Bitcoin Custody Summary for Attorney
Custody Briefing for Estate Planning Attorneys
This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.
What Attorneys Need to Know
Attorneys who assist with estate planning, business matters, or other legal needs may need to understand their client's bitcoin holdings. A bitcoin custody summary for attorney bridges the gap between technical custody reality and what a legal professional needs to know. Attorneys typically lack cryptocurrency expertise, yet they need enough understanding to provide competent legal advice.
The summary serves a translation function. Technical details meaningful to bitcoin users become meaningless jargon to most attorneys. Relevant legal considerations that attorneys recognize must be connected to custody arrangements they do not intuitively understand. The summary enables professional communication across this knowledge gap.
What Attorneys Need to Know
Attorneys need information relevant to their professional function. They do not need to understand bitcoin technically; they need to understand it sufficiently to fulfill their legal role. This distinction shapes what the summary contains.
Existence and approximate value inform overall planning. Is bitcoin a significant part of the estate? Does it represent substantial value requiring special attention? Approximate magnitude helps attorneys assess how much attention bitcoin deserves relative to other assets.
Custody structure affects legal treatment. Is the bitcoin held directly by the client? Held by an exchange or custodian? Held in a trust? Held jointly or in a multisig arrangement with others? These structural questions have legal implications attorneys can engage with once they understand the structure.
Access mechanisms affect inheritance planning. What needs to happen for heirs to access the bitcoin? Legal documents alone may be insufficient. The attorney needs to understand that this asset differs from bank accounts they can simply notify with letters testamentary.
Risk factors the attorney might not anticipate need highlighting. The bitcoin could become inaccessible if certain information is lost. The bitcoin has no customer service number. The bitcoin cannot be recovered through legal process alone. These differences from traditional assets shape how the attorney approaches planning.
Avoiding Technical Overload
A custody summary for an attorney is not a technical manual. Excessive technical detail obscures the information the attorney actually needs. The summary must communicate without drowning the reader in unfamiliar concepts.
Analogies to familiar concepts help attorneys understand. A seed phrase is like a master key that can regenerate all access. A hardware wallet is like a specialized secure device that holds signing capability. Multisig is like requiring multiple signatures on a check. These analogies are imprecise but convey function without requiring technical mastery.
Implications matter more than mechanisms. The attorney does not need to understand how cryptographic signing works; they need to understand that without the seed phrase, the bitcoin cannot be accessed regardless of legal authority. Focus on what this means for legal planning, not how the technology accomplishes it.
Flagging what is different from traditional assets serves the attorney's needs. Traditional assets have institutional custodians who respond to legal process. Bitcoin may not. Traditional assets can generally be recovered through courts. Bitcoin cannot. Highlighting these differences alerts the attorney to where their standard approaches may fail.
Structural Information
The attorney needs to understand the custody structure sufficiently to draft appropriate documents and provide sound advice. Structural information describes how custody is organized without requiring technical depth.
Single-person custody means only the holder controls access. No company holds the bitcoin. No institution can help if access is lost. The holder is solely responsible, and after death, whoever has the custody materials controls the bitcoin.
Exchange or custodian custody means a company holds the bitcoin. This structure resembles traditional brokerage, with accounts that can be accessed through third-party processes. The attorney's familiar approaches may work better here.
Multi-party custody involves multiple people in control. Access requires coordination—perhaps multiple signatures or accessing materials from multiple locations. The attorney needs to understand who these parties are and what their cooperation requires.
Mixed custody may apply to different portions of holdings. Some bitcoin might be self-custody while other bitcoin sits on an exchange. The attorney needs to understand the overall picture, not just one piece of it.
Legal-Technical Interface Points
Certain points where legal planning intersects technical reality warrant specific attention. These interface points are where the attorney's work must account for cryptocurrency's characteristics.
Legal authority does not equal technical access. An executor with letters testamentary has legal authority but may not have technical access to self-custody bitcoin. The attorney must understand that legal documents alone do not enable access. Technical arrangements must complement legal arrangements.
Fiduciary duties apply but implementation differs. A trustee holding bitcoin has fiduciary duties around prudent management. What constitutes prudent management for bitcoin differs from what constitutes prudent management for traditional assets. The attorney advising fiduciaries needs to understand this difference.
Tax treatment involves technical details. Cost basis tracking, transaction classification, and reporting requirements all have technical components. The attorney or accountant handling tax matters needs enough technical information to handle these correctly.
Valuation challenges affect estate administration. Bitcoin value changes constantly and differs across exchanges. What valuation applies for estate tax purposes? What documentation supports chosen valuations? The attorney needs to understand these challenges even if they cannot resolve them technically.
