Cryptocurrency and California Estate Litigation: What Heirs and Beneficiaries Need to Know

by Michael Hackard

Publication Date October 9, 2026 in Estate Litigation

Why Crypto Is Now an Estate Dispute Problem

I’m Michael Hackard, founder of Hackard Law. Over five decades of practice, I have fought for heirs, beneficiaries, and elder abuse victims across California  –  from Sacramento and the San Francisco Bay Area to Los Angeles. I have authored four books on inheritance protection and produced more than 1,000 educational videos that have reached over seven million viewers. In all that time, I have watched new asset classes emerge and reshape how estates are administered, contested, and litigated. Cryptocurrency is the most significant shift I have seen in recent years.

Gemini, a major cryptocurrency exchange, estimates that roughly 21 million American adults  –  about 14% of the adult population  –  now own some form of cryptocurrency. That number is climbing. As crypto moves into mainstream portfolios, it is showing up with increasing frequency inside trusts, estates, and inheritance disputes. Families, trustees, and courts are all being asked to grapple with an asset class that most people still do not fully understand.

Hackard Law provides contingency fee representation for qualified estate and trust cases  –  no upfront costs to you. To discuss your situation, call us at (916) 313-3030.

Quick Summary

Cryptocurrency is becoming a meaningful part of California estates, and its unique characteristics create real challenges for trustees, beneficiaries, and courts handling inheritance disputes.

• Approximately 21 million American adults own cryptocurrency, and ownership rates continue to rise.
• Crypto assets are poorly understood by most non-owners, creating valuation and access problems in estate administration.
• Trustees who fail to account for or properly manage crypto holdings may expose themselves to liability.
• Heirs and beneficiaries may have difficulty identifying, accessing, or recovering crypto assets without legal intervention.
• California courts are still developing the legal frameworks needed to address crypto in estate disputes.

The Scale of the Problem for California Families

When most people think about estate disputes, they picture a family home, a bank account, or a brokerage portfolio. Those remain the most common assets in the cases Hackard Law litigates. But cryptocurrency is moving up the list. The asset management industry is actively developing new crypto products, and institutional adoption is accelerating. What was once a niche holding is becoming a standard line item in financial portfolios  –  and eventually, in estates.

The challenge is not just legal. It is practical. Only about 3% of non-owners of cryptocurrency report that they understand how crypto works. Nearly 60% of non-owners have neither heard of it nor understand it at all. That knowledge gap does not disappear when someone dies and their estate goes through administration. Trustees, heirs, and even attorneys are frequently unprepared to handle crypto assets properly.

For beneficiaries, this creates a real risk. A trustee who does not understand crypto may fail to secure it, may allow it to lose value through inaction, or may not even disclose it as a trust asset. You can learn more about your rights when a trustee fails to act appropriately by reviewing what California beneficiaries can do when a trustee delays distributions without cause.

Access, Security, and the Unique Risks of Digital Assets

Cryptocurrency is not like cash in a bank account. It is controlled by private keys  –  long strings of characters that function as passwords. If those keys are lost, the crypto is gone. There is no customer service line, no account recovery process, and no FDIC protection. When a person dies without leaving clear instructions about how to access their crypto holdings, the assets can become permanently inaccessible.

This creates a category of inheritance dispute that California courts are only beginning to address. A beneficiary who knows a loved one held Bitcoin or Ethereum but cannot locate the private keys faces a problem that is both technical and legal. Discovery in trust litigation can sometimes uncover evidence of crypto holdings  –  wallet addresses, exchange account records, transaction histories  –  but the process requires attorneys who understand what to look for.

Case Pattern: A family member serving as successor trustee discovers references to a cryptocurrency exchange account in the decedent’s financial records but cannot locate login credentials or private keys. The exchange requires proof of legal authority before releasing any account information. Litigation and formal discovery become necessary just to determine what assets exist  –  before any dispute about distribution can even begin.

For a broader picture of how common these asset battles have become, the top 10 most common probate, trust, and estate battles offers useful context.

Trustee Duties in the Age of Cryptocurrency

California trustees have a legal obligation to identify, protect, and administer all trust assets  –  including digital assets. That duty does not shrink because an asset is unfamiliar or technically complex. A trustee who ignores crypto holdings, fails to secure them, or allows them to be dissipated may be held personally liable for the resulting loss.

