“Nothing is certain in this world except death and taxes.”
Benjamin Franklin wrote these words in 1789. If he were alive today, he would probably add a third assurance.
If you don’t plan your digital inheritance, a significant portion of your wealth will disappear.
Every tax season, we go through the same ritual of gathering documents, logging into accounts, reconciling statements, and finally getting a clear picture of what we actually own.
That’s why tax season is the best moment to sort out your cryptocurrency and digital inheritance. You’re already doing the hard part: creating an asset inventory. All you have to do is take that idea one step further.
“If I get hit by a bus tomorrow… who will have access and how?”
Let’s take a look at how to turn an annual tax problem into a quiet act of love for your future heirs.
Tax Season’s Hidden Superpower: Inventory Your Assets
Most people think of taxes as a punishment rather than a planning tool. But when we look at what we actually do each year, the following facts are compelling:
- List your employers and sources of income.
- Collect bank and brokerage statements.
- Track profit, loss and cost basis.
- Keep track of your assets, side hustles, investments and loans.
In other words, you build a living snapshot of your financial life.
This snapshot is essential to your heirs and executors someday. The gap is as follows:
- It’s usually in your head, scattered across your emails, or dumped in a folder called “2025 Taxes.”
- They rarely include digital spaces or crypto assets in a structured way.
So tax season becomes the moment when you almost have everything you need for a good estate plan. But then you have to hit “submit,” breathe a sigh of relief, and bury your work for another year.
Most people think of taxes as a punishment rather than a planning tool. But when we look at what we actually do each year, the following facts are compelling:
- List your employers and sources of income.
- Collect bank and brokerage statements.
- Track profit, loss and cost basis.
- Keep track of your assets, side hustles, investments and loans.
In other words, you build a living snapshot of your financial life.
This snapshot is essential to your heirs and executors someday. The gap is as follows:
- It’s usually in your head, scattered across your emails, or dumped in a folder called “2025 Taxes.”
- They rarely include digital spaces or crypto assets in a structured way.
So tax season becomes the moment when you almost have everything you need for a good estate plan. But then you have to hit “submit,” breathe a sigh of relief, and bury your work for another year.
Missing Column: Digital and Crypto Assets
Traditional estate planning is still stuck in the following issues:
- house
- bank account
- mediation
- retirement account
- insurance
But now real life includes:
- Bitcoin, Ethereum and other tokens
- NFTs and digital art
- DeFi Platforms and Assets on L2
- Staked Assets and Return Strategies
- Exchange accounts (even “little” accounts you may have forgotten about)
- password manager
- Encrypted notes and backups
- 2FA app and hardware keys
- Cloud storage for important documents, photos, and IP
The most difficult part for heirs is not taxes, but discovery and access.
- Discovery – “What did they have and where are they?”
- Access – “How do I unlock it without a password or key?”
Without answers to these two questions, even perfectly legal and well-structured assets will still leak value. In cryptocurrency, “leaked” usually means “gone forever.”
The Brutal Truth: Real Estate Law Can’t Recover Lost Private Keys
In traditional finance, forgetting your password can be frustrating, but it’s solvable.
- There is a help desk.
- There is KYC.
- There is a paper trail.
If you use cryptocurrency, your heirs do not have:
- seed phrase
- private key
- social recovery methods
- or hardware wallet PIN + recovery
…then your assets are effectively burned.
Death certificates, probate orders, and court documents have no meaning on blockchain. The network doesn’t know that you’re dead. We only know valid signatures.
That’s why cryptocurrency inheritances should be planned out in advance with the same level of care you put into optimizing your tax bill.
Transform Tax Preparation into Inheritance Preparation: 6 Simple Steps
You don’t have to be a lawyer or a security engineer. All you have to do is add a few extra steps to what you already do every year.
1. Expand your asset inventory to include digital.
While collecting statements for tax reporting and logging into the platform, create one master inventory that includes:
- Any exchange you use (even “test” accounts with small balances)
- All wallets (hardware, mobile, browser, paper)
- All major on-chain positions (Staking, DeFi, L2, NFT)
- All management platforms (CeFi yield platforms, centralized staking, etc.)
- Important digital services:
- password manager
- Cloud storage with important documents
- Domain registrar, app store account, creator platform (if you have IP or revenue)
Treat this like a cryptocurrency and digital asset schedule to keep alongside your traditional tax and property documents.
