diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 7abd17d31e9..09eda0c28e4 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -1548,8 +1548,11 @@ void CWallet::blockDisconnected(const interfaces::BlockInfo& block)
 
     int disconnect_height = block.height;
 
-    for (const CTransactionRef& ptx : Assert(block.data)->vtx) {
-        SyncTransaction(ptx, TxStateInactive{});
+    for (size_t index = 0; index < block.data->vtx.size(); index++) {
+        const CTransactionRef& ptx = Assert(block.data)->vtx[index];
+        // Coinbase transactions are not only inactive but also abandoned,
+        // meaning they should never be relayed standalone via the p2p protocol.
+        SyncTransaction(ptx, TxStateInactive{/*abandoned=*/index == 0});
 
         for (const CTxIn& tx_in : ptx->vin) {
             // No other wallet transactions conflicted with this transaction
diff --git a/test/functional/wallet_reorgsrestore.py b/test/functional/wallet_reorgsrestore.py
index a600930acd8..d9be3bd2e9a 100755
--- a/test/functional/wallet_reorgsrestore.py
+++ b/test/functional/wallet_reorgsrestore.py
@@ -19,6 +19,7 @@ import shutil
 from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import (
         assert_equal,
+        assert_greater_than,
         assert_raises_rpc_error
 )
 
@@ -90,6 +91,54 @@ class ReorgsRestoreTest(BitcoinTestFramework):
         # Verify the coinbase descendant was also marked as abandoned
         assert_equal(wallet0.gettransaction(descendant_tx_id)['details'][0]['abandoned'], True)
 
+    def test_reorg_handling_during_unclean_shutdown(self):
+        self.log.info("Test that wallet doesn't crash due to a duplicate block disconnection event after an unclean shutdown")
+        node = self.nodes[0]
+        # Receive coinbase reward on a new wallet
+        node.createwallet(wallet_name="reorg_crash", load_on_startup=True)
+        wallet = node.get_wallet_rpc("reorg_crash")
+        self.generatetoaddress(node, 1, wallet.getnewaddress(), sync_fun=self.no_op)
+
+        # Restart to ensure node and wallet are flushed
+        self.restart_node(0)
+        wallet = node.get_wallet_rpc("reorg_crash")
+        assert_greater_than(wallet.getwalletinfo()['immature_balance'], 0)
+
+        # Disconnect tip and sync wallet state
+        tip = wallet.getbestblockhash()
+        wallet.invalidateblock(tip)
+        wallet.syncwithvalidationinterfacequeue()
+
+        # Tip was disconnected, ensure coinbase has been abandoned
+        assert_equal(wallet.getwalletinfo()['immature_balance'], 0)
+        coinbase_tx_id = wallet.getblock(tip, verbose=1)["tx"][0]
+        assert_equal(wallet.gettransaction(coinbase_tx_id)['details'][0]['abandoned'], True)
+
+        # Abort process abruptly to mimic an unclean shutdown (no chain state flush to disk)
+        node.process.kill()
+
+        # Restart the node and confirm that it has not persisted the last chain state changes to disk
+        self.start_node(0)
+        assert_equal(node.getbestblockhash(), tip)
+
+        # Due to an existing bug, the wallet incorrectly keeps the transaction in an abandoned state, even though that's
+        # no longer the case (after the unclean shutdown, the node's chain returned to the pre-invalidation tip).
+        # This issue blocks any future spending and results in an incorrect balance display.
+        wallet = node.get_wallet_rpc("reorg_crash")
+        assert_equal(wallet.getwalletinfo()['immature_balance'], 0) # FIXME: #31824.
+
+        # Previously, a bug caused the node to crash if two block disconnection events occurred consecutively.
+        # Ensure this is no longer the case by simulating a new reorg.
+        node.invalidateblock(tip)
+        assert(node.getbestblockhash() != tip)
+        # Ensure wallet state is consistent now
+        assert_equal(wallet.gettransaction(coinbase_tx_id)['details'][0]['abandoned'], True)
+        assert_equal(wallet.getwalletinfo()['immature_balance'], 0)
+
+        # And finally, verify the state if the block ends up being into the best chain again
+        node.reconsiderblock(tip)
+        assert_equal(wallet.gettransaction(coinbase_tx_id)['details'][0]['abandoned'], False)
+        assert_greater_than(wallet.getwalletinfo()['immature_balance'], 0)
 
     def run_test(self):
         # Send a tx from which to conflict outputs later
@@ -163,6 +212,9 @@ class ReorgsRestoreTest(BitcoinTestFramework):
         # Verify we mark coinbase txs, and their descendants, as abandoned during startup
         self.test_coinbase_automatic_abandon_during_startup()
 
+        # Verify reorg behavior during an unclean shutdown
+        self.test_reorg_handling_during_unclean_shutdown()
+
 
 if __name__ == '__main__':
     ReorgsRestoreTest(__file__).main()