Legal Structures for Multigenerational Bitcoin Wealth

By: Moish E. Peltz, Esq. and Kyle M. Lawrence, Esq.

In a recent episode of Block & Order, wealth strategist Matt McClintock of Bespoke Group shared his approach to safeguarding bitcoin holdings for the long term. Drawing on decades of estate planning experience and a deep understanding of crypto, McClintock outlined tools and structures designed to preserve generational wealth, manage tax exposure, and reduce risks unique to digital assets.

Rethinking Bitcoin Custody: The “Friction” Framework

McClintock began the episode by proposing a philosophical shift: bitcoin owners must “grow up” and treat their holdings like any other significant asset. Early adopters may have started with a self-custody, “not your keys, not your coins” ethos, but for high-value holdings—especially those representing a large percentage of total wealth—a layered custody strategy is essential.

He describes three “friction” levels. The high-friction category involves placing assets in qualified custody, owned through a limited liability company held by an offshore trust. This structure removes the bitcoin from the taxable estate, places it beyond the reach of creditors, and is designed for multi-generational protection. The moderate-friction level involves keeping bitcoin in a revocable trust with a qualified custodian, making it easier to access but still integrated into an estate plan. Finally, the low- or no-friction level consists of smaller “spending” amounts of bitcoin kept for everyday use or gifting, sized so that their loss would not harm the overall estate. By adopting this layered approach, owners ensure that if an attack, accident, or sudden incapacity occurs, most of their wealth remains secure.

Dynasty Trusts: Multi-Generational Protection

A dynasty trust can hold bitcoin and other assets for multiple generations without being subject to estate taxes at each transfer. By placing bitcoin in such a trust, owners remove it from their taxable estate, shield it from creditors or divorcing spouses, and establish governance rules for how and when heirs can access or use the asset. 

For bitcoin, this includes embedding custody instructions, multi-signature arrangements, and key-management protocols into the trust terms. McClintock emphasized that the key is multi-generational architecture, where trust documents anticipate changes in law, technology, and family circumstances over decades.

SLATs: Spousal Lifetime Access Trusts

The Spousal Lifetime Access Trust, or SLAT, offers bitcoin holders the ability to remove assets from their estate while still maintaining indirect access. In a SLAT, one spouse makes an irrevocable gift into a trust for the benefit of the other spouse, and possibly descendants. The receiving spouse can request distributions, providing liquidity without bringing the assets back into the grantor’s estate.

For bitcoin owners, a SLAT can freeze the asset’s current value for estate tax purposes, provide flexibility if the couple needs funds in the future, and maintain control over custody and distribution rules tailored for crypto.

GRATs: Grantor Retained Annuity Trusts

The Grantor Retained Annuity Trust, or GRAT, is another tool McClintock recommends for transferring appreciating assets like bitcoin. A GRAT allows the owner to place bitcoin into a trust for a fixed term while retaining the right to an annuity stream. At the end of the term, any appreciation above a modest IRS hurdle rate passes to heirs tax-free. 

Because bitcoin is volatile, a well-timed GRAT can capture significant upside for beneficiaries while using little or no estate and gift tax exemption. If the asset declines during the GRAT term, the owner simply gets the bitcoin back with minimal downside cost.

Charitable Remainder Trusts: Tax-Efficient Philanthropy

For charitably inclined bitcoiners with low-basis holdings, McClintock said he often turns to charitable remainder trusts, or CRTs. He describes one case in which East Coast clients had most of their wealth in zero-basis bitcoin and had been donating directly to a donor-advised fund, which limited deductions to 30 percent of adjusted gross income. 

By contributing bitcoin to a CRT instead, they could take an immediate charitable deduction when funding the trust, sell the bitcoin inside the CRT without triggering immediate capital gains tax, and receive an income stream from the CRT—taxable only as distributions are made. They could also use the cash flow from the CRT to make further charitable gifts eligible for a 60 percent AGI deduction. McClintock called CRTs “high-friction strategies” because they involve more setup and compliance, but notes that the tax mitigation, asset protection, and family governance benefits are substantial.

Foreign Non-Reporting Companies: Privacy and CTA Workarounds

In discussing the Corporate Transparency Act, McClintock identified a current legal “wrinkle” that allows for the creation of a foreign non-reporting company. If structured correctly, such an entity may be exempt from CTA reporting requirements, preserving privacy while holding bitcoin. The structure typically involves forming a company outside the United States in a jurisdiction that does not require filing with the U.S. Secretary of State, and separating investment management from general management roles. McClintock stresses that this is lawful under current regulations but may change if Congress amends the statute.

Beyond Structures: Philosophy and Security

All of these strategies fit within McClintock’s broader philosophy of sovereignty and risk management. Security means avoiding public disclosure of bitcoin ownership and limiting the size of self-custody holdings so that if they are lost in a wrench attack, the financial damage is contained. 

Sovereignty, in his view, is not just about holding your own keys—it’s about structuring wealth to be private, tax-efficient, creditor-protected, and transferable on your own terms. And maturity means recognizing that unless you are “Peter Pan or Deadpool,” you must plan for death, incapacity, and the needs of future generations.

Building a Future on Your Terms

McClintock’s advice makes clear that bitcoin wealth planning is no longer a niche exercise. It is now mainstream estate and asset protection work, with specialized considerations for the unique characteristics of digital assets. Structures like dynasty trusts, SLATs, GRATs, CRTs, and foreign non-reporting companies can transform volatile holdings into enduring family legacies. 

If you hold significant bitcoin or other digital assets, now is the time to assess your custody, tax, and transfer strategies. Falcon Rappaport & Berkman’s Moish Peltz and Kyle Lawrence can guide you through the legal and practical steps to protect your wealth for generations to come. Book a consultation today to start building your bitcoin legacy—before the opportunity to do it on your own terms disappears.

DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.