How to transfer cryptocurrency into a trust

How to transfer crypto into a trust

Cryptocurrency is no longer a fringe asset. Bitcoin, Ethereum, stablecoins, NFTs, and other digital holdings now appear routinely on personal balance sheets alongside brokerage accounts and real estate.

What has not kept pace is how these assets are handled inside estate plans.

Many families assume that because crypto is “digital,” it will somehow be easier to transfer at death. The opposite is usually true. Cryptocurrency is uniquely unforgiving. There is no customer service desk that can override a missing private key. No probate court order that can compel access to a cold wallet. If your plan does not explicitly account for how digital assets are owned and accessed, they can disappear permanently.

The goal of trust planning for cryptocurrency is simple: make sure the trustee can legally control the asset when needed and can practically access it without guesswork. The mechanics matter. The paperwork matters. The access strategy matters.

This guide walks through how cryptocurrency can be transferred into a trust, what to do when it cannot, and how to structure access so the plan actually works.

The legal objective: control, not just intent

Intent alone does not move crypto. Ownership and access do. From an estate planning perspective, cryptocurrency is treated as property. The IRS classifies virtual currency as property for tax purposes, not cash. Which means the same baseline rules apply as with any other asset: it should be owned by the trust where possible, payable to the trust at death when it is not, and structured so the trustee has both clear legal authority and practical access when the time comes.

Option 1: Transfer cryptocurrency into a trust-owned account

Exchange or custodial platforms

If your cryptocurrency is held on an exchange or custodial platform, start by reviewing whether that platform supports trust ownership. Some major platforms allow accounts to be opened in the name of a revocable living trust. Others allow conversion of an individual account into a trust account with documentation.

When this option is available, it is the cleanest solution. The platform continues to handle custody, the trust becomes the legal owner, and the trustee can step in with clear authority upon incapacity or death.

Before initiating a transfer, confirm:

• The trust name matches the account registration exactly
• The trustee is properly listed as an authorized person
• The platform’s procedures align with your trust terms

If the platform does not support trust ownership, do not assume beneficiary designations will solve the problem. Many exchanges still do not offer payable-on-death functionality that integrates cleanly with trusts.

Option 2: Create a wallet titled in the name of the trust

For assets held in self-custodied wallets, ownership is defined by control of the private keys. That makes titling less intuitive, but still achievable.

One approach is to create a new wallet designated for the trust and then transfer the cryptocurrency into that wallet. This wallet is treated as a trust asset in the estate plan documentation, even though the blockchain itself does not record legal title.

Best practices include:

• Naming the wallet clearly as a trust wallet in internal records
• Documenting the wallet address in the trust’s asset schedule
• Ensuring the trustee is authorized to possess the wallet or keys

Hardware wallets can be transferred physically to the trustee or held in secure storage with documented access rights. Online wallets can be structured with shared or delegated access depending on the platform. What matters is consistency. The trust should be able to demonstrate ownership, authority, and access without relying on personal memory or informal instructions.

Option 3: Use an LLC owned by the trust

For larger or more complex holdings, some families place digital assets into a limited liability company and then transfer ownership of the LLC into the trust.

This approach is often used when:

• Multiple wallets or asset types are involved
• Business activity or active trading is occurring
• Additional governance or liability separation is desired

The LLC becomes the operational owner of the crypto. The trust owns the LLC membership interests. The trustee controls the LLC through that ownership. This structure adds complexity and cost, and it is not appropriate for every situation. But when used intentionally, it can provide cleaner administration and clearer authority for successor trustees.

When cryptocurrency cannot be transferred into a trust

Shift the plan from ownership to controlled access

Some wallets and platforms simply do not allow ownership changes, beneficiary designations, or trustee-level access. When that happens, estate planning does not stop. It changes shape.

Instead of transferring title, the plan must guarantee access.

This is where many estate plans quietly fail. Cryptocurrency does not forgive missing information. If the only way to access an asset is a private key, seed phrase, or passcode, that access must be available to the trustee at the right moment, in a controlled way, without exposing it too early or too broadly.

The rule is simple but uncomfortable: If no one can access it, no one inherits it.

The access problem, clearly stated

When crypto cannot be re-titled into a trust:

• Courts cannot compel access to a wallet
• Platforms cannot reset private keys
• Trustees cannot administer what they cannot reach

The plan must answer three questions in advance:

1. What digital assets exist
2. Where they are held
3. How a trustee gains access without guessing

Practical access strategies when ownership transfer is not possible

Secure instruction letter strategy

What it does well

Centralizes knowledge without exposing keys

Where it can fail

Useless if vague or outdated

Best use cases

All plans involving self-custody

Hardware wallet transfer strategy

What it does well

Physical control is clear and direct

Where it can fail

Risk of loss or improper storage

Best use cases

Cold wallets with limited complexity

Encrypted password manager strategy

What it does well

Controlled, delayed access with auditability

Where it can fail

Misconfiguration or weak trustee onboarding

Best use cases

Most modern crypto holders

Loose notes or memory-based access strategy

What it does well

Nothing

Where it can fail

Destined to fail

Best use cases

Never

Strategy 1: A secure instruction letter

A secure instruction letter is a private document that tells the trustee what exists and how access works without listing raw credentials in plain text.

At a minimum, it should identify:

• The existence of digital assets
• The platforms, wallets, or devices involved
• Where access credentials are securely stored
• Who is authorized to retrieve them and when

This document should not include private keys or seed phrases directly. Instead, it should point to the secure system or method that controls access. Because instruction letters are not typically filed with the court, they provide flexibility and privacy. But they only work if they are specific, current, and aligned with how assets are actually held.

Strategy 2: Secure transfer of keys or devices

If cryptocurrency is held in a hardware wallet, the device itself can be transferred to the trustee or placed in secure storage that the trustee can access. For digital keys, encrypted storage methods should be used. Access should require trustee authentication and should not expose credentials during your lifetime.

This is not a place for handwritten notes, desk drawers, or “someone knows where it is.” Lost keys are not an inconvenience. They are permanent.

Strategy 3: Encrypted password managers

Modern password managers allow encrypted vaults with emergency access or trusted contact features. When properly configured, a trustee can gain access only upon incapacity or death, without receiving passwords in advance. This approach reduces the risk of accidental disclosure, creates a clear access trail, and aligns with modern cybersecurity guidance. It has become increasingly common because it balances security with realism. Trustees are given access when they need it, not before.

Tax and compliance considerations

Even when access is solved, trustees still have to administer the asset responsibly. Cryptocurrency held in or for a trust remains subject to tax rules, and missing records quickly create fiduciary risk. Transfers into a revocable trust are generally not taxable events, and transfers at death may receive a step-up in basis, depending on structure and applicable law. That makes documentation just as critical as access itself.

Trustees must be able to:

• Establish cost basis
• Track transaction history
• Determine valuation

Why crypto estate planning requires coordination

Digital assets sit at the intersection of law, technology, and security. That is exactly why cryptocurrency estate planning cannot be handled in isolation.

The trust document, asset titling, access strategy, and tax planning all have to work together. When they do not, trustees are left guessing, families are left frustrated, and assets can be lost permanently. If cryptocurrency cannot be transferred into a trust, the plan must still guarantee controlled access. Not hope. Not intent. Not “someone will figure it out.”

Our platform is built to surface these issues early, structure ownership intentionally, and ensure follow-through. Crypto is not “set it and forget it” planning. It requires clarity, documentation, and systems designed for real-world administration.

The technology may be new. The planning principles are not. If a trustee cannot control it, cannot access it, or cannot explain it, the plan is incomplete.