Crypto inheritance: how to make sure your family can access your cryptocurrency
If you die with money in a bank, your family can eventually get it: the bank knows who you are, and there's a legal process. Cryptocurrency held in your own wallet is different. Whoever holds the keys controls the coins, and nobody can reset them. If the keys are lost, so is the money. In 2017, the analytics firm Chainalysis estimated that between 17% and 23% of all bitcoins in existence were already lost for good. Here's how to make sure yours aren't next.
This guide is about access, not investment advice: it doesn't say what to buy, sell or hold.
First, know which kind you have
How your family gets access depends on where your crypto is held:
- On an exchange or app (such as Coinbase): the company holds the keys for you. Your crypto is part of an account in your name, like a bank account.
- In a self-custody wallet (a hardware wallet, or a wallet app on your phone): only you hold the keys, usually as a recovery phrase of 12 or 24 words. Nobody else can restore access if it's lost.
Many people have both, plus accounts they've forgotten about. The first step is simply a list.
Crypto on an exchange
An exchange account passes to your heirs through your estate, much like a bank account. Coinbase, for example, asks the person handling the estate for:
- the death certificate,
- probate or estate documents, such as letters testamentary or letters of administration,
- photo ID of the person named in those documents,
- a signed letter saying where to transfer the assets.
Coinbase doesn't currently let you name a beneficiary for an individual account, so your will (or the law, if there's no will) decides who inherits it. The process takes time, but it works, provided your family knows the account exists. So the key thing to leave them is a note of which exchanges you use, not your password.
Crypto in a self-custody wallet
Here there's no company to ask. Your heirs need the recovery phrase (and any extra passphrase or PIN you added), and they need to know what to do with it. That creates a real dilemma:
- If nobody can find the phrase, the coins are gone forever.
- If the wrong person finds it, they can take everything, immediately, while you're still alive.
The aim is a plan where the phrase is safe today and reachable when it's needed.
Options for passing on a recovery phrase
- A sealed letter with your important papers, or with a solicitor or lawyer. Simple, but the paper can be lost, damaged or read too early.
- Not in your will. In many countries, a will becomes a public document once probate is granted. Mention that you hold crypto and where your instructions are, but never the phrase itself. See should you put passwords in your will?
- A split backup. Some hardware wallets can split your backup into several shares. Trezor's Multi-share Backup, for example, can be set up so that any two of three shares restore the wallet: one share alone is useless to a thief, and losing one doesn't lose the coins.
- Multisignature wallets, which need several keys to move funds, can spread control between people. They're powerful, but they're complex: your heirs must understand them.
- An encrypted digital vault that the people you choose can open only after a waiting period, so the phrase isn't exposed while you're alive.
Write instructions a non-expert can follow
Your family may never have used a crypto wallet. A good letter of instructions says:
- What you hold and where: each exchange account and each wallet, with the device or app it lives in.
- Where the keys are: where to find the recovery phrase or each share, and any PIN or passphrase.
- What to do first: for example, contact the exchange, or ask a named person you trust who understands crypto.
- What not to do: never type the recovery phrase into a website or share it with anyone who contacts them offering "recovery" help. Scammers target grieving families.
Then keep it current. A plan that lists a wallet you emptied two years ago, and misses the one you use now, won't help anyone.
Where Heritkey fits
We're building Heritkey to solve the dilemma at the heart of this guide. Your recovery phrases, exchange details and instructions sit in an end-to-end encrypted vault. Nobody can read them while you're alive, not even us. The people you choose can open them after a waiting period you set, and you can refuse any request while you're able to. See how Heritkey works and our digital estate planning checklist.