Asset Protection

Protecting cryptocurrency from creditors and loss.

Crypto poses a double protection problem, it’s a target for creditors like any valuable asset, and uniquely vulnerable to theft or permanent loss if keys are mishandled.

By Tresp, Day & Associates · June 11, 2021

The short version Protecting cryptocurrency means addressing two risks. For creditor protection, hold crypto through the same structures that protect other wealth, asset protection trusts and entities, so it’s beyond a future creditor’s reach. For security, manage private keys carefully (cold storage, backups, and a secure succession plan) so the assets can’t be stolen or lost. Both matter; neither alone is enough.

As cryptocurrency becomes a larger share of people’s wealth, protecting it has moved from an afterthought to a priority. Unlike a bank account, crypto is both a creditor target and a security challenge, and a complete plan addresses both.

Creditor protection

Held in your own name, crypto is as exposed to a judgment as cash. Titling it into a properly structured irrevocable asset protection trust, or an entity owned by one, places it beyond a future creditor’s easy reach, just like other valuable assets. As always, this protection has to be established before a claim arises.

Security and access

Crypto’s unique risk is that whoever controls the private keys controls the coins. Protecting against theft means secure key management, cold (offline) storage, careful backups, and strong operational security. Protecting against loss means a succession plan so a trusted fiduciary can access the assets if something happens to you, without exposing the keys in the meantime.

Bring it into the plan

The two goals can be in tension, accessibility versus security, which is why crypto deserves deliberate planning rather than improvisation. Tresp, Day & Associates helps clients protect digital assets within their broader protection and estate plans.

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Since 1992, Tresp, Day & Associates has structured asset protection for families and businesses nationwide. Request a consultation or call (858) 755-6672.

Common questions

Frequently asked

Can I hold cryptocurrency in an asset protection trust?

Yes. Cryptocurrency can be titled into a properly structured irrevocable asset protection trust, or an entity owned by one, which places it beyond a future creditor's easy reach, just like other valuable assets. This must be set up before any claim arises, and it should be paired with secure key management to protect against theft or loss of access.

This article is general information, not legal or tax advice, and does not create an attorney-client relationship?

This article is general information, not legal or tax advice, and does not create an attorney-client relationship. Every situation is different and the law changes; consult a qualified attorney about your circumstances.

This website is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Every situation is different; please consult a qualified attorney about your specific circumstances.

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