Bitcoin Information for Estate Attorney

What Estate Attorneys Need to Know About Custody

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

What Attorneys Need Versus What Others Need

Estate attorneys draft wills, create trusts, advise on estate plans, and sometimes administer estates after death. When a client holds bitcoin, the attorney needs information to do their job. What bitcoin information for estate attorney purposes looks like differs from what family members or executors need. Attorneys have specific concerns shaped by their professional role and the legal instruments they create.

This page examines what makes the estate attorney's information needs distinct. Attorneys need to draft documents that work, advise on structures that fit, and anticipate problems that legal planning can address. They need enough understanding to be competent in their role without necessarily being able to operate custody themselves. The information serves legal work, not technical access.

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What Attorneys Need Versus What Others Need

Family members need access information. Where is the bitcoin? How do we get it? The information serves immediate practical needs after something happens. Family members may never need to understand why the custody arrangement exists—just how to work it.

Executors need operational information. What assets exist? How are they accessed? Who has authority over what? Executors manage a process, coordinate parties, and account for what happens. Their information needs sit between understanding and doing.

Attorneys need structural information. How does this asset fit into an estate plan? What legal instruments address it appropriately? What problems might arise that documents can prevent? Attorneys design frameworks. They need to understand the asset enough to design for it.

These different needs sometimes overlap but often diverge. An attorney does not need the seed phrase—that would be inappropriate and create security risks. A family member does not need to understand the tax implications of different trust structures. Each role requires information shaped to its function.

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The Attorney's Professional Constraints

Attorneys practice within competence boundaries. An attorney unfamiliar with bitcoin faces a choice: develop enough understanding to advise competently, associate with someone who has that understanding, or decline to advise in this area. Information that helps attorneys assess their own competence serves this professional constraint.

Legal malpractice concerns shape attorney behavior. Drafting documents for assets they do not understand creates liability. An attorney who includes bitcoin in an estate plan without understanding how bitcoin works may create documents that fail. The information they need helps them understand whether their work product will function.

Confidentiality requirements affect what information attorneys can hold. Detailed access information—seed phrases, PINs, passphrases—creates security risks if stored in attorney files. Some information belongs in legal documents or attorney records. Other information belongs elsewhere, referenced but not contained.

Attorneys often work from incomplete information. Clients may not fully disclose holdings, may not understand their own custody arrangements, or may change arrangements without updating the attorney. The attorney creates documents based on what they know, which may not be everything. This information gap affects the attorney's work in ways they may not realize.

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Understanding the Asset's Nature

Attorneys need to understand that bitcoin ownership works differently from traditional assets. No institution holds it on behalf of the owner. No title registry records ownership. Possession of keys equals control. Legal frameworks that assume institutional custody may not apply straightforwardly.

This understanding shapes document drafting. A will can bequeath bitcoin, but the bequest does not transfer control. Control transfers when access information transfers. The legal act and the practical act are separate. Documents that acknowledge this separation work better than documents that assume they are the same.

Attorneys also benefit from understanding what legal authority can and cannot accomplish. Courts can order people to do things, but courts cannot order the blockchain to move bitcoin. Judgments that depend on institutional cooperation find no cooperating institution. Legal remedies have limits when the asset sits outside the legal system's reach.

The irreversibility of bitcoin transactions matters for estate planning. Mistakes in transferring stocks or real estate can sometimes be unwound. Mistakes in bitcoin transactions generally cannot. This permanence shapes how carefully the planning must be done and what safeguards matter.

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Information That Serves Document Drafting

Knowing that bitcoin exists is the beginning. Approximately how much matters for planning purposes—estate tax thresholds, whether trust structures are warranted, how significant this asset is relative to the overall estate. Precision to the dollar is not necessary; order of magnitude helps.

Custody method affects planning. Self-custody creates different issues than exchange custody. Multisig involves different parties than single-signature. A trust holding bitcoin has different operational needs than direct ownership. The attorney needs to understand enough about the custody method to draft documents that acknowledge its characteristics.

