Future Returns: Protecting And Managing Digital Assets
How to keep your crypto and NFTs safe.
How to keep your crypto and NFTs safe.
For investors in digital assets like cryptocurrencies and non-fungible tokens (NFTs), it’s necessary to take special estate planning considerations into account. But a recent study conducted by the Northern Trust Institute suggests some investors are slow to adopt these measures, potentially putting their investments at risk after they die.
The Chicago-based wealth manager firm surveyed nearly 250 high-net-worth investors, uncovering critical estate planning gaps for digital assets, despite more than half of those surveyed owning crypto and NFTs. Only 42% of those surveyed said all their digital accounts and online management tools were incorporated into their estate plan. For 20%, none have been incorporated.
This survey, conducted last year for Northern Trust’s 2022 Wealth Planning Outlook suggests there are demographic differences among investors based on generation and estate size. When asked if their plan has a full accounting of traditional and digital wealth accounts, 78% of millennials said their plan did, compared to 59% of investors born before 1945. While 75% of those with estates of US$5-to-US$10 million have made this full accounting, the rate declines to 55% for those with US$50-million plus. Respondents with higher asset levels were also more likely to own investments in digital assets.
Without access to critical information or the assets themselves, heirs are left with the added burden of incomplete transparency—a particular challenge when settling complex estates.
One reason it’s critical to pay special attention to these assets is that the category continues to evolve. “The tax implications of digital assets like crypto and NFTs are also currently under debate and continued regulation is likely,” Northern Trust said in its report.
Jon Jackson, central region practice leader for estate settlement services at Northern Trust Wealth Management says it’s necessary to be proactive. “Especially for a rapidly evolving asset class such as digital assets, review your plan frequently to take advantage of the legislative and technical changes that are likely to occur with such assets.”
In a recent interview, Jackson shared with Penta how individuals and families can ensure peace of mind with their digital estates.
Create an Inventory and Paper Trail
“The first step is to start with an inventory,” Jackson says. This includes detailed records of assets, the digital wallets in which they’re stored, and any crypto keys. Private keys, the passwords used to manage and access cryptocurrencies, may be informally written down or memorized, which can cause access issues after an investor dies if not safely stored.
The survey suggests 59% of respondents have included only some of their digital accounts or none at all into their estate plan. Estate planners and fiduciaries can’t evaluate digital assets without necessary guidance to access them, which makes sharing this information critical.
“In the best case scenario, (not leaving information) could lead to extra time and expense to track down the information, and possibly even litigation to access the accounts,” Jackson says. In the worst, most extreme cases, he adds that “not having the right password could lead to losing the entire asset.”
Horror stories about lost crypto keys have made global headlines. New York blockchain data firm Chainalysis suggests that about one in five of existing Bitcoin—a figure they once valued at US$140 billion, but is likely less because of the currency’s falling value—are in lost or inaccessible wallets.
Lock in a Digital Fiduciary
Whenever a client enters a new asset class, Jackson says it’s necessary to consult with an attorney and estate-planning advisors. This ensures estate plans cover the assets and allow fiduciaries to properly control them and pass them to future beneficiaries, whether through probate, or where possible, using beneficiary designations or revocable trusts.
“Consider specific language for handling digital assets in your estate, including a digital fiduciary, rather than relying on more general provisions of estate assets,” he says. (It’s also important to check on the requirements for a digital assets fiduciary which can vary between jurisdictions.)
Northern Trust’s survey suggests the people set up to use online management tools post-death are spouses, children, or parents. The intended fiduciary needs to be “not only willing to take on the responsibilities of setting your estate, but also the responsibility of managing these types of complicated assets,” Jackson says. About 90% of fiduciaries have been informed, according to survey responses, yet of those informed only 89% have stated they are willing to act on the investor’s behalf in this critical role.
Prepare for Volatility and Tax Implications
Digital asset investors aren’t strangers to volatility, but this can create unique impacts on estates. “The volatility of the asset class, and the time it may take to access the asset, makes them riskier for administration purposes, more so than valuation issues,” says Jackson.
Due to constant price fluctuations, these assets can pose challenges to value for estate and gift tax purposes. If an investor’s net worth is above or near the federal estate tax exemption (US$12.06 million as of 2022), cryptocurrency investments must be closely monitored. Because the IRS treats crypto as property for tax purposes, there’s also the issue of assessing capital gains and losses.
