Crypto When You Die: Estate, Tax and Access

Crypto passes at death the way other property does, through a will or the intestacy rules, but unlike a bank balance it has no register that tells an executor where it is or how to reach it. Coins on an exchange are claimed through the exchange's own estate process, which needs a death certificate and proof of authority. Coins in a wallet the owner controlled are reachable only with the keys. The tax side is more settled than the access side: in the United States an heir's basis generally resets to the value at death, in Canada the deceased is treated as having sold the property just before death, and in the United Kingdom the personal representatives take the assets at their market value at the date of death.

None of that works unless someone knows the assets exist, where the instructions are, and what the coins were worth on the day, and the published rules for each of those three things are thinner than most people assume. The sources behind the figures are two exchanges' estate pages, the tax authorities of three countries and a public price series. A plan with real value in it belongs with an estate lawyer in the owner's own jurisdiction, and nothing below applies to a specific estate.

Two kinds of holding, two different problems

The first column fits a legal process that already exists. The second does not, and it is where most advice, including the page on recovery phrases and backup design, concentrates. This page covers the estate and tax steps around the keys and leaves their storage design to that guide.

What exchanges ask an estate for

Kraken's support page for deceased client accounts (last updated March 17, 2026) says that Kraken "doesn't currently offer the option to add a beneficiary to an account," and instead has a claims process for families and legal representatives. It lists four documents: a complete colour image of the death certificate ("certificates issued by funeral homes are not accepted"), documentation of the representative's appointment such as probate or letters of administration, a current valid colour copy of the representative's government photo ID, and a signed and dated letter from the representative confirming the death and their role. Kraken may ask for more after the claim is submitted, and the claim is filed through an online form. The page does not say whether the account is frozen, closed or transferred, gives no processing time and mentions no difference by country.

Coinbase publishes a similar process, but its help page blocked fetching during research. Search-result summaries of it say it asks for a death certificate, probate papers such as Letters Testamentary or Letters of Administration, a photo ID for the named person and a signed letter of instructions, that it does not support naming a beneficiary on an individual account, that it freezes the account on receiving proof of death until the funds are moved to an account in the executor's name, and that required documents vary by region. Those details are secondary and should be checked on Coinbase's own page.

Two points follow for planning. With neither exchange does the owner choose the heir on the account itself, so the will, a trust or the intestacy rules decide. And both start with a person who has formal authority, which in most legal systems means a court-issued document, so the time before probate is granted is a period when the account cannot be touched. How long that takes depends on the court, and neither platform says.

What the keys require

For a wallet the heir must hold or reconstruct the keys. Many wallets generate a recovery phrase under the BIP-39 specification, and that standard allows an optional passphrase. It says the seed is derived from the mnemonic sentence, with the string "mnemonic" plus the passphrase used as the salt, and that "if a passphrase is not present, an empty string is used instead." It adds that "every passphrase generates a valid seed" and "only the correct one will make the desired wallet available." That is the reason a recovery phrase alone may open an empty wallet if a passphrase was set: the passphrase is a second secret, and a wrong or missing one produces a different valid wallet and no error.

The table compares common setups against what an heir would face. It is a design comparison from how these mechanisms work and not a product recommendation.

The multisignature section of the recovery guide and the hardware wallet comparison go into backup and device choices.

Where the information goes: will, letter and secret

The pieces of a plan differ in who reads them and when. A will names the executor and says who inherits. It is usually the wrong place for a recovery phrase, because wills are filed in probate and in many places become accessible to others, a point to confirm with a local lawyer. A letter of instruction, kept with the will or with a lawyer, can say that crypto exists, which exchanges hold accounts, what kinds of wallet and devices exist and where the physical items are, without containing the secrets themselves. The secrets belong in a separate protected location with a recovery route that the executor can reach, such as a safe deposit box or a lawyer's custody arrangement, and the design of that route is the part that needs professional advice.

A model letter of instruction

The wording below is a template for the letter described above, written to carry no secret. The brackets are for the owner to fill in, and a lawyer should review the final version.

The last row matters because the period after a death is when scam approaches multiply, and the recovery scams guide describes how those offers work. A letter that names the people authorised to act also gives the executor a way to tell a real adviser from a stranger.

What the heir's tax position is

The valuation date at death is the common thread in all three countries, and the sources use different wording.

