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18 December 2018 0 Comments
Posted in Opinion, Private Client, Private Wealth

What to do if you’re an executor of an estate involving cryptocurrencies…

Posted by , Senior Associate
Contributing authors: Hilesh Chavda, Hannah Welbourn, Bridget Maier and Abby Spittle

As people look for alternative ways to invest their money there are increasing numbers of estates which include digital currencies. However there are several issues that can arise, which can make dealing with their administration complex, time consuming and in some cases can mean that the asset is lost in its entirety. 

cryptocurrency

We encourage clients to start thinking about their ‘digital footprint’ or ‘digital legacy’ early.  What do you have?  What are the logins and passwords?  Who is going to deal with these things after you die? How are you going to keep this information up-to-date? Do you know the terms and conditions agreed to when creating online accounts?

Preparation is key to cryptocurrencies in wills

We strongly encourage people to maintain a record of their private keys, Q-Codes and other passwords which may be accessed by their personal representatives after their death. Authority must be given for the relevant persons to use the private key, otherwise they may be committing a criminal offence and breaching a service provider’s terms and conditions.


You may also like: What to do if you think your spouse is hiding cryptocurriencies from you.


We have precedents to appoint a Digital Executor which is used in your Will as part of our estate planning review.  That nominated person has responsibility for the administration and distribution of your Digital Assets.  It can be more than one person.

We have also designed Life Safe, our secure portal to help you store all your legal documents and vital information to pass on after you die. Saving you time and providing a place that your loved ones can access in the event of any issues.

So what do you do if you are an executor with digital currencies in the estate?

Cryptocurrencies are bought and sold via digital exchanges, of which there are many. There are two types of cryptocurrencies you can own and how these are sold depends on which is owned.

Type 1:

This is said to be similar to owning shares in a company; you are potentially committed to one digital exchange therefore any transactions conducted after death are most likely to be conducted on that same exchange.

The digital exchange is determined upon investment by the deceased and should be clear from paperwork / information found within the deceased’s possession. Executors therefore are most likely not to need to decide which digital exchange to use as this has already been determined by the deceased.

The digital exchanges are strict on money-laundering rules, so when and how these assets may be released is restricted. Often they will require payment to be made to the original form of payment for the investment.

Type 2:

Here, the coin itself is stored online. This is how ownership of your specific coin may be established. Executors/beneficiaries are not bound to one digital exchange and can decide which to use to cash in these assets.

When deciding which digital exchange to use, the two main variables are commission and security. Security is very important with cryptocurrency as if the transaction is not handled carefully enough, the funds may be lost. As the market is unregulated, unlike with a bank, assurances cannot be given and the monies cannot be traced easily. Due consideration of how an exchange works and the commission taken should be done before an exchange is decided upon.

Another point to note is that rates fluctuate significantly within the cryptocurrency world and therefore the digital exchange rate one day will not match the rate and value of the rate the next day.

With all cryptocurrencies, if the key is lost – so is the asset.  There is no way to reconstitute your ownerships rights. So if you have the key; you really do have the secret!

We ensure that storage of key information is securely contained and that your chosen Executor have access when the time comes. We have experience and knowledge of navigating the various exchanges now in existence including two-stage verification and Q-Codes. Please contact one of our team of experts: Mandy Casavant, Hilesh Chavda, Bridget Maier, or Hannah Welbourn for further assistance.

0800 923 2070     Email uspc.enquiries@roydswithyking.com

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