What Happens to Your Crypto When You Die, and How to Plan for It

What happens to your cryptocurrency when you die depends on where it is held: on an exchange, where your family deals with the company, or in your own wallet, where the recovery phrase decides. The same split applies to Bitcoin and every other coin. The way to prepare is a written plan, and the part to get right is the recovery phrase: if the phrase and the device are both gone, the coins are lost for good.

Crypto on an exchange

An exchange holds your coins for you, so your family has to deal with the company. Naming a beneficiary on the account is not always an option. As of October 2026, Kraken says (opens in a new tab) it does not offer a way to add a beneficiary, but it has a process for families and legal representatives.

Often a court or an official process confirms who is in charge of the estate first. How that works in each country differs, so ask an estate lawyer where you live.

Crypto in your own wallet

With a self-custody wallet, no company holds your coins, so no company can help your family. Whoever holds the recovery phrase controls the funds, and nobody can reset it. MetaMask says (opens in a new tab) anyone with your phrase or private keys can send tokens out of your accounts, and its support team cannot recover the phrase for you.

If the phrase is gone and the device is gone, the coins cannot be reached. If the wrong person finds the phrase, they can move everything. Trezor says (opens in a new tab) that anyone who steals a wallet backup can access your coins from a different device or wallet.

To see how the phrase works, read what a seed phrase is.

How to make a crypto inheritance plan

A crypto inheritance plan is a short list and a few decisions, in five steps.

1. List every holding and where it lives

   Write one line per holding: the exchange or wallet name, the coin, the email address used to sign up, and where a hardware wallet is kept. For a self-custody wallet, write where the backup is kept, not the phrase.

   Check the list against your email and bank records for old accounts. A missing account is a holding your family may never find.

2. Tell your executor the list exists

   Name an executor and tell them the list exists, where it is kept and how to reach it. They do not need the contents today.

   If you only trust one person with it, choose someone who can follow technical steps, or ask your attorney to hold a sealed copy.

3. Keep the recovery phrase out of your will

   Keep the phrase out of emails, scans and anything sent to your lawyer as a file as well.

4. Decide where the backup is kept and who can reach it

   Choose one place only you can reach now and a way your executor can reach it after your death, such as a safe-deposit box or a home safe whose location the list names. Ask an estate attorney about local rules on access to safes and boxes after death.

   Follow the rules for the phrase itself:

   • Write it on paper and keep it offline, never as a photo, screenshot or cloud note.
   • Never share it with anyone who contacts you, including anyone claiming to be support.
   • Type it only when restoring your own wallet in its official app or device.
   • Anyone who sees or copies it can take everything in the wallet, even while you still have the paper.

   If your wallet also uses a passphrase, the plan must say where it is kept, under the same rules. Trezor says (opens in a new tab) that with a passphrase on, the phrase alone does not open the wallet, and that a lost passphrase cannot be recovered by anyone.

5. Review the plan when your holdings change

   Update the list after you open an account, move coins to a new wallet or change devices, and check that your executor still knows where it is. A plan that is out of date can point your family to an empty account.

Example plan with made-up holdings

This example has no real platforms and no amounts. You own two holdings: coins on Exchange X and coins in a hardware wallet.

• Your list says: "Exchange X account, sign-up email on file. Hardware wallet in the desk drawer. Phrase backup in the home safe; your attorney knows who may open it."
• For Exchange X, your executor looks for the exchange's deceased-account or estate process in its help center, then sends the documents it asks for.

• For the hardware wallet, your executor opens the safe, restores the wallet from the phrase by following the wallet maker's official instructions, and moves the coins to an account the estate controls.
• The will mentions only that a list exists. It contains no phrase.

If you are the family member

Start with the owner's list, then with the exchange's estate process, which Kraken puts on its help page (opens in a new tab). As of October 2026, Kraken asks for these items and says more documents may be needed:

• A complete color image of the official death certificate (certificates from funeral homes are not accepted).
• A document showing you were appointed the estate's legal representative.
• A current color copy of your government-issued photo ID.
• A signed, dated letter confirming the account holder has died and naming you as legal representative.

Another exchange can ask for something different, so follow the list on that exchange's own page. Kraken's process waits on proof that you were appointed the legal representative. Where that takes a court case, see the rules by country.

Never give a recovery phrase to anyone who asks, even someone who says they are support. Be wary of anyone who offers to recover the funds, and never pay a recovery firm. Read about recovery scams, and see where to report a crypto scam if someone has already contacted you.

Estate process and taxes by country

Who handles an estate and how heirs are taxed are set country by country. Only the places below are covered.

United States

In California's formal probate, a judge decides (opens in a new tab) at a court date who is appointed personal representative, who then administers the estate. The whole process typically takes 9 to 18 months and can take longer.

Digital assets are property for US tax purposes. Under IRS rules (opens in a new tab), an heir's basis, the starting value used to work out a gain, is generally the fair market value on the date of the owner's death. If the heir later sells for more than that basis, the gain is taxable.

United Kingdom

GOV.UK's probate guide (opens in a new tab) says the executor named in the will can apply for probate, and with no will the closest living relative can apply. Scotland and Northern Ireland have different rules. The probate registry keeps the will, and it becomes a public record (opens in a new tab).

HMRC says (opens in a new tab) there is no Capital Gains Tax charge when someone dies. An heir is treated as acquiring the deceased's assets at their market value on the date of death, and the normal Capital Gains Tax rules apply if the heir later sells. Inheritance Tax is a separate tax on the estate, and HMRC administers it. The same helpsheet points to its Inheritance Tax section for whether the estate owes it.

European Union and EEA

Rules are set country by country, so check your own country's courts and tax authority. Your Europe, the EU's portal, says (opens in a new tab) an inheritance is usually handled by an authority, often a court or a notary, in the EU country where the person last lived. EU rules do not decide the inheritance taxes heirs pay, and the same page links inheritance tax information for each EU country.

Canada

The CRA says (opens in a new tab) a person who died is considered to have disposed of their capital property at fair market value immediately before death. The gain is reported on the deceased's final tax return, not taxed to the heir at death. Different rules can apply when property goes to a surviving spouse or common-law partner.

If a beneficiary later sells, the capital gain is generally the difference between the sale price and the fair market value reported on the final return. Ask a tax adviser how this applies to your crypto.

Elsewhere

Check your own country's courts and tax authority. Do not assume the rules above apply, and that includes Australia.

Wherever you live, keep the owner's purchase records and each holding's value on the date of death with the records of any later sale. Which value counts for tax depends on your country's rules.

Common misconceptions

• "My spouse can just log in." An exchange such as Kraken (opens in a new tab) deals with the estate's legal representative, and a self-custody wallet opens only with its recovery phrase, or with the device and its PIN or password (and its passphrase, if one is set).
• "I can name a beneficiary for my crypto." Not on every platform; check the exchange's page.
• "My will stays private." It can become public, so no phrase belongs in it.

Risks to understand

• A plan that is too complex fails. If your executor cannot follow it without you, simplify it.
• A list of holdings tells a finder where your money is. Store it with the same care as the backup, and update it so it stays correct.
• Be careful with any service that offers to hold your keys for you. Ask who controls the keys before you hand them over, and read about custodial and self-custody storage.

Before you decide where to keep your coins, read how to store crypto safely and what a seed phrase is.