Crypto in your will: how to leave Bitcoin and other digital assets

Can you leave crypto in a will?

Yes. Bitcoin, Ethereum, stablecoins, NFTs and other tokens you own form part of your estate when you die. Your executor deals with them the same way as your other assets: collects them, pays any debts and tax, and passes them on under your will.

You can leave crypto in two ways:

• As a specific gift, such as "my Bitcoin to my brother". Describe it by type rather than an exact amount or wallet address, because holdings and prices change. If you've sold it or swapped it by the time you die, the gift fails and nothing replaces it.
• As part of the rest of your estate, so it's shared with everything else. This is simpler and usually suits people whose holdings move around.

If you die without a will, your crypto is shared under your state's intestacy rules like the rest of your property. See dying without a will.

Why access is the real problem

A will can say who gets your crypto. It can't hand over the means to move it. Depending on how you hold it, your executor may need:

• The private keys or recovery phrase (seed phrase) for a self-custody wallet
• The hardware wallet itself and its PIN
• The email address and login for each exchange account
• Access to the phone or app you use for two-factor authentication, or your backup codes
• A list of which platforms and wallets you use at all

If keys are lost, there's usually no way back. As the ATO puts it, data on a hard drive can sometimes be recovered, but "you can't recover a lost private key". Exchange accounts are easier, because the platform can verify a death, but your executor still has to know the account exists.

Should you put your seed phrase in your will?

A will can become a public document once probate is granted. In NSW, for example, the Supreme Court says a will admitted to probate is a public document and anyone can apply for a copy. Before that, copies pass through several hands: your witnesses, your executor, your family and the court registry.

Your will should say that your crypto is part of your estate and that you've recorded separately how to access it. The access details belong in a secure record your executor can open after your death.

What should you leave for your executor?

Write down where things are, not the secrets themselves. A good record covers:

• Each exchange or platform you use, and the email address on the account
• Each wallet: the type (software, hardware or paper) and where the device is kept
• Where your recovery phrase backups are physically stored, such as a safe or a named envelope
• How two-factor authentication works for each account and where any backup codes are kept
• Roughly what you hold, so your executor knows what to look for
• Where your purchase and transaction records are, which your executor and beneficiaries will need for tax
• Someone who can help, if your executor isn't confident with crypto

Update the record when you open a new account or move coins to a new wallet. An out-of-date list can be almost as bad as none.

What happens to an exchange account when someone dies?

Most exchanges have a process for deceased accounts. Your executor usually contacts the platform's support team, which freezes the account and asks for documents such as a death certificate, proof of the executor's identity and often a grant of probate or letters of administration.

Once satisfied, the platform generally either transfers the assets to the estate or sells them and pays out the proceeds. It can take time, especially with overseas platforms, and each one has its own rules. Your executor shouldn't log in as you with your password: that can breach the platform's terms, and the formal process is the one that protects them.

Do beneficiaries pay tax on inherited crypto?

For investors, the ATO treats crypto as a CGT asset. When an asset passes to a beneficiary under a will or the intestacy rules, the ATO says there are generally no capital gains tax consequences at that point. Tax comes into it when the beneficiary later sells, swaps or otherwise disposes of it.

• Cost base. For assets the deceased acquired on or after 20 September 1985 (which covers all crypto), the beneficiary generally takes over the deceased's cost base on the day they died.
• The 12-month discount. For the CGT discount, the beneficiary can treat the asset as owned since the deceased acquired it, not from the date of death.
• Exceptions. If the asset passes to a foreign resident beneficiary, or to a tax-advantaged entity such as a charity or a complying super fund, CGT can apply to the deceased at the date of death in some cases.
• Selling during the estate. If your executor sells crypto while administering the estate, normal CGT rules apply to that sale.
• Losses. Any unused capital losses the deceased had don't pass to the beneficiary or the executor.

All of this depends on records of what the deceased paid and when, which is why your record should say where your transaction history is. For a large or complicated portfolio, a tax agent can help your executor.

How Willies handles crypto

Every Willies will gives your executor authority to deal with your digital assets and online accounts, including crypto, as far as the law and each service's terms allow. If you tell us you own crypto, your will also says it's part of your estate and that the access details are recorded separately. You can name someone to help your executor with digital assets too.

For the access details, every will includes the first year of the Willies Plan, which has an encrypted digital legacy plan:

• You list your accounts, wallets and other assets, and where each one is.
• It's encrypted on your device before it reaches us, so we can't read it.
• Opening it takes two keys: one we hold and one in the executor kit you print.
• After a death is verified, your nominated executor signs in, enters their key and the plan opens for them.
• It records where your keys are, never the keys themselves. If you type something that looks like a recovery phrase, it warns you and suggests writing down where it's kept instead.

After the first year the plan is A$49 a year, renewing automatically unless you turn it off. If it ends, your legacy plan is still stored and still released to your executor, but you can't edit it until you renew. See online wills for how it all works.

Crypto estate checklist

1. List every exchange, platform and wallet you use.
2. Decide whether your crypto goes to a particular person or into the rest of your estate.
3. Make or update your will so it covers crypto and names an executor you trust. See how to make a will.
4. Store recovery phrases securely, offline and away from the will.
5. Write a separate record of where everything is and how to get in, without the secrets themselves.
6. Tell your executor the record exists and how they'll be able to open it.
7. Keep your purchase and transaction records, or note where they are.
8. Review the record whenever you open an account or move to a new wallet.