What happens to crypto after you die?

Money Management
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Like so many people, I started investing in cryptocurrency during the pandemic.

But until very recently, I never considered what happened to this unregulated asset after we die.

I did some research on crypto estate planning last week.

My big take away? You better have a will if you want to (legally) pass down cryptocurrency to loved ones after you die.

Crypto isn’t like a traditional bank account.

You can’t designate a beneficiary to receive your digital coins after you pass away, even if you hold it on a mainstream exchange, like Coinbase or BiNance.

That means even if you have a will, your family must go through probate to get your crypto.

Probate is never fun, but at least these mainstream exchanges have big customer support teams to walk you through the process.

But things get murky if you’re a hardcore investor who uses a digital wallet and private key to store crypto.

You can designate someone in your will to receive these assets. But without the exact sequence of your key and detailed instructions on how to access the wallet, your family will never inherit your crypto fortune. It’s like having piles of cash in a secret location — and only you know the address.

Even if all of these documents and instructions are in place, transferring crypto after death is complicated at best. There’s no one-size-fits-all solution, and from the research I’ve done, it’s creating major headaches in the estate planning industry.

I consider myself a casual crypto investor. But my boyfriend is all in. He watches the markets daily. He trades on multiple exchanges and has at least one digital wallet. Crypto is his biggest investment.

But he doesn’t have a will. I also have no idea how to access his wallet or key if something happened to him. Neither does his brother, parents or anyone else.

I’m curious to see if anyone here is invested in crypto. If so, do you have a will? Or do you plan to pass on your crypto some other way?

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Considering I lose money gambling investing in crypto, I don’t think anyone would want my account.

Though if I had to do a will, I’d probably do it like this to make it straightforward:

  1. Have will give access to a bank vault or some other safe. (or 2 safes).

  2. Inside safe will have private key to wallet. Or 2 halves of private keys across 2 safes.

  3. Will execution will give person who is inheriting it access to the safes so they can have access to the private keys.

Alternatively, less securely just a master online password for LastPass or something in a safe that’ll contain all crypto and bank and all sorts of financial info. Wallets don’t require KYC so I’d assume the transfer of assets is quite a bit easier than dealing with a bank.

The taxes will not be any more complicated inheriting crypto than it would be fiat. But the frontend of getting the money seems to be loads easier than dealing with a bank (who are incentivized to horde the money as long as possible).

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This is so interesting! While I have only dabbled in crypto, buying a tiny fraction of bitcoin (which I’m losing money on), I didn’t envision what would happen to it after I die. I think Angie P’s suggestions are good, even though there are some extra steps involved versus inheriting “normal” things. It kind of adds to the intrigue of crypto.

As for a will, I created a very basic one via Legal Zoom several years ago. One that I need to update!

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Thanks for bringing up crypto. My boyfriend also invests in it. I’ve only invested $1000. Obviously, I’m watching it dwindle and hoping it’ll pick back up again. I’d like to learn more about it. I do need to create a will.

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It will be given to the winner of my will at my funeral.

“Everyone reach under your seat, at the count of three begins the taser fight. Last one standing gets it all”

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