What Happens to Your Bitcoin After Death?

Without your private key, your digital wallet is inaccessible to your heirs. In any case, being prepared ensures that your assets will be available when they need them.

According to the Cremation Institute, approximately ninety percent of bitcoin owners are concerned about the fate of their digital assets after death. It turns out that they have cause for concern.

Globally, there are already over 12,000 distinct cryptocurrencies, which makes tracking them difficult, particularly if the owner becomes handicapped or dies. According to Blockchain.com, there are already over 83 million blockchain wallet users. The number of bitcoin investors is also increasing, and it’s probable that you or a family member will own digital currency as the number of users grows.

What Are Cryptocurrency Assets?

Cryptocurrency is digital money that uses encryption for security purposes. In addition to Bitcoin (BTC), you may have heard of cryptocurrencies such as Ethereum (ETH), Litecoin (LTC), Cardano (ADA), and Dogecoin (DOGE), to mention a few.

The first half of 2024 was tumultuous for cryptocurrencies. Bitcoin is barely maintaining its head above $19,000, but investors do not believe its price will remain down for an extended time. A recent poll by Deutsche Bank indicated that almost one-fourth of bitcoin investors expect the cryptocurrency price to surpass $110,000 within five years. More than 70% of individuals surveyed stated they intended to expand their crypto involvement during the next twelve months.

Crypto Assets Pose Difficulties Upon the Owner’s Demise

Since the popularity and value of these assets have increased, the field of estate planning is one of the sectors striving to keep up, as digital currencies and assets present unique issues following death. Rather than being classified as funds in a bank account, they are treated as assets. Because these assets exist only in digital form and are encrypted, it might be difficult for surviving heirs to locate them.

Creating a will using traditional methods and expecting the executor to identify all the assets is ineffective with Bitcoins and other digital currencies, according to Marc Zimmerman of The Law Office of Michael A. Zimmerman. Crypto wallets have the advantage that no one can access them while you are alive, and this is not so great after death.

A virtual wallet is used to store cryptocurrency, and a private key is required to access it. The private key is a string of random characters that function as the wallet’s password. This is the equivalent of a physical key to a safe-deposit box. A bank can ultimately access a safe-deposit box with a lost physical key, but this is not the case for a wallet with a lost virtual key.

If you pass away without providing your private key information, it will be extremely hard for your loved ones to access your cryptocurrency, according to Zimmerman. Due to the demise of owners and the loss of private keys, it is estimated that approximately 4 million bitcoins have been lost. It is difficult to find exact figures for many other cryptocurrencies; it is estimated that the remaining equivalent is almost $240 billion.

Be mindful of people you will leave behind by granting them access to your cryptocurrency holdings. Numerous authorities recommend that investors record the secret key in their paperwork. However, Zimmerman warns that doing so is not always safe or feasible. Wills are public documents; therefore, it is not ideal for providing secret cryptographic keys. Leaving a little piece of paper with the key increases the hazards involved. It is possible for an unscrupulous family member who knows crypto to steal the private key without anyone knowing there are crypto assets. A piece of paper can also be discarded by a friend helping to clear out the contents of a home.


One alternative is to transfer your cryptocurrency to an exchange, says Certified Financial Planner Avani Ramnani, lead advisor at Francis Financial. Exchanges and custodians such as Coinbase provide a more convenient solution in the form of a vault, which is effectively a physical safe deposit box for your private cryptographic key.

Coinbase provides joint accounts, which facilitate the transfer of crypto assets to inheritors. If the custodian does not support joint accounts, you must choose a beneficiary with the exchange that holds your crypto assets. Ramnani warns investors to examine their custodian’s service rules to see how they intend to conduct postmortem account administration so that their loved ones can inherit their assets without difficulty.

A trust account is another alternative; Zimmerman is working with a customer to establish such a cryptocurrency account. According to Zimmerman, a trust account is advantageous since it bypasses the probate procedure and may facilitate a quicker transfer to heirs. The main difficulty with a trust-owning cryptocurrency is that the estate attorney must include wording allowing the trustee to buy and sell “risky” investments.

Additional Digital Assets

Ramnani recommends giving your kids access to your digital life, including cryptocurrency. Provide instructions for accessing online bank accounts, frequent flier miles, rewards points, PayPal, Venmo, Google Wallet, Apple Wallet, and prepaid cards.

Each of these accounts may contain considerable sums of money, and it is crucial to ensure that your family inherits them. Consider a password manager that enables you to establish strong passwords and share them with family members if needed.