Incorporating Crypto into the Estate Planning Conversation
In 2013, British IT worker James Howells accidentally threw away a hard drive while cleaning
his house. Only later did he realize that it held the private key to 8,000 Bitcoin that are now
worth hundreds of millions of dollars.1
For more than a decade, he has tried unsuccessfully to persuade local officials to let him dig up
the landfill where he believes the drive lies buried, even offering to buy the landfill, to no avail.
His desperation illustrates not just the meteoric rise of Bitcoin and cryptocurrencies but also a
fundamental aspect of what sets these assets apart. Without the private key, the Bitcoin is gone
forever. There is no password reset and no recovery mechanism.
Crypto is the only asset class where a simple loss of access, not market decline, can wipe out
an entire fortune. And that risk does not disappear when a client dies. If an executor cannot
locate the wallet, seed phrase, or authentication steps, the asset may as well not exist.
Advisors can learn a lesson from Howells and the lengths to which he is willing to go to recover
his lost drive: Clients who own crypto need an estate plan that accounts for how uniquely
valuable - and fragile - these assets can be.
Who Owns Crypto?
When Howells first mined his Bitcoin, cryptocurrency was known mostly within tech circles.
Since 2013, however, the value on the drive he inadvertently discarded has exploded from
around $9 million to nearly $923 million,2 tracking the dramatic rise of crypto into a widely held
asset. Indeed, many experts and reports consider 2025 the year that crypto went mainstream.3
No longer a niche experiment, Bitcoin and other cryptocurrencies are now widely viewed as
"digital gold" and, often, a hedge against traditional assets. Bitcoin alone has a market
capitalization near $2 trillion, making it one of the world's largest assets, ranked ahead of major
global companies.4
Despite its volatility, Bitcoin's long-term performance has been extraordinary. Ten-year returns
exceed 26,000 percent, far outpacing the S&P 500, gold, oil, and US Treasury bonds.5 A
modest $100 in Bitcoin in 2014 would have been worth nearly $27,000 in 2024.6
Gains such as these explain why Howells is still willing to unearth tons of garbage - and why
crypto has attracted millions of investors. What was once a fringe experiment has moved firmly
into the financial mainstream, though estimates of how many Americans hold cryptocurrency
vary widely.
- A June 2025 Gallup survey found that 14 percent of all US adults own Bitcoin or another
cryptocurrency, rising to nearly 25 percent for men ages 18–49.7
- A Security.org study places total US crypto ownership much higher, at 28 percent (about 65
million adults).8
- Federal Reserve estimates come in far lower, at around 4.3 percent.9
Interestingly, Federal Reserve data also shows that only 2-3 percent of US consumers use
cryptocurrency for everyday purchases or money transfers.10 This suggests that most owners
view crypto primarily as a long-term rather than a short-term play and supports the crypto
community mantra "HODL" ("hold on for dear life").
This growing level of adoption has also fueled a strong sense of confidence among crypto
proponents. As Howells wrote on X in August 2025: "You can block the gates. You can pack the
courts. But you cannot block the blockchain. Crypto has already won."11 A blockchain is a
shared digital record book stored across many computers that securely tracks transactions and
cannot easily be changed or erased. In essence, Howells is expressing his belief that
cryptocurrency is too decentralized to be stopped by traditional power structures like
governments, courts, or regulators.
That confidence, however, exists alongside a far less predictable market reality, and opinions on
it can vary as much as its price fluctuations. One could argue that the early adopters are the
biggest winners: Bitcoin hit a record high in late 2025. But six weeks later, all its gains for the
year had been erased,12 giving credence to the crypto naysayers.
However, more former critics are coming around as institutional investors, financial advisors,
and Main Street buyers push crypto further into respectability.13 Kevin O'Leary, Shark Tank's
"Mr. Wonderful," once called Bitcoin "garbage" (before he flipped from crypto skeptic to
investor).14
Having the Crypto "Talk" with Clients
Crypto is unique, in part, because it presents more than one way to lose big. Market volatility is
one risk. But with cryptocurrency, a simple oversight (like Howells's) can erase a client's
holdings.
