Tokenization and real-world assets shaping digital legacies

How to Use Tokenization of Assets in Estate Planning: Protect Crypto & Tokenized Real Estate for Your Heirs in 2022

Tokenization of assets is moving from crypto circles into mainstream wealth planning, with the real‑world asset tokenization market reaching about $24 billion by mid‑2025 after roughly 380% growth in three years. As more of our net worth lives on chain, our estate plans, wills, and inheritance tools need to catch up so heirs are not locked out of tokenized holdings when it matters most.

Key Takeaways

What Is Tokenization of Assets and Why Does It Matter for Your Estate?

Tokenization of assets means taking something that has value in the real world, such as a property, a fund, or even a company share, and issuing a digital token that represents ownership or rights to that asset on a blockchain. In practice, these tokens can be traded, fractionally owned, and integrated into smart contracts much more flexibly than traditional paper or database records.

For estate planning, tokenization changes three things at once. First, it changes how we custody wealth, because tokens often sit in self‑custodied wallets. Second, it changes how we document that wealth, because the real proof of ownership is on chain, not in a file cabinet. Third, it changes how we transfer it, because smart contracts can automate inheritance conditions if they are set up correctly.

According to industry analysis, the base‑case tokenized asset market could reach about $2 trillion by 2030 with a bullish scenario near $4 trillion. Estate plans that ignore that shift will gradually ignore a growing share of family wealth. Our view is simple: you cannot have a modern estate plan in 2025 and beyond without explicit strategies for tokenized assets.

How Tokenization Changes Traditional Estate Planning Basics

Traditional estate planning assumes assets live in banks, brokerages, and registries that recognize court orders and executors. Tokenized assets break that assumption, because control often sits with whoever holds the private keys, not with a bank that can respond to a probate order. This is why we treat custody and access as central in tokenization discussions.

Research indicates that only a minority of crypto holders have any documented instructions for heirs, even as crypto and tokenized instruments creep into mainstream portfolios. Crypto is only one category here. We now see tokenized real estate, tokenized funds, and even tokenized money‑market assets that need to be mapped into wills, trusts, and digital vaults as clearly as bank accounts.

Experts recommend aligning your tokenization strategy with the same principles you already use for other assets. That means clear inventories, beneficiary designations, jurisdiction‑aware legal documents, and practical access instructions. We structure our guidance so families can extend what they already know about wills and trusts into this new on‑chain world.

Tokenized Real Estate and Fractional Ownership: What Heirs Need to Know

Tokenized real estate takes a property and divides it into digital tokens that represent shares of ownership or revenue rights. Fractional ownership then lets buyers hold, for example, 0.1 percent of a building as easily as buying a share of an ETF. For families, that means heirs can inherit small, flexible slices of a property rather than a single undivided house that must be sold.

According to Deloitte, tokenized real estate could reach $4 trillion by 2035, up from less than $0.3 trillion in 2024. That growth will not only come from new investors, it will come from existing property owners who convert their holdings into tokens for liquidity and succession planning. If your vacation home, rental unit, or commercial property becomes tokenized, your estate plan must treat those tokens as core assets, not side notes.

Fractional ownership also allows more precise, and sometimes fairer, inheritance splits. Instead of forcing a sale so three children can divide one house, the estate can allocate 33.3 percent of the property tokens to each beneficiary. Smart contracts can route rental income in the same proportions, which reduces disputes but requires careful documentation and education so heirs understand what they are receiving.

Documenting Tokenized Holdings in Wills and Trusts

In our work on digital wills, we see a recurring problem. People list “crypto” as a single line item, but they do not specify which wallets, chains, or tokenized assets they actually own. For heirs and executors, that lack of detail can be fatal, because without precise information they cannot locate or value the holdings.

The most effective approach involves treating tokenized assets as their own category in your estate documents. We suggest breaking them down by chain and platform, then listing token symbols, contract addresses, and approximate units. Digital will tools, which often cost between $0 and $299 online, can store these references securely while leaving private keys and sensitive access details in a separate, protected channel.

According to experts in estate law, including commentators in Harvard Business Review and McKinsey reports, clarity and redundancy are crucial. That means your executor should not rely on a single device or app to discover tokenized assets. Instead, your will, a secure digital vault, and possibly a trusted third‑party service should all reinforce the same inventory so nothing gets lost in the shuffle.

Custody Options for Tokenized Assets in an Inheritance Context

Custody is the technical heart of tokenization of assets in estate planning. If your heirs cannot control the token, every other legal document becomes theoretical. We see three broad categories of custody strategies: self‑custody, third‑party custodians, and hybrid models that mix elements of both with social recovery.