The volatility of cryptocurrency adds another layer of complexity. Unlike a savings account, crypto values can swing dramatically in short periods. A trustee who delays action on a crypto holding  –  whether out of ignorance or indifference  –  may face claims that the delay caused measurable harm to the beneficiaries. Trustees in this position should get legal guidance immediately.

Case Pattern: A trustee inherits administration of an estate that includes a significant cryptocurrency position. Uncertain about their authority to sell, they hold the position for months while the market declines sharply. Beneficiaries later argue that the trustee’s inaction breached their fiduciary duty. The outcome depends heavily on what steps the trustee took to seek guidance and document their decisions.

Beneficiaries who believe a trustee is mishandling crypto or other assets should understand their rights. The five things California trust beneficiaries must know is a good starting point.

How the Law Is Catching Up  –  Slowly

Oliver Wendell Holmes wrote that the life of the law has not been logic  –  it has been experience. That observation is as true today as it was when Holmes wrote it. California law governing digital assets is still developing. The Revised Uniform Fiduciary Access to Digital Assets Act, adopted in California, gives trustees some authority to access digital accounts, but the practical mechanics of crypto access remain unsettled in many situations.

Courts are being asked questions they have never faced before: How do you value a crypto asset for estate purposes when the price changes by the hour? Who bears the loss if crypto is inaccessible because the decedent failed to document their private keys? Can a trustee be held liable for failing to liquidate a volatile asset? These questions do not yet have clean answers, and that uncertainty creates both risk and opportunity in litigation.

For families navigating these issues in Los Angeles, estate litigation resources specific to the LA region may be helpful. Families in the Sacramento area can explore Sacramento will and trust contest representation for disputes involving crypto and other contested assets.

Discovery, forensic analysis, and the pursuit of justice  –  these are not just legal strategies, but safeguards for families threatened by asset concealment and the mismanagement of emerging wealth. For decades, I have stood with families who were told their claims were too complicated, too novel, or too uncertain to pursue. Cryptocurrency disputes are the next frontier of that work, and I am committed to staying ahead of it.

Key Definitions

• Cryptocurrency: A digital or virtual currency secured by cryptography and recorded on a decentralized ledger called a blockchain. Bitcoin and Ethereum are the most widely held examples.
• Private key: A secret alphanumeric code that grants access and control over a cryptocurrency wallet. Loss of the private key typically means permanent loss of the asset.
• Wallet: A software or hardware tool that stores the private keys needed to access and manage cryptocurrency holdings.
• Blockchain: A distributed digital ledger that records all cryptocurrency transactions in a permanent, tamper-resistant format.
• Fiduciary duty: The legal obligation of a trustee or executor to act in the best interests of the beneficiaries, including properly managing and accounting for all assets.
• Digital asset: Any asset that exists in electronic form and carries value, including cryptocurrency, NFTs, and online financial accounts.
• Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA): California law that governs a fiduciary’s authority to access and manage digital assets belonging to a decedent or trust.
• Breach of fiduciary duty: A trustee’s failure to meet their legal obligations, which can include failing to identify, secure, or properly manage trust assets such as cryptocurrency.
• Contingency fee: A fee arrangement in which the attorney is paid only if the case is won or settled, with no upfront cost to the client.

What to Do Next

• Look for any documentation of cryptocurrency holdings in the decedent’s financial records, including exchange account statements, hardware wallets, or written notes about passwords.
• Get copies of all trust and estate documents as early as possible to understand what assets should be accounted for.
• Try to avoid making any unilateral decisions about crypto assets before consulting an attorney  –  errors can be irreversible.
• Look for evidence of exchange accounts by reviewing email records, tax returns (crypto transactions may be reported), and browser history if you have lawful access.
• Ask the trustee or executor for a full accounting of all assets, including digital holdings  –  this is your right as a beneficiary.
• Try to avoid delay; crypto values are volatile and waiting can result in significant loss or permanent inaccessibility.
• Consult with an attorney who understands both trust litigation and digital assets before taking any action to access or liquidate crypto holdings.
• Review the contingency fee guide for California trust and estate litigation to understand your options for pursuing a case without upfront costs.
• Call Hackard Law at (916) 313-3030 to discuss your estate or trust dispute involving cryptocurrency or other assets.
• Reach out through our contact page to schedule a free consultation.

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