Millions of cryptocurrency investors are being urged to update their wills and estate plans amid warnings that digital fortunes could be lost forever if no arrangements are made before death. Legal experts say the rapid rise in cryptocurrency ownership has created a growing estate planning challenge, with many people failing to leave clear instructions on how loved ones can access their digital assets. Unlike bank accounts or investment portfolios, cryptocurrencies are often protected by private keys, passwords and two-factor authentication that only the owner knows.
Crypto poses unique inheritance risks
Harry Joffe, Head of Legal Services at Discovery Life, warned that many investors spend years building wealth in digital assets without considering what would happen if they died unexpectedly.
“Many people spend years building wealth in digital assets but never stop to ask what would happen if they died tomorrow,” he said.
“Unlike a bank account, crypto isn’t something an executor can simply access by presenting a death certificate.”
He explained that one of the biggest dangers is that family members may either be unaware the assets exist or know about them but have no way of accessing them. Without the correct passwords, recovery phrases or private keys, cryptocurrency can become permanently inaccessible.
Wills remain a major concern
The warning comes as large numbers of people continue to die without a valid will. Experts say many people either never begin the process or fail to complete legally valid estate planning documents, leaving families facing unnecessary legal complications. As digital investments become increasingly common, estate planners say it is essential that wills are updated to include cryptocurrencies and other online assets.
Five key steps for crypto owners
Legal specialists recommend that anyone holding digital assets should:
- Include details of digital assets in their will.
- Keep passwords and private keys separate from the will in a secure location.
- Leave clear instructions explaining how digital assets can be accessed.
- Appoint an executor with experience handling digital estates.
- Consider potential tax liabilities, including inheritance and capital gains implications.
Experts stress that while a will should identify digital assets, it should never contain passwords or recovery keys, as these documents may become public during probate.
Estate plans should evolve
Joffe said estate planning should be reviewed whenever a person’s financial circumstances change.
“As your financial life evolves, so should your estate plan.
“If you’ve invested in cryptocurrency, opened offshore accounts or built wealth through digital assets, your will and estate plan need to reflect that. This ensures that the wealth you have built can be passed on as intended.”
With cryptocurrencies now forming part of many investment portfolios, legal professionals are encouraging investors to ensure their digital wealth does not become permanently locked away, leaving loved ones unable to benefit from assets that may have taken years to build.