Self‑custody means you hold your own private keys in hardware wallets or other secure methods. Third‑party custodians, from exchanges to regulated trust companies, hold tokens on your behalf and can respond to court orders. Hybrid approaches might split keys among trusted parties or leverage smart contracts that hand over control on death, often with time‑locked or multi‑signature conditions.

According to industry analysis, tokenized funds AUM could exceed $600 billion by 2030, about 1 percent of global mutual fund and ETF assets under management. That suggests a future where many of your “fund investments” are tokenized by default, which will increase the importance of institutional‑grade custodians who can handle probate processes while still delivering the on‑chain efficiencies investors want.

Cross‑Border Families, Expats, and Tokenized Asset Inheritance

If you are an expat or have family in multiple countries, tokenization of assets introduces both simplifications and new complications. On one hand, a token on a public blockchain does not care where you live, and it can, in theory, move across borders 24/7. On the other hand, tax authorities and courts absolutely care where you live and where your heirs live, especially when high‑value tokenized real estate and funds are involved.

Our cross‑border analysis highlights that global expatriates now number in the tens of millions, with a meaningful share holding digital assets that are not fully captured in local probate rules. According to the World Economic Forum, there is about $255 trillion in marketable securities that could be used as collateral, but only $28.6 trillion are actively used. Tokenization could help unlock some of that value in cross‑border lending and inheritance, though tax regimes will move gradually.

We advise cross‑border families to be explicit about which legal system should govern their tokenized assets, and to align that choice with platform terms of service and custody agreements. That might mean keeping certain real‑estate tokens in a jurisdiction with clear digital asset inheritance statutes or using entities, such as companies or trusts, to bridge different legal systems.

AI Tools to Organize, Value, and Transfer Tokenized Assets

AI is quietly becoming the operating system for digital estate planning. In the context of tokenization of assets, AI agents can scan wallets, derive token lists, pull in live market data, and create an updated catalog of your holdings that flows directly into your estate plan. For busy investors, that automation is often the only realistic way to keep documentation current.

Our AI and digital legacy research shows rapid growth in AI‑enabled preservation and planning tools. According to Financial Times coverage, tokenised Treasury and money‑market assets rose about 80 percent year over year to roughly $7.4 billion in 2025, which expands the number of on‑chain positions AI needs to track. When you pair that with projected growth in tokenized real estate and funds, an AI‑assisted dashboard for your estate will soon feel as essential as online banking.

Looking ahead, we expect AI agents to not only inventory tokenized assets, but to guide executors step by step. That might mean preparing tax reports for each jurisdiction, flagging illiquid or complex positions, and simulating different options for selling, transferring, or holding tokens over the years after death. The goal is not to replace human judgment, but to give families a clear map of a landscape that changes daily.

Case Studies: When Tokenized Inheritance Goes Wrong (and Right)

In our crypto inheritance research, we see two repeating stories. In the first, a token‑heavy estate effectively vanishes, because no one left a map or keys. In the second, heirs receive clear inventories, access instructions, and even step‑by‑step checklists to claim and, if needed, liquidate tokenized assets. The difference is planning, not technology.

One common failure case involves self‑custodied wallets where the owner never shared any information with family. Even if the will mentions “tokenized investments,” executors cannot act without keys or recovery phrases. On the positive side, we have seen estates where tokenized real estate and crypto holdings were held through an entity, with that entity’s shares passed through a trust. That structure gave heirs control through standard legal channels while still benefiting from on‑chain efficiency.

According to experts we follow, including estate planners cited in 2024 and 2025 legal journals, the most resilient setups use multiple layers. They combine clear legal documents, practical instructions for devices and wallets, and sometimes time‑locked access so heirs do not gain full control prematurely. In the context of tokenization of assets, thinking in “layers” instead of single solutions is key to keeping both security and inheritance goals in balance.

Step‑by‑Step: How to Document, Custody, and Transfer Tokenized Assets

To make this practical, we use a simple eight‑step workflow that any family can adapt. It covers documentation, custody decisions, and transfer mechanics so that your tokenized holdings fit into a larger estate plan rather than sitting in isolation. We suggest reviewing this at least annually, or whenever your portfolio changes significantly.