What the Summary Does Not Include
A custody summary for an attorney differs from comprehensive custody documentation. The attorney does not need—and likely should not have—certain information.
Seed phrases and access credentials belong elsewhere. The attorney's role is advising, not holding custody. Providing the attorney with actual access credentials serves no professional purpose and creates unnecessary exposure risk.
Step-by-step technical procedures exceed the attorney's need. The attorney does not need to know how to restore a wallet. They need to know that wallet restoration is possible and what it requires. Procedural detail belongs in documentation for those who will actually execute procedures.
Detailed transaction histories serve accounting purposes, not legal planning purposes. The attorney may need to know holdings exist and their approximate value, not every transaction that occurred. Summary-level information suffices for most legal functions.
Technical troubleshooting guidance belongs elsewhere. The attorney is not going to troubleshoot custody problems. They need to know who can troubleshoot and that troubleshooting may be necessary. The actual guidance belongs with whoever will perform it.
Questions the Attorney May Ask
Preparing a custody summary benefits from anticipating what questions the attorney will have. Understanding these questions shapes what information the summary provides.
How do we ensure heirs can access this? The attorney thinks in terms of estate administration. They need to understand that technical access arrangements must complement legal documents, not that legal documents alone suffice.
What happens if the custody information is lost? The attorney assesses risks. They need to understand that loss of certain information means permanent loss of the bitcoin—a risk profile unlike traditional assets that can generally be recovered through institutional or legal processes.
Who else has access or control? The attorney needs to know about any other parties involved—whether exchange accounts, multisig participants, custody services, or family members with partial information. Complete picture of control affects legal advice.
What documentation exists? The attorney wants to know what written records exist and where they are. This connects technical arrangements to the broader documentation picture the attorney is assembling.
Updating the Attorney Summary
Custody arrangements change. When they do, the attorney summary may need updating. Maintenance obligations attach to attorney summaries as they do to other custody documentation.
Significant changes warrant attorney notification. Moving from exchange custody to self-custody changes the legal picture substantially. Adding or removing multisig parties changes control structure. These significant changes may affect legal documents the attorney previously drafted.
Value changes may warrant reassessment. If bitcoin value grows substantially, the attorney may need to revisit estate planning strategies. What worked for modest holdings may not work for substantial ones. Periodic value updates inform whether legal review is warranted.
Life changes intersect with custody status. Marriage, divorce, birth of children, death of beneficiaries—these life events prompt legal review anyway. Ensuring the attorney has current custody information during these reviews maintains alignment between legal and technical arrangements.
Scheduled reviews maintain currency. Even without specific changes, periodic review—perhaps alongside regular estate planning reviews—confirms the attorney has accurate information. Stale summaries may mislead attorney advice.
Attorney Selection Considerations
How attorneys receive and respond to custody summaries varies with their experience. Attorney selection interacts with how effectively custody information translates to good legal advice.
Cryptocurrency-experienced attorneys need less translation. An attorney who has advised other bitcoin clients already understands the basics. Their questions will be more sophisticated, and the summary can be more technical. Finding such attorneys may be challenging depending on location.
Willing-to-learn attorneys can be briefed effectively. An attorney without cryptocurrency experience but with willingness to learn can develop adequate understanding through summary review and follow-up discussion. The summary serves as educational material as well as planning input.
Resistant attorneys may not serve bitcoin holders well. An attorney who dismisses cryptocurrency as not real money, too complicated to bother with, or not worth their time may not provide adequate attention to significant bitcoin holdings. The summary's reception may reveal attorney fit issues.
Specialist referrals may complement general counsel. A general estate planning attorney might work with a cryptocurrency specialist for technical aspects. The summary helps the general attorney understand why specialist involvement may help.
Summary
A bitcoin custody summary for attorney provides legal professionals with the information they need to advise effectively without overwhelming them with technical detail. Attorneys need to understand existence and value, custody structure, access mechanisms, and risk factors that differ from traditional assets.
The summary translates technical reality into legally relevant information. Analogies help attorneys understand unfamiliar concepts. Implications matter more than mechanisms. What differs from traditional assets deserves emphasis. Legal-technical interface points—where legal planning must account for cryptocurrency characteristics—warrant specific attention.
The summary excludes seed phrases, detailed procedures, and technical troubleshooting guidance. It anticipates attorney questions about heir access, loss risks, other parties with control, and existing documentation. Updates maintain accuracy as custody arrangements change. Attorney selection affects how effectively the summary translates into good legal advice.
System Context
Examining Bitcoin Custody Under Stress
Telling an Attorney About Bitcoin
Financial Advisor Fiduciary Exposure to Bitcoin Custody Risk
For anyone who holds Bitcoin — on an exchange, in a wallet, through a service, or in self-custody — and wants to know what happens to it if something happens to them.
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