United States. IRS Publication 551 (December 2025) says the basis of inherited property is generally either "the FMV of the property at the date of the individual's death" or the value on the alternate valuation date if the personal representative chooses it. The publication text read does not mention digital assets, so the rule is general property law applied to crypto. The IRS says the federal estate tax basic exclusion amount is 15,000,000 dollars for decedents dying in 2026 and 13,990,000 dollars for 2025 (page reviewed July 23, 2026), a threshold that most estates never reach.

Canada. The CRA says a deceased person "is considered to have sold all their property just prior to death," with capital property treated as disposed of at fair market value immediately before death, and the gain or loss reported on Schedule 3 of the final return (page dated January 20, 2026). Property passing to a surviving spouse or common-law partner who was a Canadian resident, or to a qualifying spousal trust, may not produce a gain or loss on the final return if the property is locked in within 36 months of death. The legal representative can elect out of the rollover, property by property.

United Kingdom. HMRC's Capital Gains Manual (CG30730) says assets owned by the deceased are treated as acquired by the personal representatives "at market value at the date of death," and that value is the cost for their later sales. The manual does not mention cryptoassets, and the sources read do not say which price source HMRC expects for them.

A single example with the same invented facts shows how the three differ. Suppose someone dies holding 2 coins that cost 20,000 in their currency and were worth 160,000 at death.

The Canadian half-inclusion rate applied here is the CRA's statement that half of a capital gain is included in income (page dated December 2, 2025). The example ignores tax rates, fees and the question of whether the deceased was carrying on a business, which would change the analysis.

Valuing the coins on one day

Every one of those rules needs a price on a particular date, and crypto has no closing bell. The tax rules read say "date of death" (IRS and HMRC) or "immediately before death" (CRA). None of the pages read says which exchange, which time of day or what method to use for crypto. How much this matters depends on the day.

In the Coin Metrics bitcoin series (PriceUSD, a fixing at 00:00 UTC), the close-to-close move since January 1, 2018 had a median absolute size of 1.39 percent, but 801 of 3,217 days (24.9 percent) moved by more than 3 percent, 341 days (10.6 percent) by more than 5 percent and 62 days (1.9 percent) by more than 10 percent. The extreme case is March 12, 2020: the fixing at the start of that day (the March 11 row) was 7,939.34 dollars, and the fixing at the end (the March 12 row) was 4,959.31 dollars, a difference of 2,980.03 dollars, or 37.5 percent. For someone who died that day, a holding of one bitcoin would be worth either figure depending on the time chosen, and the CRA's wording of immediately before death points to the earlier one.

On an ordinary day the difference is small, but the wise course for an executor is the same either way: record the source, the time and the price used for each holding on the date of death, keep the screenshot or data export, and use a consistent method across assets. The CRA's cryptocurrency guidance says to use a reasonable method of valuation and apply it consistently. The wallet-by-wallet basis guide explains why the original purchase records matter as much as the date-of-death price for the Canadian and UK computations.

A valuation worked on real prices

Take an estate that holds 1.5 bitcoin and 20 ether, and suppose the owner died on November 9, 2022, the day of a sharp market fall. Coin Metrics' daily fixing labelled November 8 is the price at the end of November 8, which is the start of November 9, and the fixing labelled November 9 is the price at the end of that day.

The two conventions put the estate's crypto at 54,418.80 or 45,497.41 dollars, a difference of 8,921.39 dollars, on one day and with no change to what was held. If an heir later sells the coins for 50,000 dollars, the result is a gain of 4,502.59 dollars against the lower value and a loss of 4,418.80 dollars against the higher, so the choice of time can turn a gain into a loss in the heir's records. That is why this page keeps repeating that the source, the time and the method must be written down. The example uses US dollar prices for all three countries, and Canadian and UK estates would convert at their own rates. Nothing in the sources read says which of the two figures is correct for a given tax, and for a Canadian final return the "immediately before death" wording points to the earlier one.

What waiting costs in price terms

Both exchanges require formal authority before an estate can act, and neither publishes a processing time. The wait is a period in which the heirs hold the price risk without the ability to sell. The table shows what waiting looked like for bitcoin over every rolling window of the stated length that started on or after January 1, 2018, using Coin Metrics daily fixings. The window counts are 3,127, 3,037 and 2,852, and neighbouring windows overlap heavily.

These are results of the past price path and say nothing about the next year. They show how large the changes were that an account frozen for a few months could have sat through, in either direction, and they are one reason to keep the paper trail in order so that a claim can move as soon as authority is granted. A fall of more than 30 percent over 180 days occurred in 585 of the 3,037 windows (19.3 percent) and a rise of more than 30 percent in 1,161 (38.2 percent).

