Cryptocurrency in Your Will: How to Pass It On

James had been mining Bitcoin since 2011. By 2023, his wallet contained £2.4 million worth of cryptocurrency. When he died suddenly at 38 from a heart attack, his widow Sarah knew the crypto existed—she'd watched him check the value obsessively.

But James had never told her where the private keys were stored.

After six months of searching through hard drives, USB sticks, and password managers, Sarah gave up. The £2.4 million is still there, locked forever in an inaccessible wallet.

James isn't alone. An estimated £2 billion in cryptocurrency held by UK residents has been lost or remains inaccessible due to death without proper estate planning. With 7 million people in the UK now owning cryptocurrency—and that number growing by 19% among Gen Z alone—the "digital inheritance time bomb" is ticking.

This guide explains exactly how to include cryptocurrency in your UK will, how to safely pass on access information without compromising security, and what your executors need to know to ensure your digital assets reach the people you choose.

Why Cryptocurrency Is Different from Traditional Assets

Cryptocurrency is legally recognised as property under UK law, confirmed by the Property (Digital Assets etc) Bill 2024. But it operates nothing like traditional property.

There's no central institution to contact—no bank manager, no customer service to recover access. The blockchain doesn't care about death certificates or probate documents. Only the private key matters.

Private keys are the ONLY way to access cryptocurrency. Lose them, and the assets are permanently inaccessible. Unlike bank accounts that executors can claim with proper documentation, crypto requires the specific technical access information that only you possess.

Cryptocurrency doesn't automatically form part of your "known" estate either. Your executors must be told it exists. A survey by the Law Society found that 93% of people with wills haven't included digital assets, leaving billions of pounds at risk of permanent loss.

Consider two scenarios: Emma dies with £50,000 in a Barclays savings account. Her executor contacts the bank with her death certificate and grant of probate. The bank transfers the money to her beneficiaries within weeks.

John dies with £50,000 in Bitcoin. His executor knows the Bitcoin exists but doesn't have the seed phrase. Without that 12-word recovery phrase, the Bitcoin is permanently locked. No amount of legal documentation can unlock it.

This irreversibility makes crypto estate planning not just important but essential. HMRC data shows that 43% of UK crypto holders are under 30—a generation that needs to start planning now, not decades from now.

What Cryptocurrency Actually Means for Your Estate

For UK tax and legal purposes, HMRC treats cryptocurrency as property, not currency—similar to shares or real estate. Learn more about protecting your assets in your will.

All crypto assets form part of your taxable estate for Inheritance Tax purposes. They're valued at market rate (in GBP) on the date of death. The standard £325,000 IHT threshold applies, with 40% tax on amounts above that.

Your executors must calculate the value from crypto exchanges or price aggregators at the time they dispose of the assets. This creates a volatility challenge: crypto worth £100,000 when you die might be worth £80,000 or £120,000 six months later when executors finally access it.

Capital Gains Tax may also apply when executors sell crypto or distribute it to beneficiaries. The estate receives a "step-up" in basis to the date-of-death value, but any gains after that date are taxable.

Executors have six months from death to pay IHT. Crypto's price swings can complicate this timeline significantly.

Here's what's critical: Crypto is NOT invisible to HMRC. It must be declared. Executors are legally responsible for identifying and valuing all crypto assets, and failure to declare can result in penalties for the estate.

According to HMRC's Cryptoassets Manual section CRYPTO25000, "cryptoassets will be property for the purposes of Inheritance Tax" and "the sterling value at the date of death will form part of an individual's Estate."

Types of Cryptocurrency You Need to Account For

When planning your crypto estate, you need to identify ALL your holdings—not just your main Bitcoin wallet.

Bitcoin and major cryptocurrencies like Ethereum, Litecoin, and XRP are the obvious ones. But your crypto portfolio likely includes much more.

Altcoins and tokens number in the thousands. That £200 in Cardano you bought in 2021? It counts. The Polygon tokens you received from a gaming platform? Those too.

Stablecoins like USDC or USDT are pegged to traditional currencies, but they're still crypto assets that need to be included in your estate plan.

NFTs (non-fungible tokens) might be digital art worth £5,000 each, or they might be domain names or virtual real estate. Each NFT is unique and can't be divided like Bitcoin.

