What happens to crypto when you die?

What happens to your crypto when you die?

Legally, cryptocurrency is treated as property in most countries, so it becomes part of your estate like a bank balance or a car. Your will (or, without one, local intestacy rules) decides who is entitled to it. The rules vary by country and state, and an estate lawyer is the right person to ask about yours.

Practically, though, entitlement and access are two different things. A court can declare that your daughter inherits your bitcoin, but no court can move coins out of a wallet without the private key. If nobody knows a wallet exists, or nobody can unlock it, the coins simply stay where they are forever.

Self-custody vs exchange: two very different outcomes

• Exchange or custodial account

  If you buy and keep crypto on a platform that holds the keys for you (a centralised exchange, a broker app, or a custodial wallet), the platform controls the coins and you hold a claim on them. After your death, your executor or administrator can approach the company with proof of death and proof of their authority, and the company can transfer or liquidate the balance. It is slow and document-heavy, but it is recoverable.

• Self-custody wallet

  If you hold crypto in a hardware wallet, a mobile wallet, or a desktop wallet where you wrote down a recovery phrase, nobody else can move the coins. There is no company to call, no reset button, and no appeal. Whoever holds the seed phrase (or enough keys in a multisig setup) controls the funds. Self-custody is the path with the most control while you live and the most risk when you die.

• Somewhere in between

  Many people also have coins in places they half-forget: a wallet inside a browser extension, staking on a DeFi protocol, an NFT marketplace, a wallet attached to an old laptop. Each of these behaves like self-custody. An inventory is the first step, and a digital legacy checklist helps you find the pieces you have stopped thinking about.

Why is so much crypto lost forever?

Nobody can count lost coins precisely, but estimates are large. A widely cited 2017 Chainalysis study estimated that between 2.8 and 3.8 million bitcoin were already lost, roughly 17 to 23 percent of the supply at the time. Death is only one cause, alongside discarded hard drives and forgotten passwords, but it is the most predictable and most avoidable.

The pattern is the same in almost every story: one person knew the seed phrase, that person died, and the people who inherited the estate either did not know the wallet existed or found a hardware device they could not open. The habits which protect crypto from thieves (keeping keys secret, not writing things down, not trusting anyone) are exactly the habits that make it vanish on death. Good planning has to resolve that tension rather than ignore it.

Exchange accounts: what can family request?

Major exchanges do have processes for deceased customers, even if they are not well advertised. The details differ by company and country, so treat the following as the general shape.

Several large exchanges say they do not currently let you name a beneficiary on a personal account. Instead, the account passes through your estate, which means the person dealing with the exchange usually needs to be your executor or administrator, not simply your next of kin. Exchanges typically ask for a death certificate, a government photo ID for the person making the claim, and estate paperwork such as a probate grant or letters of administration, plus a signed instruction on where the assets should go.

Two practical points help enormously. First, your family needs to know which exchange you used and which email address the account is under. Second, knowing your password does not entitle anyone to log in as you after your death, and doing so can break the exchange's terms and create legal trouble for the estate. The clean path is the official claim, so leave your family a note about where the accounts are, not just how to open them. The same logic applies to passwords after death generally.

Seed phrases and hardware wallets: how do you pass them on safely?

A seed phrase (usually 12 or 24 words) is the wallet. Anyone with the words can restore your funds on a new device, which is both the point of it and the danger. Passing it on safely comes down to a few rules.

Never keep a single copy. Fire, flood or a careless clear-out can destroy a piece of paper, and a hardware wallet can fail or be lost. At least two copies in two separate places is the baseline.

Never put the seed phrase in plain text in your will. In many jurisdictions a will becomes a public record once it has been through probate. A will should say that you own crypto and who should receive it; it should not say the words that unlock it.

Keep the 'what' and the 'how' separate. A list of wallets and roughly what they hold can live with your digital will or estate papers. The seed phrase itself should be stored with stronger protection and released only to the person who is meant to have it.

Explain the device. Write down what the hardware wallet is, which app it pairs with, whether there is a PIN or an optional passphrase on top of the seed, and what your heir should do first. A short plain-language letter can save weeks of guessing; see writing a legacy letter.

What are the options for crypto inheritance?

• Paper plus a lawyer

  Write the seed phrase (or the location of it) on paper, seal it, and lodge it with a solicitor or in a safe-deposit box, with instructions in your will about who may collect it. Simple and technology-free, but a sealed envelope can be opened by the wrong person, a safe-deposit box can be frozen during probate, and the paper has to be current when you die.

