Trustee

Your trustee needs to understand:

• What cryptocurrency is and how it works
• Where to find your inventory and access instructions
• When to seek professional help
• Security best practices (never share keys online, verify addresses)

Online Accounts: Platform-by-Platform Planning

Google (Gmail, Drive, Photos, YouTube)

Inactive Account Manager lets you:

• Set inactivity timeout (3-18 months)
• Notify up to 10 trusted contacts
• Share specific data with each contact
• Optionally delete account after data sharing

How to set up: Google Account → Data & Privacy → Inactive Account Manager

Apple (iCloud, Photos, Notes)

Legacy Contact feature (iOS 15.2+):

• Designate up to 5 legacy contacts
• Contacts receive access key
• After death, contact requests access with key + death certificate
• Access to most iCloud data (not Keychain passwords or licensed media)

How to set up: Settings → [Your Name] → Password & Security → Legacy Contact

Facebook & Instagram

Legacy Contact can:

• Manage memorialized account
• Pin a tribute post
• Respond to friend requests
• Cannot read messages or remove content

Memorialization vs. Deletion: You can also request account deletion after death.

How to set up: Settings → Accounts Center → Personal Details → Account Ownership and Control

Financial Apps (PayPal, Venmo, Robinhood)

These typically require:

• Death certificate
• Letters testamentary or letters of administration
• Court order (sometimes)
• Completed claim forms

Estate planning tip: Keep a list of all financial apps with account details in your secure digital inventory.

Powers of Attorney for Digital Assets

Your Durable Power of Attorney for Finances should specifically authorize your agent to:

• Access digital assets and online accounts
• Manage cryptocurrency and digital tokens
• Communicate with service providers
• Reset passwords and security settings
• Close or transfer accounts
• Access content (not just catalog) of communications

Sample language:

"My agent shall have full power and authority to access, manage, and control all my digital assets as defined under California Probate Code Section 870, including but not limited to cryptocurrency, online accounts, email, cloud storage, and social media. This authority includes access to the content of electronic communications to the fullest extent permitted by law."

Without specific language, platforms may refuse access or limit your agent to catalog-only access.

Practical Steps: Your Digital Asset Estate Planning Checklist

Immediate Actions

• Create a digital asset inventory (use our worksheet)
• Set up legacy contacts on Google, Apple, Facebook
• Document crypto holdings and access credentials
• Store credentials securely (not in your trust document)
• Tell your successor trustee where to find everything

With Your Attorney

• Update your living trust with digital asset provisions
• Update your power of attorney with digital asset authority
• Review and update at least annually or when acquiring new digital assets

Ongoing Maintenance

• Review inventory annually - accounts change, passwords change
• Update beneficiary designations on exchange accounts if available
• Test your system - can your trustee actually access everything?
• Educate family members about digital assets generally

Tax Considerations for Digital Assets

Cryptocurrency and Capital Gains

When your successor trustee eventually sells cryptocurrency, it's subject to capital gains tax. Important considerations:

Step-Up in Basis: Like other inherited assets, inherited cryptocurrency receives a step-up in basis to fair market value at the date of death. If you bought Bitcoin at $1,000 and it's worth $50,000 when you die, your heirs' basis is $50,000—not $1,000.

Valuation challenges: Crypto prices fluctuate constantly. Document the valuation method and source used for date-of-death value.

Cost basis records: If you've been trading crypto, your cost basis records may be critical for tax calculations. Include these in your documentation.

Digital Assets and Estate Tax

High-value cryptocurrency holdings count toward your gross estate for federal estate tax purposes. With the 2026 estate tax exemption sunset approaching, families with significant crypto holdings should plan accordingly.

NFTs and Digital Collectibles

Non-fungible tokens (NFTs) present additional estate planning considerations:

What Makes NFTs Different

• Unique assets - Each NFT is one-of-a-kind
• Variable value - Prices fluctuate dramatically
• Platform dependency - Some NFTs require specific platforms to view/use
• Smart contract terms - May have royalty or transfer restrictions
• Metadata storage - The art/content may be stored separately from the token

NFT Estate Planning Tips

1. Document each NFT with description and approximate value
2. Note the platform where it's viewable (OpenSea, Rarible, etc.)
3. Include wallet access same as other crypto
4. Consider liquidity - NFTs may be harder to sell than fungible crypto
5. Understand smart contract terms - some may restrict transfers

What Happens Without Planning: A Cautionary Tale

Real scenario (details changed for privacy):

A Pasadena man died unexpectedly at 42, leaving behind a wife and two children. He had approximately $2.3 million in Bitcoin stored in a hardware wallet. His wife knew he owned Bitcoin but:

• Didn't know which hardware wallet he used
• Didn't know where the device was stored
• Didn't know the PIN
• Didn't have the seed phrase

After months of searching, the family found the Ledger device but couldn't access it. Without the PIN or seed phrase, the Bitcoin remains locked forever. The $2.3 million is technically part of the estate but completely inaccessible.