2. Label the ‘where’ and ‘how’.
For each item in your inventory, add two brief pieces of information.
- Where is it?
- Exchange name, wallet type, protocol or chain
- How is it protected?
- Hardware wallet, seed phrase in vault, multi-signature, social recovery, etc.
You’re not putting any actual secrets in this list, just a map, not a key.
Think of it like this: If you weren’t around, would your executioner at least have known which hill to dig down?
3. Decide who will ultimately inherit what.
Estate planning may sound technical, but it is emotional at its core.
- Who do you want to benefit with Bitcoin, ETH or NFTs?
- Are there certain assets that are more meaningful to certain people – digital art, the ENS name, in-game assets, creator royalties, etc.?
- Do you want to give a portion of your cryptocurrency to a foundation, DAO, or non-profit organization?
You can formulate your distribution wishes as follows:
- your will
- letter of wish
- Separate digital asset notes known to the executor
The key is that you’re already thinking about percentages and allocations come tax time. You can extend this thinking a step further to “What if I weren’t here next year?”
4. Build a secure way to communicate secrets (don’t share them now)
This is the biggest practical challenge.
How do you ensure that your heirs only have access to your keys when they really need to?
Here are some approaches people use:
- Multi-signature wallet where a trusted person or entity holds one key
- Shamir’s secret sharing or other threshold schemes where portions of the secret are split between multiple “guardians”
- Dedicated crypto inheritance tool combining encryption, sharding, and social recovery
- An asset-aware password manager plan that allows trusted contacts to access confirmed events.
Here’s what you don’t want to do:
- Enter seed phrases directly into the will (in many jurisdictions, these are revealed through probate).
- Email your seed phrase to yourself or someone else.
- Put everything in a safe where no one exists
The ideal pattern would be:
Your inventory and intent are searchable,
Your keys and instructions are recoverable but strongly protected.
The entire system does not depend on any one person’s memory.
5. Document “how to use this” in human language
Your heirs may not be cryptocurrency-based. They may be afraid of doing something wrong.
So, add a plain English guide along with your technology plan.
- “If I’m not available, please tell me who to contact first.”
- “This is where you can find the inventory of your account and wallet.”
- “These people/platforms have a part in helping you unlock access.”
- “Before moving anything, seek the assistance of a reputable attorney or advisor familiar with cryptocurrency.”
- “Do not share seed phrases in emails, texts or on random websites promising recovery.”
You can think of this as a “Meet Joe Black” note to your future self and family. This is something that lawyers and accountants usually skip, but which humans desperately need.
6. Make it an annual habit: “Death and Tax Day”
Finally, turn this into a ritual.
Once a year – when you pay your taxes:
- Update your asset inventory (including new wallets, protocols, or accounts).
- Make sure your inheritance mechanisms (social recovery/Shamir/multi-signature/tool of choice) are still working and the right people are involved.
- Modify your instructions and wishes if your relationships or possessions change.
You don’t have to obsess over it all year long. Pair that with something that is legally enforceable anyway.
If death and taxes are inevitable, it might be a good idea to take away tax day to make the deaths of your loved ones a little less confusing.
Why This Matters More Every Year
annually:
- More net worth is moving from the physical world to the digital world.
- More platforms, protocols and wallets come into your life.
- Your stories, photos, messages, creations, IP and more are kept behind your encrypted login.
Failure to plan doesn’t mean your family might end up paying more in taxes.
In the digital world, this means you don’t even know what’s missing.
Thoughtful crypto and digital estate planning includes:
- Financial decisions (don’t drain your assets by neglecting them)
- Security decisions (don’t leak secrets prematurely)
- And above all, a loving decision (don’t leave a puzzle that no one can solve)
Tax season provides the raw materials for this plan every year. The next step is simply to decide.
“This is the year to stop pretending I’ll live forever and make sure my digital life is as organized for my heirs as it is for the tax office.”
If you would like, we can do the following for you now:
- Add a short introduction about your Vault12/product as a “How to” section.
- Turn this into a shorter LinkedIn version or email newsletter.
- Or create a 5-point checklist graphic that you can use as a lead magnet. “Converting tax time to cryptocurrency inheritance time”