MSTR Cat

Crypto Law/Level IX · Death, divorce and disputes/9.1 Inheritance/Lesson 4

Executors and fiduciary access

What legal power an executor has over a dead person’s crypto, how that power works against exchanges and devices, and the duties and personal liabilities that come with it.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. Use the smallest procedure the estate qualifies for: Florida summary administration (Fla. Stat. §735.201) is available if the non-exempt estate is $75,000 or less or the decedent died over 2 years ago; California’s affidavit route covers up to $208,850.
  2. Ask custodians in writing for a catalogue of digital assets under Fla. Stat. §740.007, with a death certificate and letters; the custodian has 60 days, and a court application is needed only if it does not comply.
  3. Before paying any debts, pay or reserve for federal tax claims: 31 U.S.C. §3713(b) makes a representative personally liable to the extent of payments made ahead of the United States.
  4. Close the tax exposure quickly: request prompt assessment under 26 U.S.C. §6501(d), which limits assessment to 18 months after request, and seek discharge from personal liability under §6905, effective 9 months after application absent IRS notice.
  5. File Form 1041 only when required, such as when estate gross income reaches $600 or a beneficiary is a nonresident alien; inherited coins take date-of-death basis, so sales soon after death often produce little gain.

MaterialsFlorida Statutes chapter 740, the Florida Fiduciary Access to Digital Assets Act (an enactment of RUFADAA)Coinbase’s help page ‘Claim a decedent’s Coinbase account’31 U.S.C. §3713(b), on a representative’s liability for paying debts before federal claimsThe Instructions for Form 1041, Question 13 (digital assets)

Wonder

  1. Does being named executor allow logging into the deceased person’s exchange account?
  2. Is it unlawful to unlock someone’s hardware wallet or laptop after they die?
  3. Can an executor be personally liable if the coins fall in value or are stolen?

Explore

  1. An executor, or personal representative, gets legal authority from a court, typically in letters testamentary or letters of administration, and custodians respond to that authority. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), approved by the Uniform Law Commission in 2015 and enacted in most states, governs how fiduciaries deal with custodians of digital assets; its general structure is covered in the Trust Law track. This lesson uses Florida’s enactment, chapter 740 of the Florida Statutes (2016), to show the parts that matter for crypto. Wording and section numbers differ in other states.
  2. For accounts with a custodian, Fla. Stat. §740.007 says that, unless the user prohibited it or a court directs otherwise, a custodian must give the personal representative a catalogue of the user’s digital assets on receiving a written request, a certified death certificate and certified letters of administration or a court order, plus account identifiers if asked. Section 740.06 then gives the custodian 60 days to comply, after which the fiduciary may apply to court. Exchanges also run their own estate processes: Coinbase asks for a death certificate, probate documents, identification and a signed letter directing the transfer, submitted through an executor services form.
  3. Self-custody raises a different question. Fla. Stat. §740.05(5) gives a fiduciary with authority over a decedent’s tangible personal property the right to access that property and any digital asset stored in it, and treats the fiduciary as an authorized user for computer fraud and unauthorized-access laws; §740.05(3) gives a similar right to digital assets not held by a custodian. That settles the legal question: an executor acting within the scope of the role may unlock the dead person’s laptop or hardware wallet. It does not settle the technical one. Without the PIN or recovery phrase, legal authority opens nothing (lesson 9.1.1).
  4. Section 740.05(1) applies the duties of care, loyalty and confidentiality that govern tangible property to digital assets, and §740.05(2)(d) says a fiduciary’s authority may not be used to impersonate the user. For crypto, care can mean acting quickly: a wallet whose phrase several relatives have seen, or an exchange account still reachable through the deceased’s email, stays exposed until the estate controls it. Federal law adds a sharp edge. Under 31 U.S.C. §3713(b), a representative who pays any debt of an estate before a claim of the United States is personally liable, to the extent of that payment, for the unpaid federal claim.
  5. The executor also inherits tax reporting. Income and gains on crypto received or sold by the estate after death go on the estate’s fiduciary income tax return, Form 1041, whose instructions (Question 13) ask whether the estate received or disposed of any digital asset during the year and define digital assets to include cryptocurrencies, stablecoins and NFTs. Coins acquired from the decedent generally take a basis equal to their value at death (lessons 2.1.5 and 7.1.5). Where an estate tax return is required, Form 706 is due nine months after death under 26 U.S.C. §6075, and the executor must value the holdings (lesson 9.1.5).
  6. A practical check for an executor’s first weeks can be framed as questions. Which custodians did the deceased use, and has each received notice of death? Which devices might hold wallets, and who physically has them now? Has anyone else seen a recovery phrase? Has anyone contacted the family offering to ‘recover’ or ‘unlock’ coins for an upfront fee, the pattern the US Federal Trade Commission describes in its warnings on refund and recovery scams? Keeping a dated record of each step and each value helps if a beneficiary later questions a decision. In the UK, personal representatives can use HMRC’s search checklist in CRYPTO25000.

Key facts

  • The Uniform Law Commission approved the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) in 2015.
  • Florida enacted its version, the Florida Fiduciary Access to Digital Assets Act, as chapter 740 of the Florida Statutes in 2016.
  • Fla. Stat. §740.06 requires a custodian to comply with a proper fiduciary request within 60 days of receiving the required information.
  • Fla. Stat. §740.05 treats a fiduciary acting within the scope of its duties as an authorized user for computer fraud and unauthorized computer access laws.
  • Under 31 U.S.C. §3713(b), an estate representative who pays other debts before a claim of the US Government is liable to the extent of that payment.
  • The Form 1041 instructions ask estates and trusts whether they received or disposed of any digital asset during the year.

Exercise nine, six, three, one

9CollectList up to 9 tasks an executor would face for the crypto of a person you know or of a hypothetical estate (some lists are shorter), such as notifying an exchange, finding devices, valuing holdings or filing a tax return.
6ClusterSort them into 6 categories: tasks needing court papers, tasks with a custodian, tasks involving devices or keys, tax and reporting tasks, security tasks, and tasks involving family or beneficiaries.
3DistillReduce the 6 categories to 3 groups: tasks that legal authority alone can complete, tasks that also need technical access, and tasks that carry personal liability if done wrong.
1CrystallizeWrite 1 sentence explaining, in your own words, the difference between an executor’s legal authority over crypto and the technical ability to move it.

Fact check

Dates, figures and claims checked against the published sources listed below.

Open in the interactive academy →

PT ES ZH JA KO RU DE FR MS