How to Handle Cryptocurrency in Probate: NYC

As more people invest in digital currencies like Bitcoin, Ethereum, and other digital assets, probate attorneys increasingly face a new challenge: distributing cryptocurrency after death. Unlike traditional assets, digital currencies are protected by private keys and often stored on online platforms or cold wallets — creating legal and practical hurdles during estate administration.

If you're a probate attorney in New York, here’s everything you need to know.

Why Digital Assets Matter in Estate Planning

Today, a person’s most valuable possessions may be digital — cryptocurrencies, online investment accounts, cloud storage, photos, social media profiles, and more.

When digital assets are not addressed in an estate plan:

• Executors may be unable to locate or access critical assets.

• Valuable assets may be lost permanently without private keys or passwords.

• Disputes among heirs may arise over ownership or access rights.

Solution: Digital assets must be explicitly included in wills, trusts, or powers of attorney, along with clear access instructions.

New York’s Legal Framework: RUFADAA

New York has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), codified in EPTL Article 13-A.

Key Points Under RUFADAA:

• "Users" are individuals holding digital assets such as online accounts, email, social media profiles, or cryptocurrencies.

• Users can use an online tool (e.g., Google’s Inactive Account Manager or Facebook’s Legacy Contact) to give fiduciaries access to specific digital assets.

• If no online tool exists, users can grant access through estate planning documents — a will, trust, or power of attorney.

• Importantly, RUFADAA overrides custodial service agreements (e.g., standard website terms) that usually restrict third-party access.

Balancing Access and Privacy

RUFADAA ensures that fiduciary access must respect privacy:

• Explicit consent is required for fiduciaries to access the content of electronic communications (e.g., email body text, social media messages).

• Custodians may require additional documentation:

  • Death certificate

  • Letters testamentary or letters of administration

  • Evidence of user consent (in an online tool, will, trust, etc.)

Without clear consent, service providers can deny access to content, even if access to basic account metadata is allowed.

Important New York Cases on Digital Asset Access

• Matter of Serrano: A Surrogate’s Court allowed an executor access to the decedent’s Apple and Google accounts after satisfying procedural requirements under SCPA § 2103 and RUFADAA.

• Matter of Coleman: A fiduciary was granted access to a decedent’s email accounts, reinforcing the principle that digital assets are part of the probate estate when proper authorization is provided.

These cases confirm that New York probate courts recognize fiduciary access rights to digital assets when the proper legal procedures are followed.

Real-World Example: Administering Cryptocurrency via Coinbase

Recently, we handled a case involving a decedent who held cryptocurrencies in a Coinbase account. Here’s what the process looked like:

1. Required Documentation:

   • Death certificate

   • Letters testamentary (issued after probate of the will)

   • Executor’s government-issued ID

2. Platform Requirements:Coinbase required the executor to create a Coinbase account in their own name.

3. Asset Handling:The cryptocurrency was transferred into the executor’s account, then sold, and the cash proceeds transferredinto a bank account owned by the estate.

Important Considerations:

• Each exchange (Coinbase, Binance, Kraken, etc.) has different requirements for transferring or liquidating crypto.

• If the cryptocurrency was stored in a private wallet (e.g., Ledger, Trezor) and the private keys were not shared, recovery may be impossible.

• Selling crypto is a taxable event: Executors must account for capital gains or losses on the estate’s tax filings (IRS Form 1041 and/or individual Form 8949/Schedule D).

Final Thoughts for New York Probate Attorneys

Handling cryptocurrency in probate requires:

• Careful estate planning: Clients should use online tools and update estate documents to address digital assets.

• Clear documentation: Ensure wills, trusts, and powers of attorney authorize access.

• Understanding platform policies: Each custodian may have unique steps for transferring crypto holdings.

• Awareness of tax implications: Selling or transferring crypto triggers potential income and capital gains tax obligations for the estate.

Cryptocurrency and digital assets are no longer fringe issues — they are core parts of modern estates. Planning ahead ensures a smooth, efficient, and legally compliant administration process. EstateMin helps with this and reduces admin for gathering details. Get in touch to learn more.

Disclaimer: Please note that the information provided in this article is for general informational purposes only and should not be construed as legal advice. It is always recommended to consult with a qualified legal professional for advice tailored to your specific situation. No liability whatsoever is accepted by EstateMin from any action taken in reliance of the information contained on this website.