What happens to my crypto if I die without a will?

If you die without a will (intestate) and have digital assets, your crypto and NFTs will be subject to your state's intestacy laws. This means your assets will be distributed according to a predetermined legal hierarchy, typically to your closest relatives. However, without specific instructions or access information (private keys, seed phrases), your heirs will likely be unable to access or recover these assets, rendering them permanently lost regardless of legal entitlement.

Can a lawyer help me with my digital asset estate plan?

Yes, absolutely. A lawyer specializing in estate planning can help you integrate your digital assets into your overall will or trust. They can draft legal documents, such as a digital asset clause or a power of attorney for digital assets, and advise on tax implications and the latest legal frameworks. However, they cannot store your private keys or seed phrases, which remain your responsibility to secure and provide instructions for.

How much crypto is considered "a lot" for estate planning purposes?

There's no specific monetary threshold. Even small amounts of crypto can become valuable over time, and the principle of securing access remains the same. If you own any cryptocurrency or NFTs that you would want your heirs to receive, it's worth including them in your estate plan. For significant holdings (e.g., over $10,000 or any amount that constitutes a meaningful portion of your wealth), robust planning is essential due to potential tax implications and the complexity of recovery.

Is a password manager enough to secure my digital assets for my heirs?

A password manager is an excellent tool for securing your login credentials for centralized exchanges and other online accounts. However, it is not sufficient for decentralized assets. For self-custodied cryptocurrencies and NFTs, you need to secure the seed phrases or private keys themselves, which are typically not stored in a password manager. You would need to provide instructions on how to access your password manager and then how to find the separate, securely stored seed phrases.

What is a "dead man's switch" for crypto?

A "dead man's switch" is a mechanism that automatically releases information or assets to designated beneficiaries if the owner becomes incapacitated or dies. In the context of crypto, this could be a service that sends your private keys or seed phrase instructions to your heirs after a period of inactivity or upon receiving a verified death certificate. While innovative, these services require a high degree of trust in the provider and careful consideration of security and potential vulnerabilities.

Should I tell my beneficiaries my private keys directly?

Generally, no. Sharing your private keys or seed phrases directly with beneficiaries while you are alive creates a significant security risk, as they could accidentally or intentionally compromise your assets. Instead, provide clear, secure instructions within your digital estate plan on how they can access these keys after your death. This might involve a multi-signature wallet, a trusted third-party service, or a securely stored physical document that they are instructed to retrieve.

Are NFTs treated the same as cryptocurrency for estate planning?

For estate planning purposes, NFTs are generally treated similarly to other digital assets or property. Like cryptocurrencies, access to NFTs relies on private keys stored in a wallet. Therefore, the same principles of inventory, secure key storage, and clear instructions apply. Their value is included in your taxable estate, and their transfer to heirs can incur capital gains tax upon sale, similar to other forms of digital property.

Secure Crypto & NFT for Heirs: Digital Asset Recovery | One…