By The short answer: when you die, your crypto legally passes to your heirs through your estate, like any other property. Practically, they only receive it if they know it exists and can access it. Exchange accounts can usually be recovered through a bereavement process. Self-custodied wallets cannot: without your private keys or seed phrase, the assets are lost forever, even though they remain visible on the blockchain.
That gap between the legal position and the practical one is where families lose life-changing sums. Here is how it plays out, and what to do about it.
With a plan vs without a plan
With a plan, your death triggers a process. Your will names who inherits your cryptoassets. Your executor finds your inventory and access instructions, secures the assets, has them valued for probate, and passes them on. It is admin, not archaeology.
Without a plan, your family is left searching bank statements for exchange payments, guessing at passwords, and finding hardware wallets they cannot open. Some assets are found late. Some are never found. Some are found but locked away forever behind a seed phrase nobody wrote down, or nobody can locate.
Crypto on exchanges: recoverable, slowly
If your crypto sits on a major exchange, there is good news: most large platforms operate a bereavement process. Typically the executor or next of kin provides a death certificate, a grant of probate or equivalent, and proof of identity, and the exchange releases the balance or transfers it to the estate.
The catches: your family has to know the account exists, processes differ by platform and jurisdiction, and it can take weeks or months. Smaller platforms may have no clear process at all, and platforms do sometimes collapse, taking customer funds with them.
Self-custody: no keys, no crypto
Self-custody means the assets are controlled solely by your private keys, usually backed up as a seed phrase. There is no customer support desk and no reset process. If the keys are gone, the crypto is gone. A court order cannot move it. This is the single biggest reason inherited crypto is lost, and it is entirely preventable with instructions prepared in advance. Where partial information survives, a professional crypto wallet recovery attempt is sometimes possible, but prevention beats recovery every time.
How much crypto is already lost forever?
Nobody knows precisely, because a dormant wallet and a lost wallet look identical on the blockchain. The blockchain analytics firm Chainalysis has estimated that around 3.7 million bitcoin, roughly 20 per cent of the total supply, has not moved in five years or more and is likely lost. Other analysts put the figure lower, at around 3 million. Whatever the true number, death without a plan is one of the main ways coins join it.
The UK angle: probate and inheritance tax
Under English law, cryptoassets can be property, a position confirmed by the Property (Digital Assets etc) Act 2025. That means your crypto forms part of your estate, is valued at the date of death, and counts towards inheritance tax. If your estate exceeds the available nil-rate bands, IHT is normally charged at 40 per cent on the excess.
Two traps for families: tax can be due on crypto the estate has not yet managed to access, and executors must report holdings accurately. Valuing thousands of transactions across volatile assets is specialist work; our crypto tax accountant team supports executors with valuations and reporting.
Your action checklist
- Make an inventory of every exchange account, wallet and significant holding.
- Write access instructions a non-technical executor could follow.
- Keep keys out of your will. Wills become public after probate; instructions belong in a separate, secure document.
- Store instructions safely: a solicitor’s sealed letter, a safe, or split across locations.
- Tell your executor the plan exists and where to find it when the time comes.
- Mention cryptoassets in your will so they are clearly gifted to the people you choose.
- Review annually, because wallets, platforms and holdings change.
If you want help doing this properly, our crypto inheritance planning service builds the whole framework with you: discovery, access, security and tax, all coordinated with your will.
Important: Crypto Asset Consultants provides consultancy, education and guidance. We do not provide FCA-regulated financial advice. Cryptoassets are largely unregulated in the UK; their value can fall as well as rise and you could lose all your money. Consider seeking independent regulated advice for your wider financial planning.
Frequently asked questions
Can my family inherit my crypto?
Yes, legally: cryptoassets pass under your will or the intestacy rules like other property. Practically, your heirs can only take control if they know the assets exist and can access the keys or accounts.
What happens to crypto on an exchange when someone dies?
It sits dormant until someone contacts the platform. Most major exchanges will release funds to an executor who provides a death certificate, probate documents and identification, though it can take months.
Is crypto lost forever if nobody has the private keys?
For self-custodied wallets, almost always yes. Chainalysis has estimated that around 3.7 million bitcoin, about a fifth of supply, has been untouched for over five years and is likely lost.
Do you pay inheritance tax on crypto in the UK?
Yes. Crypto is valued at the date of death and included in the estate for IHT, and tax can be due even before the family has gained access to the assets.
How do I stop my crypto being lost when I die?
Inventory, access instructions, secure storage outside your will, an informed executor and a yearly review. A structured inheritance plan puts all of it in place.
Speak to us
Do not leave your family a puzzle with no solution. Book a free, no-obligation consultation about protecting your crypto for the people you love. Speak to us.