“Because many cryptocurrencies are held and traded on exchanges, those types of digital assets aren’t necessarily hard to value for estate and gift purposes,” Jackson says.
Other types, such as NFTs for digital artwork, sports collectiles or digital real estate, require hiring a qualified appraiser. Given “the unique nature of the asset and limited market data,” digital assets like those are more complicated to value. Jackson likens them to rare paintings, in that both are subject to the professional opinions of appraisers and the IRS to determine value.
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Knight Frank’s latest Horizon 2025 update signals renewed confidence in Australian commercial real estate, with signs of recovery accelerating across cities and sectors.
As Australia’s family offices expand their presence in private credit, a growing number of commercial real estate debt (CRED) managers are turning to them as flexible, strategic funding partners.
Family offices are increasingly asserting their dominance in Australia’s private credit markets, particularly in the commercial real estate debt (CRED) segment.
With more than 2,000 family offices now operating nationally—an increase of over 150% in the past decade, according to KPMG—their influence is not only growing in scale, but also in strategic sophistication.
Traditionally focused on preserving intergenerational wealth, COI Capital has found that family offices have broadened their mandates to include more active and yield-driven deployment of capital, particularly through private credit vehicles.
This shift is underpinned by a defensive allocation rationale: enhanced risk-adjusted returns, predictable income, and collateral-backed structures offer an attractive alternative to the volatility of public markets.
As family offices increase their exposure to private credit, the dynamic between managers and capital providers is evolving. Family offices are highly discerning capital allocators.
They expect enhanced reporting, real-time visibility into asset performance, and access to decision-makers are key differentiators for successful managers. Co-investment rights, performance-based fees, and downside protection mechanisms are increasingly standard features.
While typically fee-sensitive, many family offices are willing to accept standard management and performance fee structures when allocating $5M+ tickets, recognising the sourcing advantage and risk oversight provided by experienced managers. This has created a tiered market where only managers with demonstrated execution capability, origination networks, and robust governance frameworks are considered suitable partners.
Notably, many are competing by offering differentiated access models, such as segregated mandates, debt tranches, or tailored securitisation vehicles.
There are important distinctions between onshore and offshore family offices in the context of CRED participation:
Onshore Family Offices: Typically have deep relationships with local stakeholders (brokers, valuers, developers) and a more intuitive understanding of planning, legal, and enforcement frameworks in Australian real estate markets. They are more likely to engage directly or via specialised mandates with domestic managers.
Offshore Family Offices: While often attracted to the yield premium and legal protections offered in Australia, they face structural barriers in accessing deal flow. Currency risk, tax treatment, and regulatory unfamiliarity are key concerns. However, they bring diversification and scale, often via feeder vehicles, special-purpose structures, or syndicated participation with Tier 1 managers.
COI Capital Management has both an offshore and onshore strategy to assist and suit both distinct Family Office needs.
The influx of family office capital into private credit markets has several systemic implications:
Family offices, deploying capital in significant tranches, have enhanced liquidity across the mid-market CRE sector.
Their ability to move quickly with minimal conditionality has contributed to yield compression, particularly on low-LVR, income-producing assets.
As a few family offices dominate large allocations, concerns emerge around pricing power, governance, and systemic concentration risk.
Unlike ADIs or superannuation funds, family offices operate outside the core prudential framework, raising transparency and risk management questions, particularly in a stress scenario.
Yes—family offices are arguably among the most attractive funding partners for CRED managers today. Their capital is not only flexible and long-term focused, but also often deployed with a strategic mindset.
Many family offices now have a deep understanding of the risk-return profile of CRE debt, making them highly engaged and informed investors.
They’re typically open to co-investment, bespoke structuring, and are less bogged down by institutional red tape, allowing them to move quickly and decisively when the right opportunity presents itself. For managers, this combination of agility, scale, and sophistication makes them a valuable and increasingly sought-after partner in the private credit space.
For high-performing CRED managers with demonstrable origination, governance, and reporting frameworks, family offices offer not only a reliable source of capital but also a collaborative partnership model capable of supporting large-scale deployments across market cycles.
Faris Dedic is the Founder and Managing Director of DIG Capital Advisory and COI Capital Management
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