Crypto inheritance: how Bitcoin actually gets lost when someone dies
30 July 2026 · Inherit Vault
Crypto is the only major asset class that can be permanently destroyed by forgetting. A bank account with a lost passbook still exists, the bank has it, and an executor with a death certificate can claim it. A self-custody Bitcoin wallet with a lost seed phrase exists only as a number nobody will ever guess. Chainalysis has estimated roughly a fifth of all Bitcoin is lost, and death is one of the reliable ways it happens.
Two very different kinds of crypto
Exchange-held crypto (Coinbase, Kraken, and the like) behaves like a bank account: the exchange controls the keys, operates a bereavement process, and will transfer holdings to the estate against a death certificate and probate documents. Your executor just needs to know the account exists, exchanges don't send paper statements, so an unknown account is an unclaimed one.
Self-custody crypto, hardware wallets, seed phrases, is different in kind. The seed phrase IS the asset. No company can restore it, no court can order it recovered, no bereavement team exists. If your family doesn't have the phrase, the coins are gone; if the wrong person has it, the coins are theirs. Both failure modes are permanent.
What doesn't work
Telling one person verbally (memories fade, people die out of order). A note in a drawer (fire, burglary, house clearance). Storing the seed phrase in a will, wills become public documents after probate. Splitting the phrase in halves between two people (lose either half, lose everything, and you've doubled the failure points, not halved them).
What does work
Treat the seed phrase like the bearer instrument it is. Keep it on paper or steel, in a safe or with your solicitor, separate from the wallet device. Make sure your executor knows it exists and where it is, without knowing what it unlocks being obvious to a casual finder. For larger holdings, a proper multi-signature or guardian-split arrangement (where no single person or place holds enough to lose or steal the whole) is worth the setup effort.
And record the map: which exchanges you use, that a hardware wallet exists, where the recovery materials live. Inherit Vault stores exactly that, encrypted so nobody (including us) can read it, and releases it to your verified executor along with everything else they'll need. For the seed phrase itself, our guardian-split tool can divide it among people you trust so no one of them can act alone, and none of it ever touches our servers unencrypted.
Sorting this out for someone else? Make sure your family never has to.
Most of the time goes on finding out what the person had and who to call. Inherit Vault keeps that list for you: your accounts, pensions and policies, and where your will is kept. Only you can read it. Your executor gets it when it is needed.
Read more
- Where inheritance tax came from: estate duty to today (UK)
- Inheritance tax exemptions: what you can leave completely tax free (UK)
- The 7 year rule on gifts: how taper relief actually works (UK)
- How is cryptocurrency taxed when someone dies? IHT and CGT (UK)
- Farming and inheritance tax: the £2.5m cap from April 2026 (UK)