What happens to your crypto if you die?



If all you do is dip your toe in cryptocurrency, it can be difficult to imagine your crypto as something worth discussing with a specialist lawyer. But that $ 100 in play money could add up to a significant percentage of your total investments, sometimes overnight. Sorry to be depressing, but YOLO – so make a plan for your crypto in the event of death.

Crypto accounts are not like traditional investment accounts. They can be more vulnerable to security issues, and you usually can’t name a beneficiary. For example, if you store your crypto on a physical device at home and a few friends know your key – a sort of password that gives access to a crypto wallet – one of those so-called friends might roam your house and steal your crypto as easily as they could go with your great-grandmother’s diamond earrings. Or, if you haven’t shared the keys with anyone, your crypto is gone forever.

It is important to understand how to safely store your crypto and communicate your wishes to loved ones, just as you would with any other valuable asset.


You trade and store cryptos in wallets, but not in leather. Crypto wallets can be either digital and managed on an app or website, or physical like a USB drive. The type you choose depends on what you intend to do with your crypto.

– HOT WALLETS: they are used for trading and buying crypto. The upside is that they’re usually free and convenient, but the downside is that they’re less secure because they’re still connected to the internet.

– COLD WALLETS: they are used to store cryptography for a longer period. Think of it like putting your crypto in a freezer.

The hot wallet is like a checking account – with money coming in and going out – while the cold wallet is more like a savings account, where you keep money for longer. You can have both at the same time.

Anyone who holds the keys, that is, who keeps custody of a password made up of randomly generated letters and numbers, has access to your crypto. It could be you, a third-party crypto exchange, or a hybrid of the two.

“Don’t keep more than what you’re willing to lose on a third-party exchange as a long-term solution,” says Alex Mejias, founder and managing counsel of James River Law in Richmond, Virginia. “You don’t control the keys. They could freeze your funds or be attacked. Mejias recommends an auto-custody or hybrid option as the value of your crypto increases.


A cold wallet can be a small physical storage device that is easy to misplace. Your cold wallet requires a PIN code for access, and you set up a recovery phrase as a backup in case you lose your key. According to Mejias, a fireproof safe at home or a safe in a bank is a must, but don’t store your cold wallet in the same place as the note with your key, PIN and recovery phrase. If someone finds all of these together, Bitcoin goodbye.

Most importantly, design a storage method that makes sense. “Don’t be so cute that you create a complicated system that you can’t remember,” Mejias says. He has heard of people writing their keys and cutting the paper into three pieces, hiding each piece in a separate place. “It sounds like a good idea, but it’s a horrible idea. If you lose any of these three, it’s gone forever. You have tripled your risk.


Name a beneficiary in your will and add a document to your estate plan that lists your crypto assets and all passwords, PINs, keys, and instructions for finding your cold wallet. If you have an account in a cryptocurrency exchange, your beneficiary may contact customer service to notify them of your death.

According to a Coinbase representative, a process is in place to guide loved ones, including one-on-one assistance from a Coinbase analyst. Gemini needs a death certificate and a power of attorney to initiate a transfer from a deceased person’s account.

“We hope to simplify this process in the future, so we are working on adding the functionality of account beneficiaries to our platform,” said a representative from Gemini in an email.


Make sure your assets are going to the right people by updating your estate plan, especially after a life change like marriage or divorce. Provide up-to-date instructions so beneficiaries can access your assets. Cold wallets also require maintenance, in the form of periodic firmware updates. This can help ease the burden on your loved ones and hopefully avoid arguments while they settle your estate after your death.

“Crypto has the potential to be a very explosive thing because the value can be so huge so quickly,” Mejias said. “When you think of five or ten years, we’re talking potentially a lot of money. ”

This article provides information for educational purposes. NerdWallet does not offer any advisory or brokerage services, nor does it recommend specific investments, including stocks, securities, or cryptocurrencies.


This column was provided to The Associated Press by the NerdWallet personal finance website. Sara Rathner is a writer at NerdWallet. Email: srathner@nerdwallet.com. Twitter: @SaraKRathner.


NerdWallet: Bitcoin Wallet: How to Choose the Right One for Your Cryptocurrency https://bit.ly/nerdwallet-bitcoin-wallet


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