What happens to crypto assets when someone dies?

It’s not unexpected that managing a loved one’s digital assets after their passing is a duty that is becoming more and more prevalent as more and more areas of our life transfer to the digital realm. Due to its rising popularity, cryptocurrency is a digital asset that frequently makes news. Due to cryptocurrency’s early development (in the first decade of the twenty-first century), many people are still unfamiliar with it and may unintentionally skip the estate administration stage of dealing with cryptoassets.

What is cryptocurrency?

Cryptocurrency is digital money which uses encryption techniques to generate currency and verify the transfer of funds. It has been designed to be quicker, cheaper, and more reliable than our regular government-issued money, removing the middleman in all transactions. However, it’s important to note that there is currently no regulation for the ownership or transfer of cryptocurrency in the UK; therefore, many are still doubtful about using it.

There are various forms of cryptocurrency, including the likes of Bitcoin, Ripple, Ethereum, Litecoin, and Dogecoin. As of February 2022, Statista reported that there were 10,397 cryptocurrencies, which highlights the importance of ensuring cryptocurrencies are accounted for during estate planning and estate administration.

Currently, only one country in the world has adopted Bitcoin as an official currency. In September 2021, El Salvador adopted the cryptocurrency as an official currency alongside the US dollar. This was a controversial decision, with the International Monetary Fund (IMF) urging the country to reverse the decision and large-scale protests over the potential “instability and inflation”.

Through specialised exchange platforms like Coinbase, eToro, and Binance, standard GBP currency may be used to buy and sell cryptocurrencies. 
To save your cryptocurrency balance, these exchanges provide built-in virtual wallets that function similarly to conventional “pocket” wallet. 
The ability for ownership to be pseudonymous, or the ability to transmit and receive money without disclosing any personally identifying information, is one of the numerous benefits of cryptocurrencies.

Can you inherit Bitcoin and other cryptocurrencies?

Yes, you can inherit Bitcoin and other cryptocurrencies upon death. A loved one can legally bequeath it to you in their estate plan like any other asset

To transfer cryptocurrency to the next of kin, certain exchanges have policies in place. 
One of the many cryptocurrency trading platforms, Coinbase, has page on its website specifically created to instruct Personal Representatives on how to access the deceased’s cryptocurrency after their demise. 
At this time, they require death certificate, the decedent’s will and/or Grant of Representation, valid government-issued photo ID, and letter signed by the executor(s) or administrator(s) who received the Grant specifying what they want Coinbase to do with the account’s remaining funds.