Staking rewards and DeFi holdings represent assets locked in decentralised finance platforms, earning yield or providing liquidity. These can be complex to access and may have lock-up periods.

Crypto held on exchanges (Coinbase, Binance, Kraken) is generally easier to inherit than self-custody wallets, but still requires specific access information.

Mining rewards and airdrops received for participating in blockchain networks add up. That free token worth £50 today might be worth £500 tomorrow—or £5.

Create a complete inventory of ALL crypto holdings. Include exchange accounts, wallet addresses, NFT marketplaces, and DeFi protocols. Note approximate values but acknowledge the volatility.

The most common mistake? People say "I have £5,000 in Bitcoin" but forget £500 in Ethereum, £200 in staked tokens, three NFTs worth £1,000 each, and £150 worth of airdrops across two wallets. Those "small" holdings add up—and without documentation, they'll be lost forever.

Understanding Wallets and Private Keys

To explain what your executors need, let's demystify how cryptocurrency access actually works.

Wallets come in three main types:

Hot wallets are online and connected to the internet. These include mobile apps, browser extensions like MetaMask, and desktop software. They're convenient but less secure.

Cold wallets are offline storage devices. Hardware wallets like Ledger or Trezor look like USB drives but contain secure chips. Paper wallets are literally private keys printed or written on paper. Cold wallets are the most secure but the most complex to inherit.

Exchange wallets hold crypto on platforms like Coinbase or Binance. These are easier to inherit because there's a company to contact, but they're vulnerable to exchange failures or hacks.

Here's the critical distinction most people misunderstand:

Your wallet address is PUBLIC. It's like an email address or account number—visible on the blockchain, used to receive crypto. Knowing someone's wallet address doesn't give you access to their funds.

Your private key is SECRET. It's a long alphanumeric string that proves ownership. Think of it as the password that controls the crypto. With someone's private key, you can transfer all their cryptocurrency. Without it, the crypto is permanently locked.

Seed phrases (also called recovery phrases) are 12-24 word backup phrases that can restore access to a wallet. They're generated when you first set up most wallets. With the seed phrase, someone can recreate your wallet and access all the crypto inside—even if your hardware device is destroyed.

Passwords and PINs unlock software wallets or hardware devices, but they're not sufficient on their own. You need both the password AND the seed phrase or private key.

Here's what your executors specifically need for each wallet type:

Wallet Type	Security Level	Ease of Inheritance	What Executors Need
Exchange Account	Medium	Easier	Login details, 2FA recovery codes, email access
Hot Wallet (Software)	Medium	Moderate	Password + seed phrase + wallet name/app
Cold Wallet (Hardware)	Highest	Most Complex	Physical device + PIN + seed phrase + instructions

Without the private key or seed phrase, your crypto is permanently inaccessible—there's no password reset option, no customer service to call, no legal document that can unlock it.

What to Include in Your UK Will About Cryptocurrency

Your will should reference your cryptocurrency clearly, but it should NOT contain sensitive access information.

Here's what to include in the will document itself:

A general clause about digital assets: "I give all my cryptocurrency, digital tokens, NFTs, and other digital assets to [beneficiary's full legal name]."

Specific bequests if you want different crypto to go to different people: "I give my Bitcoin holdings to my daughter Emma Louise Smith. I give my Ethereum holdings to my son David James Smith."

Percentage splits for multiple beneficiaries: "I give 50% of my cryptocurrency holdings to my spouse and 50% to my children in equal shares."

Reference to a separate document: "Details of my cryptocurrency holdings and access information are contained in a separate confidential document stored [location]."

Here's what you should NEVER include in your will:

Private keys or seed phrases
Specific wallet passwords
Exchange login credentials
Detailed technical access instructions

Why? Wills become public documents during probate. Anyone can request a copy of a probated will. Including private keys in your will is like publishing them in the newspaper—anyone who sees them can steal your cryptocurrency.

Legal language that works well:

"I give all my cryptocurrency, cryptoassets, digital tokens, NFTs, and other digital assets held in wallets or on exchanges to my wife, Sarah Jane Williams. Details of the location and access methods for these assets are provided in a separate confidential document stored with my solicitor at [name and address]."

Appoint executors who are either crypto-literate or willing to work with specialists. You can even appoint a specific "digital executor" responsible solely for digital assets if your main executors aren't tech-savvy.

