If you’re building long-term wealth through crypto or other high-growth assets, estate planning mistakes can erase what you’ve built without you ever realizing it happened. The IRS taxes wealth as it moves across generations, and a basic will that works fine for a house and a savings account can be financial malpractice for a portfolio meant to last decades.
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Why a basic will isn’t enough
A simple will directs where your assets go when you die. It does nothing to manage what happens when those assets pass again, from your children to your grandchildren. Every transfer across a generation is a potential taxable event, and if your plan only accounts for the first handoff, you’re leaving the second and third handoffs to chance.
The generation-skipping transfer tax
The generation-skipping transfer tax exists specifically to catch wealth that jumps a generation, for example when a grandparent leaves assets directly to a grandchild instead of passing through the parent first. It’s a separate tax on top of estate and gift tax, and it’s steep. Structuring a plan without accounting for it is one of the most common and most expensive mistakes people make.
The mistakes that trigger a 40 percent hit
Three patterns show up again and again in accounts that end up paying the top rate: failing to use available exemptions before they’re needed, structuring trusts in a way that inadvertently triggers generation-skipping treatment, and simply not updating a plan as asset values grow. Digital assets make this worse because their value can shift dramatically in a short window, which means a plan that was fine two years ago can be badly out of date today.
None of this requires giving up control of your assets or locking yourself into something irreversible. It requires working with someone who understands both the tax code and how digital assets actually move, and reviewing the plan on a schedule instead of once and forgetting about it. The families who keep wealth intact across generations aren’t the ones who got lucky. They’re the ones who planned for the tax consequences of every transfer, not just the first one.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
Part of our guide: Crypto Taxes.
