When You Die, What Happens to Your Bitcoin?
Without your private key, your heirs are locked out of your digital wallet. Being prepared, though, ensures they can gain access to your assets when the time comes.


According to the Cremation Institute, nearly 90% of cryptocurrency owners are worried about what will happen to their digital assets after they die. It turns out that they have good reason to worry.
Presently, there are over 12,000 different cryptocurrencies globally, making tracking them a challenge, especially if the owner becomes incapacitated or dies. The number of cryptocurrency investors is also growing, and according to Blockchain.com, there are now more than 83 million blockchain wallet users. That number is expected to grow, making it more likely than ever that you or a family member has digital currencies.
What Are Crypto Assets?
Cryptocurrency is a type of digital currency that uses cryptography for enhanced security. Along with Bitcoin (BTC), cryptocurrencies that you might have heard of include Ethereum (ETH), Litecoin (LTC), Cardano (ADA) and Dogecoin (DOGE), to name a few.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Cryptocurrencies had a rocky first half of 2022. Bitcoin is just barely keeping it head above $19,000, but investors do not think it’s price will be depressed for long. A recent study by Deutsche Bank found that about a quarter of bitcoin investors believe the cryptocurrency’s prices will be over $110,000 in five years. Of those interviewed, more than 70% said they planned to increase their crypto activity in the next twelve months.
Crypto Assets Provide Challenges When the Owner Dies
As the popularity and value of these assets grow, one of the areas struggling to keep up is the estate-planning field, as digital currencies and assets create unique challenges upon death. Instead of being treated as cash in a bank account, they are considered assets. However, because these assets exist only in virtual form and are encrypted, they can be nearly impossible for surviving heirs to find.
According to Marc Zimmerman, an experienced trust, estate and tax attorney at The Law Office of Michael A. Zimmerman, “Traditional methods of writing a will and expecting the named executor to find all the assets won’t work with Bitcoin and other digital currencies. While you're still alive, one of the largest advantages of a crypto wallet is that no one can get into it. This isn’t so great once you’re dead.”
Cryptocurrency is stored using a virtual wallet, and a private key is needed to open it. This private key is a string of random characters, essentially the password that gains access to the wallet contents. This is like a physical key to open a safe-deposit box. Of course, a bank can eventually access a safe-deposit box if the physical key is lost, but that is not true of a wallet with a missing virtual key.
Zimmerman explains, "If you die without leaving anyone the details of your private key, your cryptocurrency will become nearly impossible for your loved ones to access." While numbers are not available readily for many cryptocurrencies, Bitcoin estimates that approximately 4 million Bitcoins have been lost due to the deaths of owners and missing private keys. That is more than $240 billion today.
Be considerate to those you will eventually leave behind by giving your heirs access to your crypto assets. Many experts advise that investors write down the private key in your documents. However, Zimmerman cautions that doing so isn’t always safe or viable. “Wills are public documents, and sharing private crypto keys in them is not ideal. Leaving a small piece of paper with the key presents additional risks. An unscrupulous family member who understands crypto could walk away with the private key without anyone else knowing crypto assets exist. A piece of paper can also get thrown out by a well-intentioned friend helping to clear away the contents of the home.”
Solutions
“One option is to move your crypto to an exchange,” suggests Certified Financial Planner Avani Ramnani, lead adviser at Francis Financial. Exchanges and custodians like Coinbase offer a more traditional alternative, providing a vault that is essentially a physical safe-deposit box for your private crypto key.
In addition, Coinbase offers joint accounts, allowing a smoother transfer of inherited crypto assets to inheritors. If the custodian does not offer joint accounts, establish a beneficiary with the exchange holding your crypto investments. Ramnani cautions investors to “review your custodian’s service policies to understand how they plan to handle postmortem account management, ensuring that your loved ones inherit your asset easily.”
A trust account is an option, too. Zimmerman is working with a client to create such an account that owns the crypto. Zimmerman explains, “A trust account is beneficial because it avoids the probate process with possible easier transfer to heirs. The only issues around a trust owning crypto is that the estate attorney needs to make sure to put language in the documents to allow the trustee to purchase and sell ‘risky’ investments such as crypto.”
Other Digital Assets
Cryptocurrency may be an extreme example, but Ramnani recommends providing instructions and access to your entire digital life to your beneficiaries. “Include information on how to access online bank accounts, frequent-flier miles and other rewards points, PayPal, Venmo, Google Wallet, Apple Wallet, as well as prepaid cards such as from Starbucks or Uber.
Each of these accounts can have significant amounts of money in them, and it is important to make sure these dollars pass to your family.” Password managers such as Keeper, LastPass or Dashlane allow you to create strong passwords and share with family members, when appropriate.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Stacy is a nationally recognized financial expert and the President and CEO of Francis Financial Inc., which she founded over 20 years ago. She is a Certified Financial Planner® (CFP®), Certified Divorce Financial Analyst® (CDFA®), as well as a Certified Estate and Trust Specialist (CES™), who provides advice to women going through transitions, such as divorce, widowhood and sudden wealth. She is also the founder of Savvy Ladies™, a nonprofit that has provided free personal finance education and resources to over 25,000 women.
-
Vacationing With the Grandkids: What Could Go Wrong?
Traveling with your grandkids may be on your bucket list, but before you book the trip, consider the downsides of gramping.
-
Our Annual Grandparents’ Guide to Today’s Pop Artists
If you grew up loving Dylan, Coltrane or other great artists, here are some modern musicians that tap into similar styles and spirits. Check out our playlist.
-
What You Expect in Retirement vs What You Get: Where Reality Can Surprise You
A financial planner explores how your expectations for retirement can greatly differ from reality — and how you can plan for that.
-
What's Up With the 10-Year Treasury Bond: Four Financial Experts Weigh In
A financial professional and three colleagues explain the fluctuations in the 10-year Treasury bond and what investors should do.
-
Time to Spring-Clean Your Finances: A Financial Professional's Four Steps to Tidy Them Up
A midyear review of everything from spending to saving, with adjustments as needed, can set you on track to financial security. Plus, don't forget to check in on your workplace benefits.
-
Why a Law Firm Secretly Recording Client Conversations Is Wrong (and Illegal)
A law firm that has been recording client conversations without the clients' knowledge or permission and has threatened employees if they speak out faces legal and ethical challenges.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? Wrong
The wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term Care
Many people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?
Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.