The goal is to be specific enough that your crypto is legally distributed to the right people, but vague enough that sensitive access information remains private.

Creating a Secure Separate Access Document

This separate document is where the real detail lives—and where most crypto inheritance succeeds or fails.

Your access document should include:

Complete inventory listing every cryptocurrency holding by name, approximate value, and location.

Exchange accounts with platform names (Coinbase, Binance, Kraken), usernames, email addresses used, and 2FA backup codes. Note that executors will need to contact the exchange directly with death certificates and probate documents.

Wallet addresses (the public addresses) for each wallet, so executors can verify holdings on the blockchain.

Wallet types and locations being very specific: "Ledger Nano X hardware wallet, silver, in fireproof safe in study" or "MetaMask browser extension, Firefox browser, main desktop computer."

Access methods for each wallet:

Passwords for software wallets
PINs for hardware devices
Seed phrases written out completely (12-24 words in exact order)
Any multi-signature requirements ("This wallet requires 2 of 3 signatures—contact John Smith and Emma Davis")

Step-by-step instructions assuming your executor has zero crypto knowledge. Write: "1. Plug Ledger device into computer. 2. Enter PIN: 8472. 3. Download Ledger Live software from ledger.com. 4. Click 'Restore from recovery phrase.' 5. Enter the 24-word seed phrase below..."

Contact information for a crypto-savvy friend or professional who can assist executors if they get stuck.

Approximate values with a clear note: "Values as of [date]. Cryptocurrency is highly volatile—current values may differ significantly."

Date of last update and a commitment to review every 6-12 months.

Where to store this extraordinarily valuable document:

✅ Physical copy in a fireproof safe at home (tell a trusted person where the safe is and how to access it)

✅ With your solicitor in secure professional storage

✅ In a safe deposit box at your bank (ensure executors can access it—some banks seal boxes on death)

✅ Encrypted digital copy in a password manager like 1Password or Bitwarden (store the master password in a separate secure location)

✅ Split information: Give some executors the physical locations, others the access codes (requires collaboration, prevents single-person theft)

❌ NOT in the will itself (becomes public)

❌ NOT on your computer unencrypted (vulnerable to hacking or theft)

❌ NEVER emailed, texted, or sent through messaging apps (can be intercepted)

Consider "dead man's switch" services that automatically release information after a period of inactivity, though these add complexity and potential security risks.

The critical balance: This document is as valuable as the cryptocurrency itself. If someone unauthorised finds it, they can steal everything. But if you make it too inaccessible, your legitimate heirs won't get it either.

Test your instructions. Could a reasonably capable person follow them without your help? If not, refine them.

Choosing Executors Who Can Handle Cryptocurrency

The best will and the clearest access document won't help if your executors lack the capability to execute them.

Consider these factors:

Technical literacy: Do they understand cryptocurrency basics? Can they navigate software, create accounts, and follow detailed technical instructions?

Trustworthiness: They'll have access to potentially significant wealth—life-changing amounts in some cases.

Availability: Can they act within a reasonable timeframe? Crypto markets are volatile, and delays can significantly impact the estate's value.

Willingness: Are they comfortable taking on this responsibility? Some people don't want the stress of handling complex digital assets.

Options to consider:

Crypto-savvy family member or friend is ideal if you have someone you trust completely who understands the technology.

Professional executors (solicitors, accountants) may have access to crypto specialists, though not all traditional professionals are comfortable with digital assets yet.

Co-executors: Appoint one person who understands finances and one who understands technology. They work together.

Digital executor: Some people appoint a separate executor specifically responsible for digital assets, distinct from the main executors handling property and traditional investments.

Crypto advisor: Not an executor, but someone your executors can consult—a tech-savvy friend who can help navigate wallets and exchanges.

What to tell your executors NOW, while you're alive:

That you own cryptocurrency
Approximately how much (they don't need access details yet)
Where the access information document is stored
Who to contact for help if needed
That crypto estate administration can be time-sensitive due to volatility

The common pitfall: Appointing your 75-year-old parent who's never used a smartphone as sole executor when you have £100,000 in cryptocurrency spread across three hardware wallets and two DeFi protocols.

Be honest about your executors' capabilities. Someone might be wonderful with traditional estates but completely overwhelmed by crypto. That's not a criticism—it's a reality to plan around.

