By Debbie Carlson

If you bought bitcoin, you may be sitting on a digital gold mine. Have you thought about how you will pass it onto an heir?

Chances are no. Estate planning and business attorney Laura Cowen says even for financially savvy clients who own crypto, these digital assets can be a blind spot.

"For some reason, they think of it as separate from their estate," she says. "The biggest risk with crypto isn't so much someone stealing it or going to the wrong family member. It's more just that families don't know that their loved one owned it."

Given it is a relatively new asset class, your estate-planning attorney may not ask about your crypto holdings. And even if you include it in your asset list, the executor of your estate may not be able to access it.

Cryptocurrencies owners often put safeguards to make sure not just anybody can access it. This security matters because like physical gold, bitcoin is a bearer asset, so whoever holds it, controls it, says Alex Tapscott, managing director, digital asset group at Ninepoint Partners. Tough security is a good thing while you are alive, but it can be problematic for your heirs after you die unless your estate is prepared for it.

"The question isn't, 'Where are the keys to mom's apartment?'" says Bill Ulivieri, founder of Cenacle Capital Management, an investment advisor who also guides estate planners on cryptocurrency. "The question is, 'Can we get through a biometric lock on her cellphone after she's been buried or cremated.'"

How you own crypto matters

If your digital currency investments are indirect such as through exchange-traded funds like the $71 billion iShares Bitcoin Trust ETF, or through stocks such as MicroStrategy, which owns Bitcoin, executors can access those holdings the same as any other traditional assets held at brokerage accounts.

By contrast, if you store your coins on cryptocurrency exchanges, it may be difficult for executors to access those coins if they can't get into the account. Coinbase offers some tips such as passing on your private keys to your heirs so that they can claim an account. Unlike traditional brokerages, Coinbase doesn't have an option to name beneficiaries for an account.

Don't count on cryptocurrency exchanges having the same level of customer service support offered by traditional securities custodians to estate executors, says David Haughton, senior corporate counsel at Wealth.com. Executors may be on their own trying to get account access.

Document thoroughly

Best practices include providing your heirs a list of coin names, the number owned and where they are located, whether on an exchange, in a digital wallet or stored offline in a device. They will also need to know how to access the private keys or seed phrases, a series of words that will allow your executor to recover wallets and private keys, Ulivieri says.

If your coins are located on your phone or laptop, you should include information about how to unlock those devices. If you use a biometric lock for your phone, include an alternative way to unlock it so your executor can access the phone, he adds.

Also important are passwords to access cryptocurrency exchanges or digital wallets, and passwords to email accounts or authenticator apps that are often used for multifactor authentication. For coins stored offline in a device, executors will need PINs to unlock the hardware and transfer the coins, Ulivieri says.

Because of the complexity of accessing crypto, the sources recommend naming a digital fiduciary who can work alongside the executor and estate-planning attorney.

Craig Robson, founding principal and managing director for Regent Peak Wealth Advisors, helped a widow who became a client access Bitcoin her husband owned when their estate planner didn't know how to access the coins to settle the estate. The husband left instructions to retrieve the private keys in a lock box location and Robson moved the Bitcoin from an online account to secure offline storage.

Experts recommend storing crypto offline in hardware devices such as Ledger or Trezor to prevent theft or loss, especially if the coins are part of an estate plan, and keeping the devices' software updated.

Crypto can be easily divisible between any number of heirs, and Robson says it is worth discussing with heirs whether they want to inherit the assets or to liquidate it for cash. Because of the volatility of the asset class, executors shouldn't take their time in distributing the coins or the cash. Those instructions should also be included in your estate plan.

"You need to have procedures and tools and resources in place to trade or liquidate those if that's something that (the granter) wants done in a timely fashion," Robson says.

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June 14, 2025 04:00 ET (08:00 GMT)

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