1. Inventory your tokenized assets. List every wallet, chain, and platform, then record token types, units, and approximate values.
2. Decide on custody. Choose where you will self‑custody, where you will use third‑party custodians, and where a hybrid model makes sense.
3. Choose beneficiaries. For each tokenized asset, decide who should receive it and in what fraction, especially for fractional ownership structures.
4. Update your will or trust. Work with counsel to insert explicit language covering tokenized assets and digital access instructions.
5. Create an access plan. Store keys or recovery methods in a secure but retrievable way, such as a hardware wallet plus sealed instructions with your attorney.
6. Model tax impact. Use calculators or professional advice to estimate inheritance, estate, and capital‑gains taxes on tokenized holdings.
7. Test your plan. Run a dry‑run with a trusted person or advisor so you know your executor can follow the steps.
8. Review yearly. Tokens, platforms, and laws change quickly, so revisiting the plan is not optional.

According to research from Ripple and BCG, the tokenized asset market could reach $18.9 trillion by 2033 if adoption accelerates. That is not a niche side project for tech enthusiasts. It is the future operating layer for a large share of global assets, which is why we structure our guidance as a repeatable process rather than one‑off tips.

Building Estate Valuation Calculators That Include Tokenized Items

Valuing tokenized assets for estate purposes can be trickier than it looks. Prices can be volatile, liquidity can vary by platform, and in some cases, there is no reliable market data at all. To manage this, we suggest building or using calculators that treat tokenized items explicitly instead of lumping them under a generic “crypto” label.

A practical estate valuation calculator for tokenized holdings should do at least four things. It should pull live or recent price feeds for liquid tokens, apply conservative discounts for illiquid or thinly traded assets, capture the legal entity that actually owns each token, and record time‑stamped snapshots for audit and tax purposes. Where possible, we also advise including notes on cost basis so heirs can model potential capital gains.

Data from 2025 shows that tokenised Treasury and money‑market funds are already a multi‑billion‑dollar niche, and tokenized funds more broadly are expected to reach hundreds of billions. If your estate calculator does not understand these instruments today, it should at least be built so you can plug them in tomorrow without rebuilding everything. We prioritize simple, exportable formats and clear labeling over complex, one‑off valuations that no one can reproduce later.

Roadmap: Implementing Tokenized Asset Planning Over the Next 12 Months

We encourage families and advisors to treat tokenization of assets as a staged project, not an overnight overhaul. A 12‑month roadmap keeps things manageable while still moving your estate plan into line with how your wealth actually works. Below is a straightforward timeline you can adapt.

By pacing the work this way, you avoid the two biggest risks we see: paralysis from complexity and rushed, one‑off fixes that are never updated. According to our analysis of estate planning trends, consistent small steps beat rare, heroic efforts when it comes to capturing fast‑moving asset classes like tokenized real estate and funds.

FAQ: Tokenization of Assets in Estate Planning

We hear many of the same questions when families start integrating tokenization into their estate plans. Here are clear, conversational answers you can use as a starting point with your own advisors and relatives.

How do I explain tokenized assets to my executor without confusing them?

Use plain language first, then add specifics. For example, say “I own digital tokens that represent property and investments, held in these accounts and wallets,” then list each one. Provide a short glossary in your estate binder so your executor does not get lost in technical terms.

Can I just leave my hardware wallet in a safe and call it a day?

We do not recommend that. A hardware wallet without clear instructions, PINs, or recovery paths is effectively a black box. If something goes wrong with the device or your executor does not understand how it works, your tokenized assets may still be unreachable.

Do tokenized real estate and fractional ownership change estate taxes?

The asset type does not exempt you from existing tax rules. Tokenized real estate is usually taxed similarly to traditional real estate, and fractional ownership is generally treated like owning a proportionate share. What changes is how you track, value, and document those positions, which needs more precision.

Is a digital will enough to cover my tokenized assets?

A digital will is a strong starting point, especially when it captures the full inventory of your tokenized holdings. However, complex estates or cross‑border situations often need additional structures, such as trusts or corporate entities, to handle tax, governance, and control issues.

What happens to my tokenized assets if laws change after I die?

Your estate will be administered under the laws in effect when it is settled, so some details may shift. The best protection is to work with advisors who monitor changes in digital asset regulations and to use flexible structures that can adapt, such as trusts with broad administrative powers.

Conclusion

Tokenization of assets is no longer theoretical. From tokenized real estate and fractional ownership to tokenized funds and money‑market positions, more of your balance sheet will live on chain year after year. Our role is to help you treat those assets with the same seriousness as any bank account or property title in your estate plan.

By inventorying tokenized holdings, choosing thoughtful custody arrangements, documenting everything in digital‑ready wills and trusts, and building estate calculators that actually understand tokens, you give your heirs both clarity and control. If you start now, follow a simple 12‑month roadmap, and review yearly, you can keep your estate plan aligned with a world where trillions in value move as tokens, not paper.