This didn't have to happen. A simple secure document with the seed phrase would have preserved this family's inheritance.

Frequently Asked Questions

Can I include cryptocurrency in my California living trust?

Yes. Cryptocurrency and other digital assets can and should be included in your California living trust. You should create a detailed inventory of all crypto holdings, document wallet addresses and access methods, store private keys and seed phrases securely with instructions for your trustee, and update your trust to specifically address digital asset management. The trust document itself should include provisions granting your trustee authority over digital assets, but never include the actual private keys or seed phrases in the trust document itself.

What happens to my Bitcoin if I die without a plan?

Without proper planning, your cryptocurrency may be permanently lost. Unlike bank accounts, there is no institution to contact. If your heirs don't have your private keys or seed phrases, the crypto is inaccessible forever. An estimated $140 billion in Bitcoin is already permanently lost due to deceased owners without succession plans. Your family would have no legal recourse—the Bitcoin would remain in your wallet address forever, visible on the blockchain but completely inaccessible.

What is RUFADAA and how does it affect my digital assets?

RUFADAA (Revised Uniform Fiduciary Access to Digital Assets Act), adopted by California in 2016 and codified in Probate Code sections 870-884, governs how fiduciaries like trustees and executors can access your digital accounts after death or incapacity. It creates a three-tier priority system: (1) your online tool settings (like Google's Inactive Account Manager) override (2) your estate plan, which overrides (3) the platform's terms of service. This means if you've set up legacy contacts on Google or Apple, those settings control—even if your trust says something different.

Should I put my crypto private keys in my trust document?

No. Never include private keys, seed phrases, or passwords directly in your trust document because trusts can become public during litigation or administration disputes. A disgruntled beneficiary or creditor could potentially access this information. Instead, create a separate secure document stored in a safe location (like a safety deposit box or home safe), reference its location in your trust, and provide your successor trustee with clear instructions for accessing it. Consider encryption or split custody for high-value holdings.

Can my successor trustee access my online accounts after I die?

It depends on several factors. Under California's RUFADAA law, your trustee can request access to your digital assets, but platforms may limit access to a "catalog" of communications (metadata like sender, recipient, date) rather than actual "content" (the messages themselves) unless you specifically authorized content access in your estate plan. Many platforms like Google and Facebook have legacy contact or inactive account manager features that you should configure during your lifetime. Even with proper legal authority, platforms may require death certificates, letters of administration, and completion of their specific forms before granting any access.

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Protect Your Digital Legacy Today

Digital assets are becoming an increasingly significant part of California estates. Whether you hold substantial cryptocurrency or simply want to ensure your family can access important online accounts and digital photos, proper planning is essential.

What we provide:

• Digital asset provisions in your living trust
• Durable power of attorney with digital asset authority
• Guidance on secure credential storage
• Inventory templates and checklists
• Successor trustee education

Don't let your digital assets become permanently lost. Call (818) 291-6217 or visit our contact page to schedule a consultation.

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About the Author

Rozsa Gyene (State Bar No. 208356) is a California estate planning and trust administration attorney serving Glendale, Burbank, Pasadena, and throughout Los Angeles and Santa Barbara Counties. With extensive experience in both traditional estate planning and emerging digital asset issues, Rozsa helps California families protect all their assets—physical and digital—for future generations.

Office Location: 450 N Brand Blvd, Suite 600, Glendale, CA 91203

Phone: (818) 291-6217

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Disclaimer: This article provides general information about digital asset estate planning in California and should not be construed as legal, tax, or investment advice. Cryptocurrency values are highly volatile, and laws regarding digital assets continue to evolve. This article reflects information current as of January 2026. Consult with qualified legal and tax professionals about your specific circumstances.

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