A digital asset letter of instruction tells whoever administers your estate what digital assets exist and where to look for them. It is private, it carries no legal authority, and it disposes of nothing. Its whole job is to be found and understood by a stranger working under time pressure, which makes it the one document in the plan written for a reader rather than for a court.
Part of our guide: Family Office.
The short version
- A digital asset letter of instruction is a map, not a key. It says what exists and where. It never contains the secrets themselves.
- Design constraint: useful enough to work if the right person finds it, harmless if the wrong one does.
- It is not legally binding and does not grant access. Authority comes from the will, trust, or power of attorney.
- The custodian’s own online setting can outrank your will under state law, so the letter has to reconcile with those settings.
- It goes stale faster than any other part of the plan. Undated and unrevised, it can do damage.
What it is and what it is not
Your will and trust are dispositive documents: they say who gets what. Your power of attorney is an authorizing document: it says who may act. The letter of instruction is neither. It is operational. It answers the question a fiduciary asks first and no legal document answers: what is there, and where do I start?
Nothing in it is enforceable. If it contradicts the will, the will governs. That limitation is also its advantage, because it can be rewritten on a Sunday afternoon without a lawyer, and it should be.
It is also private. A will admitted to probate can become a public record. The letter never enters that process, which is precisely why the operational detail belongs here.
The design constraint that shapes everything
A digital asset letter of instruction has to be specific enough that someone unfamiliar with your holdings can act on it, and worthless enough that a thief who finds it gains nothing.
That balance is achievable because locations and secrets are separable. Naming a hardware wallet manufacturer, saying that a recovery sheet exists, and identifying which institution holds the safe deposit box gives a fiduciary everything they need to begin. It gives an intruder a list of things they still cannot open.
Once seed words appear in the document, the balance collapses. The letter becomes the asset. Anyone who reads it owns everything it describes, and now it needs the security of the assets themselves rather than the accessibility a working document requires.
So the rule is simple and worth holding to: the letter points at the secrets, and something else holds them.
What belongs in it
Custodial accounts. Institution, the identity the account is held under, and who to contact. No passwords.
Self-custodied wallets. Device type, approximate holdings, the wallet software, and where the device lives. No seed words, no passphrase.
Where the recovery material is stored, described by location and access procedure rather than reproduced.
Entities and trusts that own any of it, with the governing document’s location.
People: the attorney, the CPA, and anyone else who knows part of the picture, with contact details.
Tax records, since the estate will need basis history and it is usually the hardest thing to reconstruct.
A dated instruction on what to do first, including who to call before touching anything. This matters more than it sounds. Heirs who improvise with a hardware wallet can destroy access permanently in an afternoon.
The setting that outranks your will
An online-tool direction is the provision most people have never heard of, and it changes how the letter of instruction should be written.
Under the Revised Uniform Fiduciary Access to Digital Assets Act, adopted in most states, a user’s direction given through a provider’s own online tool takes priority over the estate documents. The enacted language is direct:
“a direction regarding disclosure using an online tool overrides a contrary direction by the user in a will, trust, power of attorney, or other record”
(Michigan Fiduciary Access to Digital Assets Act, Act 59 of 2016, enacting the uniform provision; see also NRS Chapter 722).
Practically: a legacy contact, beneficiary designation, or recovery setting configured years ago inside an exchange or email account can control, and a carefully drafted will can lose to it. The act then falls back to the will, trust, or power of attorney where no online tool was used, and to the provider’s terms of service where neither applies.
The letter is the natural place to record which online tools you have configured and what they say, so the fiduciary can find the conflict before a custodian does.
What I actually see
A letter of instruction commonly exists and nobody can find it. Written once, saved somewhere sensible to the author, and never mentioned to the person who would need it. A document nobody knows about performs identically to a document that was never written.
The second pattern is the letter that gradually became the vault. It started as a map, then a seed phrase got added “temporarily” during a device migration, and now the family’s entire position sits in a text file with a helpful title. I have seen this more than once and it is always well intentioned.
The third is decay. Undated, three years old, listing two exchanges that no longer exist and missing the wallet holding most of the value. A stale letter is worse than none, because a fiduciary who works through it and finds nothing concludes the search is finished.
The habit worth building: revise it on a fixed date every year, date the revision, and destroy the prior copy. Fifteen minutes annually is the entire discipline.
Where this goes wrong
The document is treated as legal work when it is operational work, so it gets drafted once and filed.
The specific failures: seed words written into the letter. Stored in a location only the author could reach, such as an encrypted drive with no shared password. Never dated, so nobody knows which version is current. Contradicting the will on who receives something, which creates a dispute rather than resolving one. Silent on the online tool settings that override everything else. And listing accounts without listing the tax records, leaving the estate to reconstruct basis from scratch.
The decision rule
- Write the inventory first, covering every wallet, account, device, and entity.
- Separate locations from secrets and put only locations in the letter.
- Record the online tool settings at each custodian, since they can outrank the estate documents.
- Name the first call, so heirs do not improvise with hardware they do not understand.
- Store it where the fiduciary can reach it and tell that person it exists.
- Date every revision and destroy superseded copies.
- Check it against the will and trust so it never contradicts them.
- Revise annually and after any change of device, custodian, or entity.
Where this sits
The letter is the operational companion to the legal documents. Estate planning covers the documents themselves. Private key succession planning covers the half the letter deliberately leaves out. Custody covers the arrangements it describes.
Most families write this alone, and it is the one part of the plan where a second reader is worth a great deal. The useful test is to hand it to someone who knows nothing about your holdings and ask them to explain what they would do first. Whatever they cannot answer is what the letter is missing, and that gap tends to sit exactly where the estate attorney, the CPA, and the custody arrangement were never in the same conversation.
Sources
- Michigan Fiduciary Access to Digital Assets Act, Act 59 of 2016 (Michigan Legislature)
- Nevada Revised Statutes Chapter 722, Fiduciary Access to Digital Assets (Nevada Legislature)
- Revised Uniform Fiduciary Access to Digital Assets Act (Uniform Law Commission)
- Wyoming digital asset statutes, Wyo. Stat. Ann. §§ 34-29-101 to 34-29-102
- IRS, Digital assets
Related
- Private key succession planning
- Crypto estate planning for high-net-worth families
- Seed phrase storage for estate planning
- Common crypto estate planning mistakes
- Crypto will vs crypto trust
Last updated: 3 August 2026.
This article is general education, not legal, tax, or investment advice. Digital asset access law varies by state. Talk to a qualified estate attorney about your own situation.