• Multisig or built-in inheritance features

  Several wallet and custody providers offer setups where spending needs more than one key: for example two of three keys, held by you, a family member and the provider. If you die, your heir and the provider can move the funds together, and no single party could have stolen them beforehand. Strong security and a professional to guide the executor, at the cost of more complexity, usually a paid plan, and an heir who has to understand key management.

• A dead man's switch

  A dead man's switch releases information to people you choose if you stop confirming you are alive. For crypto, that information is usually not the funds themselves but the seed phrase, the passphrase, the list of exchanges and the instructions, stored encrypted and delivered automatically. Nothing is handed over while you are alive, you can update it in minutes when you move funds, and it reaches your heir without them having to find an envelope. Release happens exactly when you set it, after a series of reminders, so pick an interval that comfortably covers a hospital stay or a lost phone, and pair it with a paper or lawyer backup rather than relying on any single route.

How PostMortem handles crypto after death

PostMortem is a free iOS and Android app built around the dead man's switch idea. You create a message box with a check-in interval (daily, weekly, monthly, or custom from one hour to twelve months), and you check in with one tap in the app; reminders arrive by email and push at around 60, 70, 80 and 90 percent of the interval. If the interval runs out, the box is released to the recipients you named. The full flow is on how it works.

For crypto, a box might hold a text message explaining what you own and what to do first, a credential entry for each exchange account, a credential or text entry for a seed phrase and any passphrase, and an attachment such as a letter for your lawyer. Up to three text messages and five files of 20 MB each fit in one box, and there is no limit on credentials.

Messages, passwords, file names and file contents, and debt details are encrypted on your phone (AES-256) before upload and decrypted in the recipient's browser; PostMortem's servers never see the plaintext of those fields. The box name, your recipients' names and emails and the check-in schedule stay readable so reminders and delivery work, so call the box 'For Dad' rather than 'Bitcoin seed phrase' and keep the seed phrase itself in an encrypted field. To decrypt, your recipient needs the access key card, a QR-style image that carries your personal key, which you share with them in advance; you can issue a new card while you are alive, so treat it like the sealed envelope in the paper method.

You can read more about the design on the security page, and a one-tap test box lets you see a release end to end before you trust it with anything real.

What security warnings should crypto holders know?

• Phishing after a death

  Obituaries and probate notices are public, and scammers read them. Relatives may receive emails claiming to be from an exchange or wallet maker asking them to verify a seed phrase or pay a fee to release funds. No legitimate company ever asks for a seed phrase.

• Oversharing while alive

  If a wallet is genuinely locked and the seed is gone, there is a market of people offering to recover it. Some are honest specialists; many are frauds who ask for an upfront fee or for any partial information you have. Anyone who claims they can recover a wallet from nothing is lying.

Frequently asked questions

• Can my family access my crypto if I die without leaving the seed phrase?

  For a self-custody wallet, no. Without the seed phrase (or enough keys in a multisig setup) the coins cannot be moved by anyone, including the wallet manufacturer. For an exchange account, yes in most cases: the executor can make a claim with a death certificate and estate documents, and the exchange can release the balance without the password.

• Is crypto part of my estate?

  In most countries cryptocurrency is treated as property and forms part of your estate, so it passes under your will or under intestacy rules and may be subject to inheritance or estate tax. Rules differ by country and state. This is general information, not legal advice; an estate lawyer in your jurisdiction can confirm how it applies to you.

• Should I write my seed phrase in my will?

  No. In many places a will becomes a public document once it goes through probate, and copies circulate among lawyers, courts and relatives before that. Your will can state that you own digital assets and who should receive them, and can point to where the recovery information is held, but the words themselves should be stored separately and securely.

• Can someone just log into my exchange account with my password after I die?

  They may be able to technically, but it is usually a breach of the exchange's terms and can cause problems for the estate, especially if other heirs dispute what was done. Exchanges have official deceased-customer processes for exactly this reason. Leave your family the account details so they know where to make the claim, and let your executor follow the official route.

• What is multisig and does it help with inheritance?

  Multisig means a wallet needs more than one key to spend, for example two out of three. If you hold one key and give the others to a trusted person and a custody provider, no single party can steal the funds while you are alive, and after your death the other two can move them together. It is one of the stronger options, but it needs more setup and your heir has to understand how to use it.

• How does a dead man's switch work for crypto?

  You store the recovery information (seed phrase, passphrase, list of accounts, instructions) in an encrypted box and confirm regularly that you are still around. If you stop confirming for the whole interval, the box is released to the people you chose. The funds never leave your wallet; only the knowledge needed to reach them is passed on.