Crypto is typically held in self-custody with private keys only you know. Without a plan, your crypto dies with you.
The Problem
| Issue | Consequence |
|---|
| No one knows your seed phrase | Funds are lost forever |
| Family doesn’t know you have crypto | No one looks for it |
| Crypto on exchanges | May be frozen or escheated |
| No will mentioning crypto | Distributed by default intestacy rules |
| Offshore exchange | Complex legal jurisdiction |
What to Prepare
| Item | Details |
|---|
| List of holdings | Which coins, how much, where |
| Wallet locations | Hardware wallet, software wallet, exchange |
| Seed phrases | Securely stored |
| Exchange accounts | Email, username |
| 2FA backup codes | For account recovery |
| Instructions | What to do with the crypto |
Safe Storage of Inheritance Info
| Method | Risk | Recommended? |
|---|
| Safety deposit box | Physical loss, delays | Yes |
| Lawyer / solicitor | Legal costs, delays | Yes |
| Password manager (shared) | Digital attack | Yes, with caution |
| Written note in house | Fire, theft | No |
| Cloud storage alone | Hacking | No |
| With the hardware wallet | Single point of failure | No |
The Split Storage Approach
| Location | Contents |
|---|
| Will | Statement that crypto exists + executor instructions |
| Solicitor | Basic list of holdings |
| Password manager (shared with family) | Exchange credentials + 2FA codes |
| Safety deposit box | Hardware wallets + seed phrase backups |
Never put actual seed phrases in your will. Wills become public after probate.
Crypto-Specific Will Clauses
| Clause | Purpose |
|---|
| ”I leave my Bitcoin wallet to [beneficiary]“ | Specific bequest |
| ”I leave 50% of my crypto portfolio to [charity]“ | Percentage bequest |
| ”My executor should liquidate crypto and distribute proceeds” | Cash inheritance |
| ”My crypto should be transferred to [beneficiary’s wallet]“ | In-kind transfer |
Executor Considerations
| Consideration | Action Needed |
|---|
| Does executor know crypto? | Choose someone crypto-aware |
| Do they know where keys are? | Clear instructions |
| Are there exchange accounts? | Provide login details |
| What about tax? | Crypto is subject to Inheritance Tax |
Inheritance Tax on Crypto
| Situation | IHT Treatment |
|---|
| Crypto held at death | Included in estate value |
| Transferred within 7 years of death | May be subject to IHT |
| Given to spouse / civil partner | Exempt from IHT |
| Crypto in trust | Depends on trust type |
IHT is 40% on value above £325,000 (nil rate band) plus residence nil rate band up to £175,000.
Bottom Line
Without a plan, your crypto could be lost forever. Store seed phrases securely but not in your will. Tell a trusted person how to access your holdings. Consider a solicitor or password manager for secure storage. Executors need clear instructions. Don’t let your crypto vanish when you do.
This content is for educational purposes only. Not financial advice. Do your own research before investing.