Skip to main content
WUHLD
← Back to glossary

Ethereum

Definition

Ethereum is a cryptocurrency and programmable blockchain platform whose digital currency (Ether or ETH) is legally recognized as property in the UK and subject to inheritance tax.

Understanding how Ethereum works is crucial for will-making, as it requires specific estate planning to ensure your beneficiaries can access it after your death.

What Does Ethereum Mean?

Ethereum is both a cryptocurrency (digital money) and a blockchain platform that enables smart contracts—automated agreements written in computer code. The currency is called Ether (ETH), though most people refer to it simply as "Ethereum." Under UK law, cryptocurrency including Ethereum is recognized as property. HMRC treats Ethereum as property for inheritance tax purposes, meaning it may be subject to 40% inheritance tax if your total estate exceeds £325,000.

Unlike bank accounts, Ethereum is stored in digital wallets on online exchanges like Coinbase, hardware devices like Ledger, or software applications. Access requires private keys—very long passwords that cannot be recovered if lost. When you die, your executor needs to know you own Ethereum, where it's stored, and how to access it.

The key difference between Ethereum and traditional assets is permanent inaccessibility without proper planning. If your executor doesn't have your private keys, your Ethereum cannot be recovered—there's no bank to contact or password reset option. Sarah, who owns £8,000 of Ethereum on Coinbase, needs to list "Ethereum (ETH) cryptocurrency held on Coinbase exchange" in her will and keep login credentials in a separate secure document her executor can access. Without this, her £8,000 would be permanently lost.

While Bitcoin primarily functions as digital money, Ethereum is a programmable platform. For estate planning, this matters because Ethereum may be tied to other digital assets like NFTs or locked in staking protocols, adding complexity to how your executor accesses it.

Common Questions

"How do I include Ethereum in my will?" List your Ethereum holdings explicitly in your will by specifying the type of cryptocurrency (Ethereum/ETH) and where it's stored (exchange name, hardware wallet type). Never include private keys or passwords directly in your will as it becomes a public document after probate. Instead, create a secure separate document with access instructions for your executor.

"Is Ethereum subject to inheritance tax in the UK?" Yes, Ethereum is treated as property by HMRC for inheritance tax purposes. If your estate exceeds £325,000 (including cryptocurrency), Ethereum holdings will be subject to the standard 40% inheritance tax rate. Your executor will need to value your Ethereum at the date of death based on market prices.

"What happens to my Ethereum if I die without including it in my will?" If you don't include Ethereum in your will and no one knows how to access your wallet, your cryptocurrency could become permanently inaccessible. Even if family members know you own Ethereum, they cannot access it without your private keys or wallet passwords, effectively losing the asset forever.

Common Misconceptions

Myth: Ethereum and Bitcoin are basically the same thing

Reality: While both are cryptocurrencies, Ethereum is a programmable platform that enables smart contracts and decentralized applications, whereas Bitcoin primarily functions as digital money. For estate planning, this means Ethereum may be tied to other digital assets like NFTs or staked funds that also need addressing in your will.

Myth: My family can recover my Ethereum through the exchange if something happens to me

Reality: Most exchanges cannot recover access to your account without your login credentials, and self-custody wallets are completely inaccessible without private keys. Unlike bank accounts where executors can prove authority through legal documents, cryptocurrency requires the actual access credentials. There is no password reset option for blockchain-based assets.

  • Cryptocurrency: The broader category of digital currencies that includes Ethereum as a specific programmable type.
  • Digital Assets: The comprehensive category encompassing Ethereum and all online holdings requiring estate planning.
  • Bitcoin: Another cryptocurrency often compared to Ethereum, though Bitcoin serves as digital money while Ethereum is programmable.
  • Blockchain: The underlying technology that powers Ethereum and records transactions across a network.
  • Cryptocurrency Wallet: The digital tool where Ethereum is stored, requiring documentation for executor access.

Need Help with Your Will?

If you own Ethereum or other cryptocurrency, including it in your will is essential to prevent permanent loss. Without proper documentation, your digital assets could become inaccessible to your family forever—there's no way to recover cryptocurrency without the proper access credentials.

Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.