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Crypto Estate Planning: How to Pass on a Bitcoin Inheritance

June 24, 2024

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Cryptocurrency investments are quickly becoming a component of mainstream finance. However, unlike traditional assets, crypto assets present a unique challenge in estate planning due to a lack of personally identifiable features that would otherwise facilitate the seamless transfer to dependents in the event of death.

Read on to learn about crypto estate planning, why it matters, and options for passing on a crypto inheritance to your dependents.

What Is Cryptocurrency Estate Planning?

Cryptocurrency estate planning is the process of making arrangements for the transfer of your digital assets to your beneficiary or heir after your passing.

Unlike traditional assets such as stocks or bonds, no central authority holds crypto assets, making it difficult for your designated beneficiary to access them.

According to Chainalysis, a blockchain analysis firm, the amount of Bitcoin lost forever is around 20% of the current Bitcoin supply - attributable primarily to forgotten passwords, misplaced seed phrases, or the owner’s death.

Unfortunately, the lack of crypto estate planning doesn’t only affect individual investors.

The death of Gerald Cotten, the founder and CEO of the Canadian cryptocurrency exchange QuadrigaCX, in December 2018, highlighted a challenge faced by crypto platforms. Cotten was the sole custodian of the platform’s cold storage private keys. His death led to the loss of $145 million worth of digital assets.  

Why Effective Crypto Asset Estate Planning Matters

Unlike traditional assets which are held by institutions, cryptocurrencies are stored using digital wallets where users have full control. This means access to your crypto is controlled by the private keys you hold.

If the heir is unaware that you own crypto or perhaps they can’t access your private keys/recovery phrases, the digital asset could be lost forever.

A well-defined plan for who inherits your crypto and how much helps avoid confusion or conflict among the beneficiaries. By outlining secure storage methods for private keys or recovery phrases, you lessen the chance of unauthorized access by anyone, including potential hackers or dishonest family members.

How to Safely Pass on a Bitcoin Inheritance to Your Dependents: 3 Options

Bitcoin inheritance works differently from traditional assets. In traditional assets, beneficiaries can prove their identity by providing documentation and then claim the deceased’s assets.

Conversely, Bitcoin has no central authority and only the owner has access to their wallet. That’s why you need estate planning for crypto to ensure your dependents can access your crypto holdings.

Let’s take a look at three ways to safely pass on a Bitcoin inheritance.

Leaving Instructions in Your Will

While Bitcoin differs from traditional assets, it is still considered an asset eligible for inclusion in a will. These instructions may include preferences for closing certain online accounts, transferring assets to heirs if possible, or memorializing accounts.

Detailed inventories of digital assets should not be included in the will itself, as a will becomes a public document after death. Instead, detailed records on the type of cryptocurrency held, the wallet in which it is stored, and how to access that specific wallet, including security information, should be kept separate.

You should also consider establishing a Lasting Power of Attorney in case of loss of mental capacity. This gives the attorney explicit authority to manage your assets according to your wishes. However, you may need to give the attorney direct access to your crypto wallet and private key.

Additionally, cryptocurrency may be designated as a specific gift to beneficiaries or included in the residue of the estate. Regardless, it’s important that the executor remains aware of the cryptocurrency's existence and has sufficient information to access it.

If a specific crypto asset is gifted to a beneficiary, the gift should be adjusted based on the beneficiary's current holdings. Keeping detailed records and staying informed about changes in crypto holdings ensures the will accurately reflects the individual's wishes.

Using a Trust

While trusts are commonly used as estate planning tools, implementing trusts across digital assets is quite new. This is primarily due to cryptocurrencies' volatility and concerns about their reputation.

Professional trustees may be open to administering trusts that include cryptocurrencies, provided the assets are held and managed by reputable third-party custodians. However, their willingness to do so may vary based on risk tolerance.

Trustees may invest and diversify assets. However, this comes with additional risks, given the high volatility of crypto assets.

Hiring a Crypto Inheritance Specialist Firm

The complex nature of estate planning in crypto has created a need for firms that help individuals and families in estate planning in the event of death. These firms tailor solutions that align with individual preferences, making crypto estate planning less stressful.

A crypto inheritance specialist firm helps you develop a comprehensive crypto inheritance plan. This plan has specific steps to transfer an individual's digital assets to designated beneficiaries upon their passing. It includes details such as the assets to be transferred, the recipients, and any additional instructions regarding the asset transfer process.

Crypto inheritance specialist firms also provide secure storage for private keys.

Some companies have also come up to help with crypto and estate planning, each offering unique features and solutions. Trustology, Digipulse, Cryptostead, BitIRA Cryptocurrency Inheritance Services, Legacy Trust, CoinFlow Inheritance, Crypto Legacy, BitWills, CryptoHeirs, CoinLegacy, Crypto Inheritance Co, and B21 are among the players in the market.

Do’s And Don’ts of Cryptocurrency Inheritance Planning

Now, let’s look at some of the do’s and don’ts of crypto inheritance planning.


  • Ensure your beneficiaries are aware of your crypto holdings.
  • Create a detailed inventory that outlines everything about your crypto assets in your will or trust. These could be the exchanges you use, types and amounts of crypto owned, and estimated values.
  • Consult professional advice from crypto estate planners, turning to a crypto-friendly executor/trustee who is knowledgeable about crypto assets.
  • Secure the private keys and avoid recording them in your will.
  • Regularly review your crypto estate inheritance plan and observe the latest best practices.


  • Don't assume your heirs are familiar with handling crypto. Educate them about the basics of crypto and consider setting up a digital wallet in advance to facilitate the transfer of assets.
  • Don't disregard tax implications. Depending on where you are located, there may be taxes payable on the crypto inheritance.

Inheritance planning is essential as a digital asset investor to ensure your dependents can access your investments in the case of your unexpected passing.

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How do you pass crypto to heirs?

You need a comprehensive crypto estate plan for transferring your digital assets to designated beneficiaries after your death. Some options include instructing a trustee or hiring a crypto inheritance specialist firm.

What happens to cryptocurrency if the owner dies?

If a crypto owner dies without proper estate planning, access to the digital assets could be lost forever. Unlike traditional assets, central authorities don’t typically hold crypto assets, and access is controlled by private keys. These keys are necessary for heirs to access the assets. However, proper estate planning can transfer your crypto assets to the designated beneficiaries according to the owner's wishes.

How do I transfer crypto after death?

Transferring crypto after death involves a few crucial steps. First, ensure your heirs are aware of your crypto holdings. Then, create a detailed inventory of your assets, including wallet and key information. Next, include clear instructions in your will or establish a trust for asset management.

Consider hiring a crypto inheritance specialist firm for expert guidance and secure storage of private keys. These steps streamline the transfer process, allowing your digital assets to pass smoothly to your chosen beneficiaries.

Can you name a beneficiary of a crypto account?

Yes, if your crypto exchange allows you to list a beneficiary, you can add one using the exchange. However, if your crypto is stored in your wallet, your beneficiary needs to be made aware of your digital wallet by crypto estate planning.  

You can include instructions in your will or establish a trust to designate beneficiaries for your digital assets. Remember to provide clear instructions on accessing the crypto assets, including information about wallets and private keys.

How do you inherit crypto?

Inheriting crypto involves receiving digital assets from a deceased owner. To inherit crypto, you must be designated as a beneficiary in the owner's will or trust. Once designated, you may need to follow instructions provided by the owner or executor of the estate to access and transfer the crypto assets, including obtaining private keys and accessing digital wallets.