Have a conversation with potential executors BEFORE naming them in your will. Confirm they're willing and able. You might discover your brother is terrified of technology but your cousin has been investing in crypto for years—that changes who you should appoint.

Special Situations: Exchanges, Staking, DeFi, and NFTs

Beyond simple wallet ownership, crypto can get complicated quickly.

Cryptocurrency held on exchanges (Coinbase, Binance, Kraken) is generally easier to inherit because there's an institution to contact.

Executors will need to provide death certificates, grant of probate, and proof of identity. Coinbase has a formal process requiring these documents plus valid photo ID of the executor. The process typically takes one to two months, longer for complex cases.

But exchanges come with risks. They can be hacked, go bankrupt (remember the FTX collapse in 2022), or have restrictive policies about deceased accounts. Check the exchange's terms of service now.

Staked cryptocurrency is locked in protocols to earn rewards. Your executors need to understand there may be lock-up periods—the crypto might not be immediately accessible.

Staking rewards continue accruing after death, potentially affecting the estate's tax calculations. Executors may need to "unstake" (withdraw from the staking protocol) before transferring to beneficiaries, which can take days or weeks depending on the protocol.

DeFi (Decentralised Finance) holdings are more complex. Crypto locked in smart contracts for lending platforms, liquidity pools, or yield farming requires interacting with protocols like Aave, Uniswap, or Compound.

This demands higher technical knowledge. Your access document should include specific protocol names, URLs, and instructions. Consider appointing a DeFi-knowledgeable advisor your executors can consult.

NFTs (Non-Fungible Tokens) include digital art, collectibles, domain names, and virtual real estate. Each NFT is unique—you can't divide one NFT between three children like you can divide Bitcoin.

NFTs are stored in NFT-compatible wallets (MetaMask, Trust Wallet, Coinbase Wallet). Specify the NFT marketplaces (OpenSea, Rarible, Foundation) where they can be viewed, valued, and sold if needed.

Some NFTs have enormous emotional value beyond monetary worth—perhaps digital art from a deceased artist or a rare collectible from a significant moment. Make your wishes clear about whether to keep or sell.

Multi-signature wallets require multiple people to approve transactions (e.g., 2 of 3 signatures required). Other key holders may need to be informed of your death, or they may need to be involved in transferring the assets.

For each special situation, include in your access document:

Platform or protocol name and URL
Type of crypto or NFT
How to contact customer support (for exchanges)
Any time-sensitive actions executors should take
Whether external specialists might be needed

The more complex your crypto holdings, the more important clear documentation and capable executors become.

Tax Implications Your Executors Need to Know

Your executors have legal tax obligations when handling your crypto estate.

Inheritance Tax (IHT):

Crypto is valued at market rate on the date of death, converted to GBP. It forms part of your total estate, which means it counts toward the £325,000 threshold.

Amounts above £325,000 are taxed at 40%. If your total estate (house, savings, investments, crypto) is worth £525,000, the £200,000 above the threshold is taxed at £80,000.

Executors must pay IHT within six months of death. Here's the volatility challenge: crypto worth £100,000 on the date of death might be worth £70,000 or £130,000 when executors finally access it six months later. HMRC guidance confirms there's currently no loss relief for crypto that drops in value after death.

Capital Gains Tax (CGT) on disposal:

When executors sell crypto to pay IHT or distribute it to beneficiaries, CGT may apply on any gains since the date of death.

The estate receives a "step-up" in basis to the probate value (the date-of-death value). If the crypto has increased in value since death, the gain is taxable to the estate.

When beneficiaries inherit crypto, they receive it at the probate value. If they later sell it, they pay CGT on gains since they inherited it, not since the original purchase.

Valuation challenges:

Use reputable crypto exchanges or price aggregators (CoinMarketCap, CoinGecko) to establish values. Document the valuation method, date, and specific price sources used.

Some obscure altcoins or NFTs may be hard to value accurately. If there's no active market, professional valuation may be necessary.

HMRC reporting:

Crypto MUST be declared on IHT forms. HMRC's Cryptoassets Manual makes clear that crypto is property for tax purposes, and failure to declare can result in penalties.

Keep detailed records of all valuations, transactions, and transfers. HMRC may query the estate's crypto reporting.