Access information arrangements matter more than the information itself. The attorney does not need the seed phrase but does need to know how the seed phrase is handled. Is it written down? Stored where? Who knows about it? This meta-information about access helps the attorney understand what the estate plan must accommodate.

Existing documentation helps attorneys understand what they are working with. If the client has created letters of instruction, custody guides, or other informal documents, the attorney can review them for consistency with formal estate documents. Gaps between informal and formal planning create problems.

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What Attorneys May Not Know to Ask

Attorneys unfamiliar with bitcoin may not know what questions are relevant. They may ask about accounts and balances as they would for bank accounts, not realizing that self-custody bitcoin has no institution to send statements. They may assume standard estate provisions cover bitcoin without checking whether those provisions actually work.

Specific bitcoin complexities may not surface without prompting. Does the client use a passphrase in addition to a seed phrase? Does the custody involve multiple keys requiring coordination? Are there timelock conditions or other programmatic restrictions? An attorney who does not know these things exist cannot ask about them.

The attorney may not know to ask about obsolescence risks. What if the wallet software becomes unsupported? What if the hardware manufacturer goes out of business? What if the custody arrangement depends on technology that changes? These questions require understanding the technical landscape that attorneys often lack.

Tax complexity may also exceed attorney awareness. Bitcoin transactions can create taxable events that traditional assets do not. Cost basis tracking is complicated. Reporting requirements exist that may not be obvious. An attorney's tax understanding from traditional assets may not fully transfer.

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The Communication Challenge

Clients with bitcoin may not know what their attorneys need to know. They may assume the attorney understands cryptocurrency when the attorney does not. They may provide technical details that are irrelevant to legal planning while omitting information that is essential. The communication gap runs both directions.

Vocabulary differences create misunderstandings. A client saying "my bitcoin wallet" might mean a hardware device, a software application, or an exchange account—each with different implications for estate planning. The attorney hearing this phrase may not know to ask which type. Imprecise language obscures important distinctions.

Attorneys may not want to reveal their own ignorance. Professional pride may prevent them from admitting they do not understand what the client is describing. Rather than asking clarifying questions, they may proceed with incomplete understanding. This dynamic serves no one well.

Written communication about bitcoin creates records that have security implications. Email discussing seed phrase locations or access methods creates exposure if the email is compromised. In-person conversations may be safer for certain details. The attorney's normal practices for client communication may need adjustment.

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What Attorneys Do With the Information

Estate documents must reference bitcoin appropriately. Generic language covering "all assets" may technically include bitcoin, but specific provisions may work better. How bitcoin is described in wills, trusts, and powers of attorney affects whether the documents accomplish what they intend.

Fiduciary appointments require consideration of bitcoin capability. A trustee or executor who cannot handle bitcoin creates problems. The attorney may need to recommend specific appointments or co-fiduciary arrangements based on who can actually manage the asset. Information about the client's network helps identify appropriate appointees.

Tax planning around bitcoin requires specific knowledge. Capital gains treatment, cost basis methods, and reporting requirements all affect planning. An attorney advising on estate tax minimization needs to understand how bitcoin fits into those strategies—or needs to involve a specialist who does.

Coordination with other professionals becomes more likely. The attorney may need to work with accountants, financial advisors, or technical consultants who understand aspects the attorney does not. Information about who else advises the client, and what those advisors know, helps the attorney coordinate appropriately.

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Conclusion

Bitcoin information for estate attorney purposes serves legal work rather than technical access. Attorneys need structural information to draft documents, advise on planning, and anticipate problems—different from the access information family members need or the operational information executors need.

Professional constraints shape what information attorneys can and should hold. Competence boundaries, malpractice concerns, and confidentiality requirements all affect the attorney's relationship with bitcoin-related information. Understanding the asset's nature helps attorneys draft documents that actually work.

Communication gaps run both directions. Attorneys may not know what questions to ask, and clients may not know what information matters for legal planning. Bridging this gap requires both parties to work past vocabulary differences, professional pride, and assumptions about what the other understands.

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System Context

Examining Bitcoin Custody Under Stress

Telling an Attorney About Bitcoin

Can Attorney Access Bitcoin Estate: Modeled Authority and Coordination Limits

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