The $380,000 Discovery
Sarah Okonkwo knew her husband Mark had "some crypto." He had talked about it at dinner a few times — Bitcoin when it was cheap, some Ethereum, maybe something else. She thought of it roughly the way she thought of the two guitars in the garage: a hobby that might or might not be worth money someday.
Mark died of a heart attack at forty-four. He was a senior software engineer at a tech company in Frisco, healthy by every outward measure, and completely unprepared for this outcome in one specific way: the $380,000 he held in Bitcoin and Ethereum existed on a hardware wallet in his home office, protected by a twenty-four-word seed phrase he had written on a laminated card that he kept — she eventually found it — taped inside the false bottom of a desk drawer.
The false bottom was supposed to be clever. It turned out to be the most important physical object in the estate.
Sarah found the card six weeks after Mark died, while clearing out the office. By then she had already spent four weeks with a probate attorney trying to understand what the estate even contained. The family home in Frisco. Two retirement accounts. A taxable brokerage account at Fidelity. And then, somewhere, the crypto — in what quantity, held how, accessible by whom, none of that was clear from any document Mark had left behind.
The seed phrase card changed everything. Sarah could now access the wallet. But accessing it and knowing what to do with it — legally, strategically, and from a tax standpoint — turned out to be two entirely different problems.
The Okonkwos are a hypothetical, but Sarah's situation is not. Across Collin County — in McKinney, Frisco, Plano, Allen, and Prosper — there are thousands of households with meaningful cryptocurrency holdings and no estate plan that accounts for them. What most of those households do not know is that dying with cryptocurrency in Texas creates not only risks but also a significant tax opportunity that disappears the moment the crypto is given away or sold before death.
What the Law Actually Says: Texas RUFADAA
Texas adopted the Revised Uniform Fiduciary Access to Digital Assets Act in 2017. It lives in Chapter 2001 of the Texas Estates Code, and it governs one specific but critical question: can your executor, trustee, or other fiduciary legally access your digital accounts and assets after you die or become incapacitated?
The answer under Texas law is yes — with conditions. Under Texas Estates Code § 2001.101, a personal representative of a decedent's estate is entitled to access digital assets of the decedent. Under § 2001.102, a trustee who administers a trust that holds digital assets is entitled to access those assets. The statute creates a legal right to access that overrides the terms-of-service agreements that most digital platforms use to prohibit account sharing.
Here is the critical limitation: RUFADAA gives your executor the legal right to access your accounts. It does not give them the technical ability to do so. The private key to a self-custody crypto wallet is not a document the exchange can produce. The seed phrase is not stored anywhere other than where you put it. Texas law can authorize your executor to open a door; it cannot tell them where you hid the key.
This is the gap that families fall into. And it is why crypto estate planning requires something more than a will that mentions cryptocurrency in passing. It requires a deliberate plan for custody, access, and transfer — and, if the holdings are substantial, a tax strategy built by someone who understands what the law does and does not allow.
The Tax Opportunity Most Crypto Holders in DFW Don't Know About
Here is the counterintuitive fact at the center of crypto estate planning: for many holders, dying with appreciated cryptocurrency is the most tax-efficient outcome available.
Under Internal Revenue Code § 1014, the income tax basis of an asset received by a beneficiary through inheritance is "stepped up" to the fair market value of the asset on the date of the decedent's death. This rule applies to stocks, real estate, bonds — and cryptocurrency. It has applied to cryptocurrency since the IRS confirmed in Revenue Ruling 2023-14 that crypto is treated as property for federal income tax purposes.
What this means in practice: if Mark bought one Bitcoin at $5,000 in 2019 and it was worth $65,000 when he died, Sarah's basis in that Bitcoin is $65,000 — not $5,000. If Sarah sells it the following week for $65,000, she pays no capital gains tax. The $60,000 in appreciation that occurred during Mark's lifetime disappears from the tax ledger entirely at death. It is not deferred. It is not taxed at death. It is gone.
For a Frisco software engineer who bought Bitcoin early, or who received crypto compensation, or who has held Ethereum through multiple market cycles, this step-up can represent hundreds of thousands of dollars in capital gains that simply evaporates when the right estate plan is in place.
The planning implication is significant. If you own appreciated cryptocurrency, giving it away during your lifetime — even to children or a charity — generally triggers a taxable event and your original cost basis transfers with the gift. Selling it before death triggers capital gains tax at rates up to 23.8% (20% long-term rate plus 3.8% Net Investment Income Tax). But leaving it in your estate, with a properly designed plan to transfer it to your heirs at death, preserves the step-up and eliminates the tax on all appreciation that occurred before your death.
This is not a loophole. It is an intentional feature of the federal tax code — one that has been available for decades and was extended to digital assets as a matter of settled IRS guidance. But capturing it requires actually having an estate plan. And it requires having an attorney who understands the interaction between estate planning, crypto custody, and tax law.
