Bespoke at STEP New York

Bitcoin does not fit neatly into traditional asset categories.

It functions as a bearer asset, similar in concept to cash or gold, but with two important differences. It exists only in digital form, and ownership is determined entirely by control of private keys.

For planning purposes, this means title, possession, and control collapse into a single issue. If the keys are controlled, the asset is controlled. If they are not, the asset is effectively gone.

The central issue is access across time.

If a client becomes incapacitated or dies, and no one can access the private keys, the asset will not transfer. There is no institutional backstop, no court-ordered recovery, and no administrative workaround.

This makes access planning more critical than tax planning in many cases.

Yes, but only if the structure reflects how the asset actually functions.

A trust can own Bitcoin, but the trust instrument alone does not control the asset. Control depends on who holds or can reconstruct the private keys.

The legal structure and the technical control must align. If they do not, the trust may exist on paper while the asset remains practically inaccessible.

Bitcoin introduces a higher standard of care around custody and administration.

A fiduciary who cannot access the asset cannot administer it. A fiduciary who improperly secures access may expose the asset to loss or theft.

This creates a new category of risk where:

• Control can be unintentionally lost
• Security failures are irreversible
• Administrative authority may not translate into practical control

Fiduciaries must understand enough about custody to fulfill their duties in practice, not just in form.

Custody is the core design question.

The options generally fall along a spectrum from individual control to shared or institutional control. Each choice involves tradeoffs between autonomy, security, and continuity.

What matters most is not which model is used, but whether the model:

• Survives incapacity
• Survives death
• Can be executed by the intended fiduciaries

A structure that cannot function under real-world conditions is not a valid plan.

Many Bitcoin holders prioritize direct control of their assets. This is often expressed as a principle that control should never be delegated.

That approach can work during life. It often fails at death.

The paradox is that maximizing individual control can reduce the probability of successful transfer. Estate planning requires introducing structure, even when that means accepting some loss of unilateral control.

Most failures are not legal. They are operational.

Common breakdowns include:

• Keys that are lost or never properly shared
• Heirs who lack the technical ability to access or manage the asset
• Overly simplistic custody arrangements that fail under stress
• Plans that rely on a single point of failure

Bitcoin exposes these weaknesses because there is no system to compensate for them.

Bitcoin operates on a transparent ledger. Transactions are visible, even if identities are not immediately attached.

For clients with meaningful holdings, privacy becomes a security issue. Public exposure can increase the risk of targeted attacks or coercion.

Planning should address not only legal ownership, but also how visible and identifiable the client is in relation to the asset.

Bitcoin does not produce income by default.

Generating yield requires introducing intermediaries and taking on additional risk. Recent failures in lending platforms have shown how quickly those risks can materialize.

From a fiduciary perspective, this raises questions about prudence, risk tolerance, and duty of care. In many cases, preservation and control are more aligned with fiduciary obligations than yield generation.

It increases the importance of execution.

The legal tools are familiar. Trusts, entities, and fiduciary frameworks all still apply. What changes is that the plan must work in practice, not just on paper.

Attorneys must ensure that legal intent and technical reality are aligned. That is where most failures occur.