In short
Crypto rarely disappears because of a hack. It disappears because nobody knew it existed, nobody could open it, or the one piece of information that opened it was lost or exposed. Each of those has a simple fix.
With a bank account, a family can walk into a branch with a death certificate and the bank does the rest. Crypto doesn’t work like that, and the difference catches families out.
No company can reset it
If someone kept their crypto in their own wallet (called self-custody), there’s no bank, no customer service and no court that can open it without the keys. A judge can rule that you are the rightful heir. That ruling doesn’t give you the twelve or twenty-four words that unlock the wallet.
Crypto on an exchange such as Coinbase or Kraken is different. There the exchange holds the keys, and heirs can claim the account with the right paperwork. That’s slow, but it works. See Claiming crypto from an exchange account.
The five ways it goes wrong
1. Nobody knew it was there
This is the most common one. There’s no statement in the post, no letter from a fund manager and often no mention in the will. An old exchange account, a wallet app on a phone, a hardware wallet in a drawer that looks like a USB stick: none of it announces itself.
Fix: keep an inventory. It doesn’t need to contain any secrets, just what exists and where. The asset inventory template is made for exactly this.
2. They knew, but couldn’t get in
The family finds a hardware wallet but not the PIN. Or they find the seed words but not the passphrase that was added on top. Or the phone with the wallet app is locked with a code nobody knows.
Fix: think through every lock between your heirs and the coins, and make sure each one has a way through. What your heirs need lists them.
3. The secret was in the wrong place
Seed words written into a will are a classic mistake. In England and Wales, and in most US states, a will becomes a public document once probate is granted, and anyone can order a copy. The same goes for seed words kept in a cloud note or emailed to a relative “just in case”.
Fix: your will says who inherits. The instructions and secrets live elsewhere. More in What to put in your will.
4. The instructions were too technical
“Restore the descriptor in Sparrow and sign with two of the three devices” makes perfect sense to the person who wrote it. To a grieving partner it’s gibberish, and gibberish is where people start searching the internet and end up on a scam site.
Fix: write for the least technical person who might have to follow the steps, and name someone they can ask for help.
5. The plan went stale
The letter says the coins are on an exchange that closed three years ago. The hardware wallet was replaced and the new PIN never written down. The trusted friend who held a spare key has moved abroad and changed number.
Fix: a short yearly check-up.
The heirs’ biggest risk comes later
After a death, heirs are easy targets. People who post online about lost or inherited crypto get approached by “recovery experts” within hours. None of them can do what they promise. Mention this in your instructions, and see Crypto recovery scams that target heirs.
What this means for your plan
A good plan answers four questions for your heirs:
- What is there, and roughly what is it worth?
- Where is each part kept?
- How do we get in, step by step?
- Who can we ask for help, and who should we never trust?
The rest of this section works through each of those. Next: What your heirs need.