What the law adds on digital asset access

The Revised Uniform Fiduciary Access to Digital Assets Act, which many US states have enacted in some form, governs when a fiduciary such as an executor can reach digital assets held by a custodian. Summaries describe a default in which the personal representative can see a catalogue of a person's electronic communications but not the content unless the person allowed it, and say that a custodian's own online tool, where the user names a person, overrides conflicting instructions, including those in a will. Sources disagree on how many states have enacted it, and state versions differ from the uniform text. The Uniform Law Commission page could not be read for the enactment count. The Act's reach is to accounts held with a company, so it is relevant to an exchange account or an email account, and it does not supply the keys to a wallet that no company holds.

Records an executor can use

The tax rules above all start from cost and value, so the useful records are different from the secrets. The CRA's cryptocurrency records page (dated November 10, 2025) lists what a Canadian filer is expected to keep for each transaction: the units and type of crypto-asset, the date and time, the Canadian dollar value at the time, the nature of the transaction and the other party, the addresses of each wallet used, and the opening and closing wallet balance and cost for each year, together with the trade and transfer ledgers from any exchange. It asks that records be kept for at least six years from the end of the last taxation year they relate to, and recommends exporting a history from platforms regularly in case the platform stops operating or access is lost.

An executor who finds those exports can compute the deceased's cost and the value at death without needing a single secret, which is a good reason to keep them separate from the recovery material and to list in the letter of instruction where they are. The heir's own records start at the date-of-death value, and the executor's valuation file is the first document in them.

What no plan on this page covers

Several matters need a lawyer and not an article: jointly held wallets, coins held in a company or trust, beneficiaries in several countries, a will that must be proved in more than one place, and the rules on small estates that skip probate. A plan also has to survive the owner's own change of mind, so it needs a review date. Nothing here says that any particular arrangement is valid in your jurisdiction.

Frequently Asked Questions

What happens to my crypto when I die?

It passes under your will or the intestacy rules like other property. Coins on an exchange are claimed through the exchange's estate process, which for Kraken needs a death certificate, proof of the representative's authority, photo ID and a signed letter. Coins in a wallet you control can only be reached with the keys, which no company can recover.

Can I name a beneficiary on my exchange account?

Kraken says it does not currently offer that. Search summaries say Coinbase does not support it on individual accounts either. In that case the will, a trust or the intestacy rules decide who receives the account. Check the platform's current terms.

Should I put my seed phrase in my will?

The usual caution is not to, because a will is filed in probate and may become accessible to others in many places. A common alternative is a letter of instruction that says where things are and a separate protected store for the secrets. How that store is arranged is a question for an estate lawyer.

Do my heirs pay tax on inherited crypto?

It depends on the country and on what they do next. In the United States the basis generally becomes the value at death, in Canada the deceased is treated as having sold just before death unless a rollover applies, and in the United Kingdom the personal representatives acquire at market value at the date of death. Selling later can produce a gain or loss measured from those values.

What price do I use for the date of death?

The sources read say the market value at the date of death (IRS, HMRC) or fair market value immediately before death (CRA) and give no crypto-specific price source. Record the source, the time and the price, and apply one method to every asset. On volatile days the choice of time can change the value by double digits.

Does the passphrase matter for heirs?

Yes. The BIP-39 standard says only the correct passphrase opens the intended wallet and every other passphrase opens a different valid one. A recovery phrase that is found without the passphrase may open an empty wallet.

What does an executor need to give an exchange?

For Kraken, four documents: a complete colour image of the death certificate (funeral home certificates are not accepted), documentation of appointment such as probate or letters of administration, a current government photo ID for the representative, and a signed and dated letter confirming the death and the representative's role. Kraken may ask for more.

What records help an executor value and report crypto?

For each transaction, the units and type of asset, the date and time, the Canadian dollar value at the time, the nature of the transaction and the other party, the wallet addresses used, and the opening and closing balance and cost for each year, plus exchange trade and transfer ledgers. That list is the CRA's records guidance, and the same facts are what any country's computation starts from.

Sources

CryptosEyes publishes general educational research, not investment, legal, or tax advice. Inheritance, probate and tax rules differ by jurisdiction and by estate; this article does not say that any arrangement is valid or that any person owes or avoids tax. Consult a qualified estate lawyer and tax professional.