The Key Difference Between Owning Crypto and Being Able to Transfer It After Death

By William Burns Jr.

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News

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Last Modified on Oct 27, 2026

A will can name who receives your cryptocurrency, but it cannot hand your family a password or rebuild a lost seed phrase.

Legal title and technical access are separate, so an executor can hold full court authority over an estate while a self-custody wallet stays locked.

To transfer crypto after death, an estate plan needs two parts. The legal documents direct where the assets go, and a secured access plan tells the right person how to reach them.

When one part is missing, a valuable asset can pass to an heir on paper and stay out of reach in practice.

Burns Thomas, LLC helps Connecticut families review both parts together. We look at how each wallet and account is held and what your executor would need to do.

Key Takeaways

• A will decides who inherits your cryptocurrency, but it does not provide the private key needed to move assets out of a self-custody wallet.
• Exchange accounts and self-custody wallets need different plans, because an exchange has a claims process and a hardware wallet does not.
• A seed phrase belongs outside your will, since a will can become part of the public probate record.
• Heirs generally receive a tax basis tied to the date-of-death value, and Connecticut’s 2026 estate tax exemption is $15 million.
• Your executor or trustee should be able to follow your access plan without guessing.

Burns Thomas, LLC can review how your wallets and exchange accounts are held and map out what your executor would need on the first day.

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Start With the Question Your Estate Plan Has to Answer

The first question after a crypto owner dies is where the cryptocurrency is held and who controls access to it.

The Internal Revenue Service (IRS) treats digital assets as property, so cryptocurrency can be part of an estate and pass under a will.

The blockchain does not recognize a will or a probate appointment, though. It responds to credentials, and whoever holds them can move the asset.

A beneficiary can therefore hold a valid legal right to Bitcoin and still be unable to touch it, which is why the type of custody comes first.

Where Is the Cryptocurrency Held?

Cryptocurrency is held either by a custodial exchange or by the owner in a self-custody wallet, and each one reaches your heirs by a different route.

Cryptocurrency held through an exchange

A custodial exchange controls the private keys and maintains the account, so it has a process for deceased account holders.

Coinbase’s help center, for example, lists a death certificate, probate documents, photo identification, and a signed letter of instruction. Your plan should name the exchange and the account and tell your executor where the login details and supporting records are kept.

Cryptocurrency held in a self-custody wallet

With self-custody, the owner controls the private keys and no company holds the assets. A hardware wallet may protect those keys behind a PIN, and the seed phrase can restore the wallet if the device is lost, damaged, or reset.

Some hardware wallets reset themselves after a small number of wrong PIN attempts, which makes guessing risky.

A probate court can establish who has authority to administer the estate, but it cannot recreate a missing seed phrase.

Under the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act, a fiduciary generally may access a decedent’s devices and the digital assets stored on them, but the Act gives a fiduciary no greater rights than the owner held, so it cannot recover a seed phrase that nobody can find.

The Federal Trade Commission (FTC) warns against paying anyone who contacts you offering to recover money lost to crypto fraud, and we would treat an unsolicited offer to unlock a wallet with the same caution. A written record of which wallet holds what gives your executor a safer starting point.

Why the Seed Phrase Should Be Kept Out of the Will

A seed phrase should stay out of your will.

A will filed in a Connecticut Probate Court becomes part of the court’s records, and under the Probate Court Rules of Procedure members of the public may generally view and obtain copies of those records.

Anyone who reads a seed phrase can use it to move the assets, so the credentials should never appear in a document that enters a court file.

Your will can name the beneficiary and the executor, while a separate secured record explains where the wallet information is stored and how the fiduciary reaches it.

The right security method depends on the assets and your family, and we can help you choose one.

Build a Crypto Inventory Before You Need It

An inventory gives your executor a map of your digital assets and of where the access information is stored.

• Exchange accounts and the platforms that hold them.
• Hardware and other self-custody wallets, plus the devices used to reach them.
• The location of each secured seed phrase or recovery record, without the phrase itself.
• Cryptocurrency held in an IRA, a business, or a trust.
• The location of your written instructions for the executor.

Update the inventory whenever you open or close an account, move funds, replace a device, or change your executor.

Should a Trust Be Part of a Connecticut Crypto Plan?

A revocable living trust can help, although it does not solve the private key problem.

Property held in a trust generally passes outside probate, and the Connecticut Probate Courts’ estate guide states that an estate inventory should not include it.

A successor trustee who cannot locate or open a self-custody wallet faces the same locked device an executor would. Whether cryptocurrency should move into a trust depends on how each exchange and wallet works, so we review those details first.

Crypto held inside an IRA follows the beneficiary designation on the account rather than your will, so that form needs to be coordinated with the custodian. An attorney who plans how to transfer crypto after death treats the trust, will, beneficiary forms, and wallet inventory as one plan.

Burns Thomas, LLC works with families in New Haven and Fairfield Counties to match each trust, will, and beneficiary form to the wallets they hold.

The Person You Choose Matters

The right executor or trustee for a crypto estate is someone who can follow written instructions with care.

Christine Thomas helps clients choose executors, trustees, and guardians, and with cryptocurrency that choice includes a practical test, which is whether the person can work from wallet instructions without rushing.

A fiduciary may need to find accounts, preserve devices, deal with exchanges, and document asset values, and a responsible person who has never used a hardware wallet needs clear directions. Some families name one person as executor and a second trusted person to help with the technical side.

Frequently Asked Questions

How long do I have to file a will after someone dies in Connecticut?

Generally 30 days. Connecticut law gives anyone holding the original will 30 days to deliver it to the named executor or the Probate Court, and a named executor must apply for probate within 30 days of the death. Locate the original early, because formal administration starts with that filing.

Who needs to know that I own cryptocurrency?

Your executor, plus one backup person. Form 1040 has carried a digital asset question on its first page since 2020, according to the IRS Taxpayer Advocate Service, so your tax preparer may hold records that point to accounts. Treat those records as a supplement to your inventory, not a replacement for it.

Can I leave cryptocurrency directly to my child?

You can, but a minor generally cannot manage an exchange account or wallet independently. Connecticut’s age of majority is 18, and a trust can set a later age for distribution. We can build a trust around the child’s age and the type of asset.

What should an executor do first when a cryptocurrency owner dies?

Secure the devices, records, and written wallet information, and avoid guessing at PINs. The Connecticut Probate Courts issue a Fiduciary’s Probate Certificate after appointing an executor, and exchanges such as Coinbase ask for probate documents before releasing an account. Then compare the estate’s records against the inventory before anyone moves an asset.

Burns Thomas, LLC: Your Estate Planning Law Firm

A wallet inventory is where a crypto estate plan should begin, and even a rough list written on one page is enough to start.

We can compare it against your will, trust, and beneficiary forms to find gaps between who inherits an asset and who can open it, and those gaps can sit in small places, such as an exchange account nobody listed or an old retirement beneficiary form.

Contact our firm today to go through your wallets, exchanges, and existing documents, and to learn what to update while you can still fix it.