Leaving Cryptocurrency or NFTs Through a Will

You can't just mention your Bitcoin or NFTs in your will. You have to make sure your beneficiaries can find it when you're gone.

By , Attorney · Florida International University College of Law

Whether you're making a long-term investment or just dabbling in cryptocurrency, you need to have a plan for what will happen to your coins when you die. Cryptocurrency, a form of digital cash (of which Bitcoin is the most well known), isn't like traditional assets. It's not enough to simply include cryptocurrency in your will. Without the necessary information, your beneficiaries won't be able to find or access it.

To ensure your loved ones can inherit and access your cryptocurrency:

  • list your cryptocurrency in your will
  • include information about your digital wallets in your will
  • create a memorandum to your will with passwords and PINs, and
  • include a step-by-step guide to explain how your beneficiaries can access your cryptocurrency.

Putting Bitcoin and NFTs in Your Will

It might seem obvious, but you have to actually list cryptocurrency in your will. If something you own isn't listed in your will, it falls into the "residue" or "remainder" of your estatea sort of catch-all for your property. The remainder is a collection of everything you own that wasn't accounted for in your will, such as personal property, clothing, miscellaneous accounts, or subscriptions.

This isn't an issue when tangible property falls into an estate's remainder. Physical objects, like books or jewelry, can be seen, and other assets can be discovered through a paper trail like bank accounts or stocks.

However, cryptocurrency doesn't leave much of a paper trail—if any—and it's almost impossible to discover if you don't know where to look. If your beneficiaries are unaware of your Bitcoin, they might never even know of its existence if it's not mentioned in your will. To avoid this pitfall, clearly describe your cryptocurrency (and where to find it) in your will.

Listing Your Digital Wallets in Your Will

In addition to alerting your loved ones to the fact that your cryptocurrency exists, your will should also describe where to find it. Between the many types of digital wallets and the various online exchanges, your loved ones will be looking for a needle in a haystack unless you make it clear where your Bitcoin or other blockchain-based asset is stored.

Keep in mind that your wallet might be on a computer or smartphone, or require a certain device to access. It's important to include these devices in your will so that the key elements of your digital wallet stay together until your beneficiaries can access your cryptocurrency. You should also include any wallet back-ups in your will just in case something happens to the original.

Creating a Passwords and PINs Memorandum to Your Will

When you're adding cryptocurrency or NFTs to a will, there's a unique challenge—security. As wills go through probate, they become part of the public record, so including too much detail, such as the passkeys directly in your will, could create a security issue. Many crypto users are understandably leery about sharing this information for fear of getting hacked.

This need for security is why you should create a memorandum with your will, instead of listing sensitive in the will itself. A memorandum is a separate document that's referenced in your will but is not part of the will itself. A memorandum typically doesn't become part of the public record and is a good option to use when you want to maintain privacy.

Since a memorandum is a separate document, it can also be updated as often as needed without going through the formalities of changing or updating your will. The memorandum should include:

  • the type of digital wallet(s) you have
  • any computer, smartphone, or device on which you've stored your cryptocurrency
  • website links for any needed online exchanges or password managers, and
  • any login and password information needed for each of these wallets, accounts, and websites.

Your cryptocurrency memorandum can be kept with the will or in a separate location with your other estate planning documents, such as your power of attorney. Make sure that your executor can find the memorandum after you pass away.

If you're concerned about privacy, you can also consider creating a living trust instead of a will. See Leaving Cryptocurrency Through a Trust to learn about the full advantages of a living trust.

Make a Cryptocurrency or NFT Access Guide

You might be comfortable using Bitcoin, but your beneficiaries might not be. Some people find it difficult to get past cryptocurrencies' learning curve. To make it easier for your loved ones, include a step-by-step guide that explains how to access your cryptocurrency. This can be a separate document or it can be included with your passwords and PINs memorandum.

Even if your beneficiaries are already familiar with cryptocurrency, they might not be familiar with how to access your coins. Leaving plain language instructions will help remove some of the stress and frustration of trying to figure it out on their own.

When writing the instructions, assume that your beneficiary knows nothing about cryptocurrency. This guide should be able to walk a cryptocurrency novice through every step—from accessing your wallet to exchanging coins for traditional currency. Like your memorandum, this guide can be attached to your will and updated as often as necessary.

Test the guide yourself after creating it. Doing a walkthrough of these instructions will ensure that you included all the information your loved ones need to access your cryptocurrency.

Sample Provision for Adding Cryptocurrency to Your Will

Including cryptocurrency in your will means you need to balance necessary information and security. An estate planning lawyer can help you and might suggest a provision like this:

Other Considerations

Some people might never be comfortable with cryptocurrency or NFTs. Even with instructions, your beneficiaries could still have a difficult time navigating this process. Instead of leaving cryptocurrency, it might be easier if your beneficiaries simply receive the value of that investment. This requires the executor of your estate to have the technical skills needed to exchange cryptocurrency or NFTs for traditional cash. If needed, your executor can hire an estate administration attorney who has experience dealing with cryptocurrency.

If you're still concerned about privacy or what will happen to your cryptocurrency after you die, you can put your cryptocurrency into a trust. This will keep your cryptocurrency out of probate and will also help keep information about your coins private because trust documents don't normally become part of the public record. If using a living trust to pass on your cryptocurrency interests you, get help from an experienced estate planning attorney.

The Takeaway

Leaving cryptocurrency to your loved ones after your death requires more planning than traditional assets. With a little work now, you can simplify the process for your beneficiaries and ensure that they inherit your coins. You can provide all of the necessary information on your own, or you can consult an estate planning attorney for help. The important thing is to ensure your loved ones know that you have cryptocurrency and that they have the information needed to access it after you pass away.

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