When the Step-Up Doesn't Help: Estate Tax Exposure
The step-up is powerful, but it operates within limits. The federal estate tax applies to estates that exceed the applicable exclusion amount — currently $13.99 million per individual for decedents dying in 2025, or $27.98 million for a married couple using portability. Cryptocurrency counts toward this threshold alongside real estate, retirement accounts, business interests, and every other asset in the estate.
For most North Texas families, the federal estate tax is not a present concern. But for a Frisco tech executive who holds significant crypto alongside equity compensation, deferred income, and real estate — or for a couple who together hold assets approaching eight figures — the calculation changes. The estate tax rate is 40% on the taxable amount above the exclusion, and appreciated cryptocurrency can push an estate into taxable territory faster than many families expect, particularly in years when crypto markets have run.
Federal estate tax planning for crypto-holding families involves a different set of tools: irrevocable trusts, charitable strategies, annual exclusion gifting programs (where the transfer of some crypto during life makes sense despite the basis trade-off), and spousal planning. These strategies require someone who has done the math — not just someone who is familiar with wills and trusts in general terms.
Carla Alston, WG Law's estate planning and tax attorney, holds an LL.M. in Taxation from New York University School of Law — the most respected tax LL.M. program in the country — and has been practicing estate and tax law in Texas since 1986. Before opening her own practice, she served as in-house tax counsel at Alcon Laboratories and at Eckert Seamans. She understands the interaction between estate tax planning and capital gains planning because she spent years living inside it as a corporate tax lawyer, and because — as the widow of a crypto holder — she has experienced the inheritance gap from the inside.
The Self-Custody Problem: Hardware Wallets, Seed Phrases, and Private Keys
Sarah Okonkwo found the seed phrase card by accident. Many families never find it. Approximately 20% of all Bitcoin in existence — an estimated 3.7 to 3.8 million coins — is considered permanently inaccessible, largely because the private keys that control those wallets have been lost. When the key is gone, the crypto is gone. No court order, no Texas RUFADAA provision, and no amount of attorney skill recovers a self-custody wallet without the private key or seed phrase.
This is the technical reality of self-custody: control and risk live in the same place. A hardware wallet (Ledger, Trezor, Coldcard) stores the private key offline, away from exchange hacks and internet exposure. That is its virtue. Its consequence is that the seed phrase — the twenty-four words that regenerate the private key — is the only recovery mechanism if the device is lost, stolen, or damaged. If the seed phrase is not accessible to your estate, the crypto is not accessible to your estate.
Exchange-held crypto (Coinbase, Kraken, Gemini, Binance.US) is different. Exchanges maintain accounts with their own authentication systems, and most have estate transfer procedures that comply with RUFADAA. Your executor can present the exchange with a death certificate, letters testamentary, and the required account verification, and the exchange will transfer the assets to the estate. The process takes weeks to months and requires specific documentation, but it does not require a seed phrase. The trade-off: exchange-held crypto is subject to the exchange's solvency, regulatory environment, and security practices.
Most sophisticated crypto holders split the difference: they hold some assets on exchanges for liquidity and some in self-custody for security. An estate plan must account for both.
What a Crypto Estate Plan in Texas Actually Includes
Questions about estate planning? A WG Law attorney can walk you through your options.
A proper estate plan for a North Texas family with meaningful cryptocurrency holdings includes several elements that a standard will-and-trust package does not.
A Comprehensive Digital Asset Inventory
Separate from the will itself — which becomes a public record when probated — your estate plan should include a private letter of instruction that catalogs every digital asset: exchange accounts and their login credentials, hardware wallet locations, seed phrase storage locations, and the approximate value of holdings as of the last update. This document should be accessible to your executor (or trustee) without requiring probate court involvement, should be updated when holdings change materially, and should never be filed with the court or stored in a location where it can be publicly accessed.
The seed phrase itself should not be stored on any internet-connected device. Options include a fireproof home safe, a safety deposit box with an authorized signer, or a professional custody service. Some crypto-holding families split the seed phrase across two or three physical locations (following Shamir's Secret Sharing or similar protocols) to avoid single points of failure. Whatever the method, your executor needs to know where to look and how to use what they find.
A Will or Trust That Names a Digitally Literate Executor or Trustee
The executor you name for your Texas estate has the legal authority to access your digital assets under Texas Estates Code § 2001.101. But legal authority is not the same as technical ability. If your executor has never interacted with a hardware wallet, does not understand how to verify a Bitcoin address before transferring funds, and is not comfortable with the security protocols involved in moving large amounts of cryptocurrency — the results can be costly. A single mistaken transfer to a wrong address is irreversible.
The solution is either to name an executor who has relevant technical fluency, or to authorize your executor to engage a crypto-custodian or professional service to assist with the technical aspects of the transfer. Your trust or will should give explicit authority for this delegation and should define the scope of that delegation.
