In short
Move the coins to a wallet with a seed only you have, in a small test transaction first. Then decide, without hurry, whether to keep or sell. Keep the date-of-death value and every transaction record: in most countries your own tax starts from that date. And now that you own crypto, you need a plan for your own heirs.
First, make it yours
The wallet you’ve opened is the dead person’s wallet. Its seed phrase has been on paper in their house, read by whoever helped you, maybe photographed along the way. Treat it as compromised, even if nobody did anything wrong. The fix is the same as for any exposed seed: a new wallet, a new seed, and the coins moved across.
- Get a hardware wallet of your own, from the maker’s own shop. A Ledger handles bitcoin and most other coins; hardware wallets, including Bitcoin-only variants, are compared on multisigsetup.com. Don’t reuse the inherited device: it may have a passphrase, a second seed or settings you don’t know about. If you do reuse it, wipe it and set it up fresh.
- Set it up with a new seed phrase, written on paper for now, and store it as carefully as you’d store cash in the same amount. Metal later.
- Send a small test amount from the old wallet to the new one. Check it arrives. Then send the rest. For bitcoin, the fee is per transaction, not per coin, so two transactions cost twice the fee and nothing more.
- For tokens on Ethereum-style wallets, you’ll need a little of the network’s own coin in the old wallet to pay the fees, and you’ll have to move each token separately. Ethereum, tokens, NFTs and DeFi covers what to look for.
- Record the transactions: date, amount, from and to. Moving your own coins between your own wallets isn’t a sale and isn’t taxed, but you’ll want the trail.
If the amount is large and it’s bitcoin, a 2-of-3 multisig is worth the weekend it takes; a single seed is one burglary or house fire away from gone.
Several heirs, one wallet
Crypto divides exactly. If three of you inherit a wallet in equal shares, send each person their third to a wallet of their own; a bitcoin address can receive any amount. Agree the valuation date with the executor first, so the split is in coins, not in a currency amount that moves while you argue.
The alternative, selling everything and splitting the money, is simpler for heirs who don’t want crypto, and it fixes the value on the day of sale. Either is fine; mixing them (some take coins, some take cash) works too, as long as everyone uses the same value at the same date.
Keep or sell
This site doesn’t give investment advice, and nothing here says what crypto will be worth. A few facts that bear on the decision:
- Tax on a later sale starts from the date of death in the United States and the United Kingdom: you’re treated as having acquired the coins at that day’s value, so only the gain after that is taxed. In Australia you inherit the original owner’s purchase price and holding period instead; in Canada the estate has already paid tax on the gain up to death. The country pages have the details.
- Selling in an estate can be the executor’s job, not yours, if the estate needs money for tax or debts. Ask before you move anything the estate may still need.
- Nothing has to be sold this week. The pressure to “lock in” a value is the same pressure scammers use. Decide on your own timetable.
Selling safely
- Use a regulated exchange in your own country and your own name. You’ll be asked for ID and, for larger amounts, where the coins came from: the estate papers are the answer. Keep them to hand.
- Send a small amount first, confirm it shows up, then the rest.
- Expect limits on how much you can withdraw to a bank account per day, and a hold on new accounts.
- Don’t sell through someone you met online, an “OTC desk” that contacted you, or a site that asks for your seed words to “connect the wallet”.
- Keep the exchange’s transaction history. It’s your tax record.
Records to keep
- The date-of-death value of what you received, and how it was determined (Valuing crypto at the date of death).
- The estate documents showing the crypto came to you.
- Every transaction since: moves between your own wallets, sales, swaps, with dates and amounts.
- For Australia: the deceased’s own purchase records, because your cost base is theirs.
You’re a crypto owner now
Which means everything in the planning section applies to you. Write down what you hold and where, tell someone, and keep the seed somewhere that will survive you. The person you inherited from may have done that well or badly; either way, you’ve seen what it’s like on the other side.