In short
What happens depends on where the crypto is. On an exchange, your heirs can claim the account with the estate’s paperwork. In your own wallet, nobody can open it without the keys, whatever a court rules. Either way the crypto is part of your estate: it can be inherited and taxed like other property, but it is only as easy to reach as the instructions you leave.
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. This page gives the short answer; each section links to the full guide.
It depends on where you keep it
| Where it is | What happens after a death | What heirs need |
|---|---|---|
| Exchange account (Coinbase, Kraken, Binance) | The exchange holds the keys. Heirs claim the account through a formal process. It is slow, but it works. | To know the account exists, plus the death certificate and the court document that appoints the executor. See claiming crypto from an exchange account. |
| Your own wallet (hardware wallet or seed phrase) | There is 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, but that ruling does not give you the words that unlock the wallet. | The seed phrase, the PIN and any passphrase. See found a hardware wallet or seed phrase and passphrases and inheritance. |
| A wallet app on a phone | Convenient, and the worst of both worlds for inheritance: the phone must be unlocked, the app backed up, and nobody may know it is there. | The phone’s unlock code and the wallet’s backup. See what your heirs need. |
| A bitcoin ETF or crypto held through a broker | An ETF share is a security. It sits in a brokerage account and passes to your heirs like any other investment, with no seed phrase. | The broker account details. See Bitcoin ETFs and crypto in a brokerage account. |
Your will and probate
Crypto is treated as property in an estate. HMRC says that “cryptoassets are treated as assets of a person’s estate in much the same way as other assets, such as bank accounts, property, shares, and investments” (HMRC Cryptoassets Manual, CRYPTO25000), and the IRS says that “digital assets are considered property, not currency” (IRS). Your will decides who inherits it. Whether it has to go through probate is a separate question: see does crypto go through probate?
One rule applies everywhere: never put seed words, PINs or passwords in a will. In England and Wales, once a grant of probate has been issued, anyone can order a copy of the will, and in most US states a will filed with the probate court becomes a public record. Keep the will for who gets what, and keep the instructions in a letter of instruction. More in crypto in your will.
Tax when someone dies
The tax treatment of inherited crypto differs by country. In the United States and the United Kingdom, heirs take the crypto at its value on the date of death. In Canada the person who died is treated as having sold their crypto just before death, and the tax is paid by the estate. In Australia the heir takes over the deceased’s original purchase price, which makes the purchase records as important as the keys. See inheritance tax on crypto by country, and valuing crypto at the date of death for how to record the value.
Why crypto gets lost
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. The five common failures are in why crypto gets lost when people die:
- Nobody knew it was there.
- They knew, but could not get in.
- The secret was in the wrong place, such as a will or a cloud note.
- The instructions were too technical for the person who had to follow them.
- The plan went stale.
The famous cases show the same patterns, from QuadrigaCX to the hard drive in the Newport landfill: lost crypto fortunes.
What to do now
- List what you have and where it is, without secrets. The free templates include an inventory.
- Write a letter of instruction for the least technical person who might have to follow it, and name someone they can ask for help.
- Store your seed phrase so that it survives a fire and can be found by the right person: where to keep seed phrases and secrets.
- Choose a method that fits your holdings: inheritance methods compared, including multisig and timelocked keys.
- Plan for the case where you are alive but cannot act: incapacity.
- Check the plan once a year: the yearly check-up.
If someone has died
Start with your first steps. Then see how to find out what crypto someone had, how to claim it from an exchange, and what can and cannot be recovered when the keys are really lost. Expect approaches from people offering to recover coins for a fee: recovery scams that target heirs.
This site is general information, not legal or tax advice. Rules differ by country; the country pages cover the United States, the United Kingdom, the European Union, Germany, France, the Netherlands, Canada and Australia.