What Happens to Your Crypto When You Die?

The honest answer is short: if nobody else can reach your keys, nothing happens. The coins do not pass to your family, they do not revert to anyone, and no company can recover them. They simply stay where they are, locked, forever.

That is not a hypothetical. Chainalysis estimated in 2020 that around a fifth of all bitcoin then in existence appeared to be lost or stranded — much of it, presumably, belonging to people who meant to sort this out later.

A general guide as of October 2026, not legal or tax advice. Inheritance law and tax differ by country; for a real estate, talk to a lawyer who understands crypto.

It depends on who holds the keys

On an exchange, crypto behaves much like a bank account. The exchange holds the keys, and it has a bereavement process: your executor contacts it with a death certificate and a grant of probate (or letters of administration, or the local equivalent) and the balance is released to the estate. Slow and paperwork-heavy, but it works — if your family knows which exchange.

In self-custody — a hardware wallet, a phone wallet, a seed phrase — there is no process, because there is nobody to apply to. Whoever can produce the keys controls the funds, and if nobody can, nobody does.

Your heir has three problems, not one

Most plans solve only the last of these, and often badly.

1. Knowing it exists. Families regularly do not know. No statement arrives by post; nothing shows on a bank record.
2. Finding it. Which wallets, which exchanges, where the backups are, what the device PIN is.
3. Opening it. The seed phrase or keys — without which the first two achieve nothing.

The difficulty is the tension inside the third problem. Anything that makes it easy for your family to open after you die tends to make it easy for someone else to open before you do.

What not to do

• Do not put the seed phrase in your will. In many places — England and Wales, most US states — a will becomes a public record once it goes through probate. Anyone could read it.
• Do not give the whole phrase to one person. It concentrates trust in a single relationship, and a single person’s house, phone and memory.
• Do not keep it only in your head. That is the plan with a certain outcome.
• Do not rely only on a device-bound key. Anything that opens solely with your face or fingerprint on your device cannot be opened once you and that device are gone. Excellent for your own daily security; useless as an inheritance plan on its own.

A plan that works

The shape that resolves the tension is a threshold: split access so that nobody can act alone today, but the right people can act together later.

1. Write a letter of instruction. Separate from the will, kept with it. It says what exists (which wallets, which exchanges, roughly what they hold), where the pieces are, and whom to contact — and it contains no secret at all. It is the map, not the key.

2. Split the means of access. Two common ways:

• Split the backup with Shamir’s Secret Sharing so that any two of three (or three of five) shares recover it, and fewer reveal nothing. Put the shares in places with different failure modes — home, a trusted relative in another city, your solicitor. The arithmetic of why this beats cutting the words into pieces is in How to Split a Seed Phrase into 3 Parts.
• Use a multisig wallet where several independent keys each hold a share of spending power. Stronger for large holdings, more work to set up, and each key still needs its own backup.

3. Rehearse it. Walk the person who will do this through a recovery while you are alive — with a test wallet holding a trivial amount. A plan nobody has tried is a plan that fails at the worst moment.

4. Revisit it once a year, and after any move, marriage, divorce or change of wallet.

For the wider comparison of paper, steel, safes, photos and multisig, see Where to Store Your Seed Phrase Safely.

Tax and the law

Tax authorities including HMRC and the IRS treat crypto as property, so it forms part of your estate and may be subject to inheritance or estate tax. Your executor also has to be able to value it and account for it — one more reason the letter of instruction should list what exists. Rules differ by country and change often; take advice from someone who handles estates that include crypto.

Where StegoSafe fits

StegoSafe can hold the backup side of this plan: it encrypts a seed phrase on your device, splits it across several ordinary photos so that any k of n — together with a passphrase — recover it, and needs no account and no server that must still exist in twenty years. That last point matters more for inheritance than for almost anything else.

Choose the mode deliberately, because the strongest one is the wrong one here:

• Use portable password mode. It opens on another device, which is what your family will have. Our pricing page lists it as the mode for long-term recovery and inheritance for exactly this reason.
• Do not use device-bound mode for an inheritance backup. It is bound to your device and your current enrolled Face ID or Touch ID, and it cannot be opened once you and that device are gone.

One arrangement: keep the photo shares at home and with a relative, and give the passphrase, sealed, to your solicitor or executor. A burglar at home finds photos with no passphrase; your relative holds one share; your solicitor holds a passphrase to nothing. Your family, together with the solicitor, holds enough. The mechanics are in Five Photos, Any Three.

Keep the photos as PNG files and move them as files — messengers recompress images and destroy the hidden data.

The short version

1. In self-custody, if nobody can reach the keys, the crypto is gone.
2. Your heir needs to know it exists, where it is, and how to open it.
3. Never the seed phrase in the will — it can become public.
4. Split access so nobody can act alone today and the right people can act together later.
5. Write a letter of instruction with no secrets in it, rehearse the recovery, and revisit it every year.