As digital assets such as Bitcoin, Ethereum, and other cryptocurrencies become more common, Florida residents need to consider how these assets fit into a comprehensive estate plan.
Unlike traditional assets, cryptocurrency exists only in digital form and is accessed through private keys, seed phrases, or online accounts. Without proper planning, these assets can be permanently lost at death or incapacity.
What is Cryptocurrency under Florida Law?
Under Florida law, cryptocurrency is considered a “digital asset,” which is defined as the following: “an electronic record in which an individual has a right or interest.” Notably, the term does not include an underlying asset or liability unless the asset or liability is itself an electronic record. See Section 740.002(9), Florida Statutes.
This is a broad definition that encompasses a range of things. For instance, examples of digital assets under this definition could include electronic records such as emails, social media accounts, digital photographs, videos, text files, or other forms of data stored electronically, so long as the asset is in electronic storage by a custodian providing an electronic communication service or maintained by a custodian offering a remote computing service to the public, and they must not be readily accessible to the public.
Cryptocurrency also falls within this definition, being an electronic record stored on a blockchain and representing a digital form of value in which an individual has a right or interest. Some common forms of cryptocurrency are:
- Bitcoin: The original cryptocurrency and the most widely recognized.
- Non-Fungible Tokens (“NFTs”): Digital collectibles or assets tied to art, music, or virtual land that are stored on blockchains.
- Alternative Coin (“Altcoins”) (e.g., Dogecoin, BNB, Solana, etc.): Refers to any cryptocurrency besides Bitcoin, though most consider altcoins as any cryptocurrency besides Bitcoin and Ethereum.
- Ethereum (ETH): A popular form of cryptocurrency that brought improved support for smart contracts, which are computer programs that run on the blockchain.
- Stablecoins (e.g., USDC, USDT): Cryptocurrency that is pegged to the value of the U.S. dollar and often used for transactions and savings.
In Florida, cryptocurrency is generally treated as personal property, which means it can be owned by a revocable living trust and managed by a trustee, but only if the trust is properly structured and funded.
Why You Should Put Your Cryptocurrency Into Trust
Placing your cryptocurrency into a trust can provide a structured, secure, and private means of managing and distributing digital assets, while offering potential legal and financial benefits under Florida law.
For instance, placing cryptocurrency in a trust can provide an additional level of privacy and security, as trusts can shield the details of cryptocurrency holdings from public disclosure because they are not subject to the same reporting requirements as other forms of ownership. Trusts can also be structured to provide tax advantages and protect assets from creditors.
Placing cryptocurrency in a trust even has benefits to you have you pass away. By placing cryptocurrency in a trust, your trustee can ensure that the digital assets are distributed to beneficiaries according to your wishes, potentially avoiding probate and reducing the risk of disputes.
Florida Law and Access to Digital Assets
Florida has adopted the Fiduciary Access to Digital Assets Act (“FFADAA”) (Chapter 740, Florida Statutes), which governs how trustees, personal representatives, and agents may access digital assets. The goal of the FFADAA is to provide a legal framework for fiduciaries to access and manage digital assets and electronic communications of individuals, while balancing the privacy rights of the account holders and the responsibilities of custodians.
While Chapter 740, Florida Statutes, provides the legal framework for handling digital assets such as cryptocurrency, it does not automatically give a trustee access to your cryptocurrency wallets or exchange accounts. In fact, the FFADAA specifically does not grant fiduciaries any new or expanded rights beyond those held by the account holder. See Section 740.004, Florida Statutes.
Instead, your trust must specifically authorize the trustee to manage digital assets, and your planning must account for the practical realities of access to those digital assets. This means that while the FFADAA provides useful guidance on how to use and structure a trust to account for cryptocurrency, the existence of the FFADAA does not protect or pass along your interests in cryptocurrency once you pass.
Funding the Trust and Securing Access
Including cryptocurrency in a Florida trust involves more than simply listing the types of cryptocurrencies owned on a schedule of assets. Depending on how the cryptocurrency is held, you may need to retitle exchange accounts in the name of the trust or document ownership of self-custodied wallets as trust property.
While it is imperative that the trust not only clearly identifies the type of digital assets owned but also addresses how the successor trustee can gain access to said assets, a certain measure of care is needed here. Because private keys and recovery phrases are extremely sensitive, they should not be written directly in the trust document. Instead, they should be stored securely and referenced in a way that allows your successor trustee to locate them without exposing them during your lifetime.
Choosing the Right Trustee
Not every trustee is well suited to managing digital assets. In Florida, a trustee has fiduciary duties of care and prudence, which apply equally to cryptocurrency.
You should consider naming a trustee or co-trustee who understands digital assets or is willing to work with qualified professionals who are experienced with navigating digital assets. Additionally, clear instructions within the trust can help protect both the trustee and the beneficiaries from mistakes or misunderstandings involving volatile or technically complex assets.
Keep Your Plan Updated
As cryptocurrency platforms become more mainstream, wallet technology is consistently improving, and tax rules are changing frequently, it is more important than ever to review a trust that contains digital assets on a routine basis. This is because an outdated inventory or inaccessible wallet can undermine even the best-drafted estate plan.
A Florida living trust that includes digital assets should be reviewed regularly to ensure it still reflects what you own and how it is stored. Regular reviews also allow your attorney to coordinate your trust with powers of attorney and incapacity planning documents, which is critical if you become unable to manage your affairs during your lifetime.
Florida Cryptocurrency Estate Planning Checklist
Below is a practical estate planning checklist you can use when funding a trust with cryptocurrency:
- Identify all cryptocurrency holdings, including coins, tokens, NFTs, and related digital assets
- List where each asset is held (exchange accounts, hardware wallets, software wallets, cold storage, etc.)
- Decide which assets should be owned by your trust (and thereby, put into trust)
- Retain an experienced Florida estate planning attorney to properly draft and assist in executing a revocable trust
- Choose a trustee or successor trustee capable of handling digital assets
- Ensure trust documents specifically authorize the trustee to manage the cryptocurrency you choose to put into trust
- Retitle exchange accounts to the trust where appropriate
- Create a secure method for storing private keys, seed phrases, and login credentials that your trustee will know how to access
- Prepare a digital asset inventory and keep it updated
- Review and update your trust with an experienced Florida estate planning attorney on a regular basis to account for changes in your holdings, in technology, and in the law
Final Thoughts
Including cryptocurrency in a Florida trust is no longer a niche issue. Instead, it is rapidly becoming an essential part of modern estate planning. With proper legal guidance, careful drafting, and thoughtful administration planning, you can ensure that your digital wealth is protected, accessible, and passed on according to your wishes.
Working with a Florida attorney who understands both trust law and digital assets can help you avoid costly mistakes and provide peace of mind for you and your family.