Petri Lourens, Fiduciary Specialist at Private Clients by Old Mutual Wealth 
As crypto assets continue to gain traction among ultra-high-net-worth (UHNW) investors, they are quietly becoming one of the most complex and misunderstood asset classes in modern estate planning. The very features that make crypto attractive, i.e. decentralisation, privacy and portability, also make it uniquely vulnerable when the owner passes away.
Unlike traditional investments held by banks or custodians, crypto assets are controlled through private keys and digital wallets. If these access credentials are lost or undisclosed, the wealth is gone forever. For UHNW individuals, whose crypto portfolios may be substantial, proper fiduciary planning is not optional, it is essential.
Legal recognition under SA law
Under South African law, crypto assets are defined in the Income Tax Act as digital representations of value that are capable of being traded or stored electronically but are not issued by a central bank. They are treated as intangible movable property for estate duty purposes and must be disclosed in the Liquidation and Distribution account in terms of the Administration of Estates Act 66 of 1965.
The Wills Act applies to any testamentary disposition involving crypto, meaning these holdings can validly form part of an estate if correctly referenced and administered. However, while crypto is legally recognised as property, its decentralised nature renders the executor’s legal authority to administer the asset practically ineffectual in the absence of the necessary technical expertise and access credentials.
The critical challenge
Access remains the greatest practical hurdle. Crypto may be stored on exchanges such as Luno or Binance, on hardware wallets like Ledger or Trezor, or through institutional custodians. Without the private key or seed phrase, however, executors cannot retrieve the asset.
The challenge lies in preserving this information securely while making it accessible. Including private keys directly in a will is ill-advised, as the document becomes public upon death. Instead, we recommend a sealed digital asset memorandum or letter of instruction stored securely and referenced in the will.
When planning fails and when it works
The consequences of inadequate planning for crypto assets can be severe. In a recent estate, a deceased investor’s Bitcoin wallet, valued at R2 million, was rendered permanently inaccessible due to the absence of documented access credentials. Although estate duty was levied on the declared value, the heirs received no benefit. This case highlights a crucial truth in the realm of crypto assets: in the cryptocurrency world, access, not legal ownership, ultimately determines value.
By contrast, another UHNW client demonstrated the impact of proactive planning. Through the creation of a comprehensive digital asset memorandum and the appointment of a crypto-literate executor, the estate achieved a seamless transfer of R10 million in crypto holdings. The result was accurate tax reporting, full preservation of value, and no administrative complications. The distinction between these two outcomes lies not in the nature of the assets but in the foresight, structure, and discipline of the estate planning process.
Trusts, fiduciary duties and compliance
Inter vivos trusts (also known as a discretionary family trust) allow UHNW clients to preserve wealth, manage succession, and optimise tax outcomes across generations. However, these structures introduce additional fiduciary responsibilities.
Under the Trust Property Control Act, trustees carry personal liability for the prudent management of all assets, including digital assets. Trust deeds should therefore explicitly authorise the holding, investment, and transfer of crypto assets, and provide trustees with the authority to engage with qualified service providers.
Compliance obligations also extend to anti-money laundering and financial advice regulations. Trustees and fiduciary professionals must ensure adherence to the Financial Intelligence Centre Act (FICA) and the Financial Advisory and Intermediary Services Act (FAIS). Trustees bear critical fiduciary responsibilities under the Trust Property Control Act when managing crypto investments. These inherently high-risk assets require enhanced due diligence and specific trustee powers.
The trust deed must explicitly authorise trustees to:
- Invest in crypto assets and digital assets
- Engage with crypto service providers and exchanges
- Hold assets in digital wallets or custody solutions
- Execute transactions across multiple blockchain networks
- Engage professional crypto asset managers.
Tax and regulatory evolution
Tax considerations also require specialist attention. Crypto assets attract capital gains tax on deemed disposal at death and estate duty at 20%, rising to 25% for estates exceeding R30 million. Executor fees of 3.5% of the net estate value further underscore the need for effective structuring to manage liquidity and tax exposure.
Incorporating crypto assets into broader fiduciary structures - whether through trusts, companies or offshore vehicles - allows for more effective liquidity management and continuity planning.
South Africa is also moving swiftly to align with global standards on crypto regulation and transparency. FSCA licensing for service providers is underway, SARS continues to refine its guidance on taxation, and the OECD’s Crypto-Asset Reporting Framework will come into effect in 2026. The Financial Action Task Force’s Travel Rule will also apply locally from 2025, shaping how cross-border crypto transactions are reported.
Bringing crypto into the fiduciary fold
For UHNW clients, these developments make it more important than ever to integrate crypto assets into a formal estate and fiduciary plan. A well-drafted will or trust deed should provide explicit powers for executors or trustees to manage digital assets, establish secure and compliant access procedures, and ensure tax efficiency.
Digital wealth deserves the same rigour as traditional investments. Without clear instructions, access protocols and fiduciary powers, crypto assets risk becoming invisible wealth.
The preservation of digital assets, particularly in the context of UHNW estates, depends not solely on technological safeguards but on deliberate, forward-thinking estate planning. Engaging experienced fiduciary specialists who understand both the legal and technical dimensions of digital wealth is essential. Their expertise ensures that access protocols, succession strategies, and compliance considerations are properly addressed, transforming potential risk into enduring value. DM
Author: Petri Lourens, Fiduciary Specialist at Private Clients by Old Mutual Wealth