If you pass away unexpectedly, your cryptocurrency could be lost forever. By design, there’s no central authority to help your family recover your assets — that’s the point of cryptocurrency, but it can also be a drawback.
A crypto inheritance plan can ensure that your digital wealth is accessible for your loved ones (and, when properly set up, it ensures that your assets are not accessible for anyone else).
This guide will walk you through the essential components of a crypto recovery plan, how to structure it safely, and what to do if you’re a family member trying to access a loved one’s assets.
If you’ve lost access to crypto, we’re here to help. Datarecovery.com provides password recovery, seed phrase reconstruction, hard drive data recovery, and other professional services for crypto investors. To learn more, call 1-800-237-4200 or set up a ticket online.
Inheriting Cryptocurrency: Understanding the Basics
The core principle of self-custody cryptocurrency is that you are the bank. Whoever controls a given wallet owns all of the assets within that wallet — but when you die, your executor can’t simply show a death certificate to a bank manager to gain access to your accounts.
With crypto, access is controlled by private keys, often represented by a seed phrase (most commonly, a 12- or 24-word phrase). Whoever has this phrase has complete control of the assets.
If that phrase is lost, the crypto is permanently inaccessible on the blockchain. We frequently see cases where millions in assets are locked away because of a lost or damaged seed phrase; while we’ve recovered assets for many clients, there’s no guarantee.
Your plan must bridge this gap, giving your heirs the information they need without compromising your security while you’re alive.
Key Components of a Crypto Inheritance Plan
For your heirs to successfully recover your assets, they will need a clear set of instructions.
Here’s what you’ll need to provide to ensure that they can access your assets:
- A Master List of Your Assets: This would be an inventory of all your digital assets, including cryptocurrencies, NFTs, and tokens. For each entry, list where it’s held (e.g., a hardware wallet, a software wallet, or on an exchange like Coinbase).
- Access Credentials: This includes wallet PINs, exchange login details (usernames and passwords), and, most importantly, the seed phrases for any self-custody wallets.
- Hardware Locations: If you use hardware wallets, your family needs to know where the physical devices are stored. A hardware wallet is useless without the device itself.
- Legal Authorization: Your will or trust must explicitly grant your executor or trustee the authority to take control of your digital assets.
Do not store your access credentials digitally. Write them down physically — if your credentials are stored digitally, you’re putting them at risk. We’ll discuss this more in the next section.
It’s also important to check (and re-check) your access credentials. You might be fairly sure that you remember your Coinbase password, but if you don’t double-check it before writing it down, you could be setting your heirs up for disappointment.
A Practical Action Plan for Crypto Inheritance
If you had an enormous pile of money, you’d have some ideas about how to keep it safe — treat your crypto the same way. Here’s how to avoid common mistakes:
- Document Everything Offline. Never store your master list of seed phrases and passwords on a cloud drive, in your email, or in a standard password manager. Don’t take photos of your seed phrase or send it to your own email account. BIP39 seed phrases follow a standard — they’re not completely random — and any language that looks like a seed phrase will be a prime target for hackers.
- Store the Information Securely (and in More Than One Place). Common options include a fireproof safe in your home or a bank’s safe deposit box (yes, we’ve brought banks back into the equation — sometimes, you need a third party to guarantee security).
- Consider Splitting the Seed Phrase. For added security, you can store half of a seed phrase in your home safe and the other half in a safe deposit box. Be aware that this creates two points of failure — if either half of the phrase is inaccessible for any reason, the other half will be effectively useless. Our laboratories can reconstruct a partial seed phrase, but most of the phrase needs to be intact to allow for this possibility.
- Appoint and Educate Your Executor. Choose an executor or trustee who is both trustworthy and reasonably tech-savvy. You don’t need to give them your seed phrases now, but you should give them a letter of instruction that explains what digital assets are, why they are valuable, and where to find the sealed, secure package containing the access credentials upon your death.
- Integrate Crypto into Your Legal Estate Plan. Work with an estate planning attorney who understands digital assets. This is no longer a niche field — we found hundreds of crypto-savvy estate attorneys with a quick Google search.
When Crypto Isn’t Accessible, Professional Help Is Available
A proactive and thorough inheritance plan is the best way to protect your digital legacy.
Unfortunately, data loss is always a possibility. At Datarecovery.com, we’ve invested heavily in developing proprietary, purpose-built systems designed for complex recovery scenarios. Our no data, no charge guarantee and risk-free evaluation process mean that you only pay for a successful recovery, providing you with peace of mind during a difficult time.
If you are the legal heir to an estate and do not have the necessary passwords or a complete seed phrase, we’re here to help. Datarecovery.com provides advanced password recovery and seed phrase recovery services. Our engineers use purpose-built systems to crack wallet passwords and can often recreate a partial seed phrase, provided the majority of the original words are known.
If you need assistance accessing a deceased family member’s cryptocurrency, contact our experts at 1-800-237-4200 for a free, confidential consultation.