Practical advice for executors:

Consider consulting a crypto tax specialist, especially for estates with significant holdings or complex arrangements (staking, DeFi, NFTs).

Keep meticulous records of everything—valuations, access attempts, transactions, correspondence with exchanges.

Act with reasonable speed given market volatility, but don't rush and make costly mistakes.

Budget for potential tax liabilities before distributing assets to beneficiaries. Don't distribute everything immediately only to discover a large tax bill later.

Common Mistakes That Lead to Lost Cryptocurrency

Learning from others' mistakes is cheaper than making your own.

Mistake 1: Assuming family will "figure it out"

Cryptocurrency isn't like finding a bank statement in a desk drawer. Without explicit instructions and access information, it's usually impossible to recover. That assumption has cost UK families an estimated £2 billion.

Mistake 2: Writing seed phrases in your will

Wills become public documents during probate. Anyone can request a copy—family, creditors, curious neighbours. Including private keys or seed phrases in your will is like publishing your bank password in the local newspaper. Anyone who sees it can steal your crypto before your executors even know what happened.

Mistake 3: Storing access information only digitally

If you die suddenly, encrypted files on your computer may be inaccessible if no one knows the master password. Hardware failures, forgotten passwords, and corrupted drives compound the problem. Always maintain physical backup copies in secure locations.

Mistake 4: Never telling anyone you own crypto

Executors can't distribute what they don't know exists. "Secret wealth" becomes lost wealth. If you're keeping your crypto holdings completely private out of security concerns, at minimum tell your executors that crypto exists and where to find the documentation.

Mistake 5: Using only a hardware wallet with no backup seed phrase

Hardware devices can fail, be lost, or physically break. The seed phrase is your backup—but it must be stored securely, separately from the device itself. If both the device and the seed phrase are in the same safe, a house fire destroys both.

Mistake 6: Failing to update access information

You change wallets, switch exchanges, update passwords—but you don't update your estate documents. Six months after you die, your executors follow your instructions to access Wallet A, not realising you moved everything to Wallet B. Outdated instructions are nearly as bad as no instructions.

Mistake 7: Leaving all crypto information with one person

If that single person dies first, becomes incapacitated, or acts dishonestly, your entire plan fails. Consider splitting information among multiple trusted people, or using co-executors who must work together.

Each of these mistakes is illustrated by real cases. James's £2.4 million lost forever. Gerald Cotton's crypto exchange collapse left £150 million inaccessible. Families facing IHT bills on crypto they cannot access.

These aren't theoretical risks. They're happening right now to real people. You can avoid them all with proper planning.

Don't Let Your Digital Wealth Disappear

Cryptocurrency represents more than just financial innovation—for many, it's a significant portion of life savings, early investment in technology, or wealth being built for children.

Unlike traditional assets, there's no safety net. No customer service line. No way to recover lost crypto after you're gone.

The time to protect your digital wealth is now, while you can still ensure it reaches the people who matter most to you.

Your action plan:

Create or update your will to include specific provisions for cryptocurrency and digital assets
Document your complete crypto holdings with detailed access instructions in a separate, secure document
Choose executors who understand technology or are willing to work with crypto specialists
Store access information securely but accessibly—balance security with inheritability
Review and update your crypto estate plan every 6-12 months as your holdings change

Creating a UK will with clear cryptocurrency provisions doesn't require a £650+ solicitor appointment or weeks of complicated paperwork.

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Your complete, legally binding will
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Start your will today and take the first step toward protecting your cryptocurrency inheritance.

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Legal Disclaimer: This article provides general information about cryptocurrency and estate planning and does not constitute legal, tax, or financial advice. Cryptocurrency regulations and tax treatment are subject to change. For advice specific to your individual situation, particularly for complex or high-value crypto holdings, please consult a qualified solicitor, tax advisor, or financial professional. WUHLD's online will service is suitable for straightforward UK estates; complex crypto arrangements or high-value estates may require professional legal advice.

Cryptocurrency Security Disclaimer: Cryptocurrency is a volatile and complex asset. The security practices described in this article are general guidance; you are responsible for securing your own cryptocurrency and access information. WUHLD does not provide cryptocurrency storage, management, or access recovery services. Always research security best practices for your specific wallets and holdings.

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