A Pour-Over Will or Living Trust With Digital Asset Provisions
A revocable living trust offers significant advantages for crypto-holding families. Assets held in a properly funded trust avoid probate — meaning there is no public court process, no waiting for letters testamentary, and no timeline determined by the Collin County probate docket. The trustee can access and transfer the crypto assets immediately upon your incapacity or death, subject to the trust terms.
For self-custody crypto specifically, the trust should include a provision authorizing the trustee to take possession of hardware wallets, access seed phrases from designated storage locations, and engage technical service providers. Under Texas Estates Code § 2001.102, a trustee administering a trust that includes digital assets has the right to access those assets — the trust instrument formalizes and documents that authority.
A pour-over will is a companion document: if you hold any crypto outside the trust at the time of your death (because you bought it recently and hadn't yet transferred it in), the pour-over will directs that it flows into the trust rather than passing through intestacy or a separate probate proceeding.
Basis Tracking Documentation
For the step-up in basis to be fully claimed, the cost basis of each unit of cryptocurrency needs to be documented. Crypto tax software (Koinly, CoinLedger, TaxBit) can produce transaction histories that your heirs and their tax advisors will need to establish the original basis and confirm the step-up. If you have been trading crypto for years across multiple wallets and exchanges, this documentation can be complex. Starting the documentation while you are alive is substantially easier than reconstructing it from chain data after death.
Your estate plan should include instructions for where this documentation is stored and how to access the relevant accounts and export files.
The Frisco Tech Demographic: Why This Matters Here
Collin County has one of the highest concentrations of technology workers in Texas. The corridor from Plano through Frisco to McKinney and Allen is home to the headquarters or major campuses of dozens of technology companies — along with thousands of engineers, product managers, and executives who received crypto compensation or invested in digital assets during the bull markets of the past decade.
For many of these households, cryptocurrency has become the fastest-appreciating asset in the estate — worth more, in some cases, than the retirement accounts and real estate combined. Yet the estate planning infrastructure that surrounds traditional assets (beneficiary designations for retirement accounts, TOD registrations for brokerage accounts, homestead protections, and Lady Bird Deeds for Texas real estate) has no direct analog for cryptocurrency. The planning is non-standard, requires technical knowledge alongside legal and tax expertise, and is still relatively new enough that most general estate planning attorneys do not have depth in it.
WG Law attorney Carla Alston has practiced estate planning and tax law in Collin County for more than three decades. Her LL.M. in Taxation from NYU — held by fewer than a handful of estate planning attorneys in the DFW market — gives her a foundation in the federal tax treatment of digital assets that general estate planners typically lack. Her personal experience as the widow of a crypto holder gives her something no credential can: an understanding of what goes wrong when the plan does not account for the technical realities of cryptocurrency custody.
The team at WG Law handles crypto estate planning for families across McKinney, Frisco, Plano, Allen, Prosper, and the broader DFW metropolitan area, including clients with both exchange-held and self-custody assets. Learn more about our crypto and digital asset estate planning services, or read about how beneficiary designations interact with digital assets in Texas.
What Happened to Sarah
In the hypothetical that opened this piece, Sarah found the seed phrase in time. The estate attorney was able to document the wallet contents, value the assets as of Mark's date of death, and establish Sarah's stepped-up basis in the Bitcoin and Ethereum — approximately $65,000 and $3,200 per coin, respectively, at the time of valuation. Because Mark had bought most of his Bitcoin between 2018 and 2021, the accumulated gains were substantial. Sarah's step-up eliminated a significant capital gains liability that would have existed had Mark sold the assets before his death.
Sarah kept the estate planning practice. She came in about a month after the estate closed. Her own estate plan now includes a memorandum of digital assets in a fireproof safe, a revocable living trust with explicit trustee authority over digital assets, and annual basis tracking from a crypto tax software account her attorney has access to. She updates the memorandum every January. Her children — two teenagers in Frisco — know the safe exists and what it contains.
Mark's plan was in the false bottom of a drawer. Sarah's plan is something different: documented, accessible, and designed so that finding it doesn't depend on luck.
If you hold cryptocurrency in McKinney, Frisco, Plano, Allen, Prosper, or anywhere in the DFW area, the right time to build that plan is before someone is looking for a laminated card. Carla Alston and the estate planning team at WG Law handle crypto estate planning for North Texas families — with the tax LL.M. and the lived experience to do it right. Call 214-250-4407 or request a consultation to speak with our team.
This article is general information only and does not constitute legal advice. Cryptocurrency estate planning involves complex legal, technical, and tax considerations that vary by asset type, custody method, and family circumstances. The federal estate tax exclusion amounts referenced reflect 2025 law; consult a qualified tax and estate planning attorney for guidance specific to your situation.