Every Bitcoin transaction requires a private key, or an encrypted string proving ownership of the
crypto funds held in a particular wallet. Coinbase likens it to a "password that unlocks the virtual
vault that holds our money."15
In Howells's case, that safeguard became the problem: The missing hard drive contains a
record of the private key. Without it, he cannot access his Bitcoin.
Herein lies the heart of the issue for professionals who advise crypto owners: Access must be
identified, documented, and shared with the right people ahead of time. There is no
mechanism - not through the courts, not through custodians, not through the blockchain - for an
executor or other digital fiduciary to recover a lost private key.
Decentralization is what makes crypto appealing to many investors. It is also why proactive
planning is essential to preserve this digital asset. Crypto may be the future of money. However,
unless clients address access and other unique crypto issues while they are alive, their crypto
wealth could be impossible to preserve, manage, or transfer after their passing.
How to Hold on for Dear Life: An Action Plan for Advisors with Crypto-Owning Clients
Whether your client is a longtime "HODLer" or a recent crypto investor, failing to plan for access
can lead to catastrophic and irreversible loss. Advisors can help by flagging a few core issues
early and pairing them with clear next steps.
Issue: Clients may not disclose crypto unless asked
- Advisor action: Add a simple question to annual reviews: "Do you hold any cryptocurrency
or digital tokens?" Many clients do not think to mention small or experimental holdings
unless prompted.
Issue: Crypto holdings are often scattered and poorly organized
- Advisor action: Help clients create a cryptocurrency inventory of wallet types, platforms,
and general holdings. Guide them on structure only - do not collect or store private keys or
seed phrases for your records.
Issue: Access information is insecurely stored
- Advisor action: Encourage secure, redundant storage, such as with a digital password
manager, online encrypted vault, or real-life fireproof safe. Clients should also document
where access information is kept (without sharing the information itself) so estate fiduciaries
can find it when the time comes.
Issue: Executors may lack the technical ability to manage crypto
- Advisor action: Recommend selecting a tech-literate executor or naming a digital executor
who is comfortable managing digital accounts and security protocols. Suggest that they
include with their estate planning documents a brief "executor security checklist" that
outlines verification steps (such as confirming account ownership and access authority) and
highlights common red flags such as urgent payment requests, unexpected account
changes, or requests for credentials.
Issue: Estate documents may not explicitly address crypto
- Advisor action: Coordinate with the client's estate planning attorney to ensure that wills
and trusts authorize fiduciaries to access, manage, and transfer crypto under applicable
state law.
Issue: Crypto tax considerations
- Advisor action: Inform clients that crypto is treated by the IRS as property, not currency,
under existing guidance. Executors selling or transferring assets may trigger capital gains.
Encourage clients to maintain transaction records and involve tax professionals.
Issue: Advisors must avoid mishandling sensitive data
- Advisor action: Set boundaries. Advisors should never receive or store private keys or
wallet credentials. Instead, provide high-level guidance on secure storage options while
keeping sensitive data solely with the client or authorized fiduciary and ensuring that any
applicable ethical, professional, or regulatory compliance requirements you may be subject
to are fully understood and followed.
Issue: Crypto can create liquidity challenges for estates
- Advisor action: Discuss the client's preferences for holding, liquidating, or transferring
crypto at death. Clarifying intentions helps fiduciaries avoid rushed decisions in volatile
markets.
Secure the Wallet, Secure the Legacy
Whether your clients hold crypto as a diversification asset, view decentralized digital currencies
as the future of money, or fall somewhere in between, ensure that your guidance goes beyond
investing strategy and addresses how crypto fits into their estate plan. Thoughtful estate
planning can help preserve access, reduce confusion, and protect the value of their crypto for
the people they intend to benefit.
MEREDITH | PC
4325 Windsor Centre Trail
Suite 400
Flower Mound Texas 75028
214-513-1013
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning.
