CRYPTO TAX & REGULATIONS

Estate Planning for Crypto: Ensuring Your Assets Are Passed On

Most crypto investors spend considerable time thinking about how to grow their assets and protect them from external threats. Very few spend any time thinking about what happens to those assets when they’re no longer around. It’s an uncomfortable topic, but it’s one of the most important planning decisions a serious crypto investor can make.

Unlike a bank account, a share portfolio, or a property title, cryptocurrency has no institution behind it. There is no next-of-kin process that unlocks a wallet. There is no probate authority that can retrieve funds from a blockchain. If your loved ones don’t have the right information and access to the right keys at the right time, your crypto doesn’t transfer to them. It sits permanently on the blockchain, visible to everyone and accessible to no one.

This resource covers exactly how to approach estate planning for crypto in Australia, practically and clearly.

Why Crypto Estate Planning Is Uniquely Challenging

Traditional estate planning works within a framework of institutions. Banks, share registries, and property titles all have established processes for transferring ownership upon death. Executors, solicitors, and courts have well-defined roles in facilitating these transfers. The assets themselves exist within systems that recognise legal authority.

Crypto exists outside that framework. The blockchain doesn’t recognise a will, a court order, or a death certificate. It recognises only one thing: the private key that controls a wallet address. Whoever holds the private key or the seed phrase that generates it has full, unrestricted access to the assets inside. No one else does.

This creates two distinct challenges that don’t exist with traditional assets. First, your beneficiaries need to know that the crypto exists. Second, they need the specific technical information to access it, primarily your seed phrase or private keys, as well as instructions for how to use them. Without both, the assets are permanently inaccessible.

Step 1: Create a Complete Crypto Asset Inventory

The starting point for any crypto estate plan is a comprehensive inventory of your crypto assets. Your beneficiaries and executor cannot manage or transfer assets they don’t know exist.

Your inventory should include every exchange account you hold, identified by platform name and the email address associated with it. It should list every self-custody wallet you control, including the wallet type, whether it’s a hardware wallet like a Ledger, Trezor, Coldcard, SafePal, or Tangem, or a software wallet, and the assets held within each. Include any DeFi positions, staking arrangements, or assets deployed in protocols that would not be immediately visible to someone simply checking a wallet address.

This inventory does not need to include your seed phrases or private keys directly. It is a reference document that tells your beneficiaries what exists and where to look. The access credentials are handled separately, as covered below.

Keep this inventory updated as your holdings change, and store it securely alongside your other important documents.

Step 2: Prepare Clear Access Instructions

Knowing that crypto exists is only half the equation. Your beneficiaries also need to know how to access it. For most people receiving an inheritance of crypto, this will be entirely unfamiliar territory. Clear, step-by-step instructions are not optional; they are essential.

Your access instructions should cover how to locate and use each hardware wallet device, how to use a seed phrase to restore a wallet on a new device, how to access each exchange account, and how to transfer assets to a wallet or exchange they control. Include references to trusted resources they can use to educate themselves, including the Cryptopedia, as a starting point for understanding the basics of cryptocurrency and how to safely send and receive crypto.

Write these instructions for someone with no crypto knowledge. Use plain language, avoid jargon, and provide enough detail that a complete beginner can follow them without needing external help. Our Cryptopedia resource on what is a cryptocurrency wallet is a useful starting reference to include for beneficiaries who are new to the space.

Step 3: Securely Communicate Your Seed Phrases

This is the most sensitive and most critical step in crypto estate planning, and it requires balancing two competing concerns: your beneficiaries need access to your seed phrases after your passing, but premature access to those seed phrases before that point represents a complete security compromise.

Several approaches exist for managing this balance, each with different tradeoffs.

Sealed envelope with a solicitor. Write your seed phrases and access instructions into a sealed envelope and lodge it with your solicitor as part of your estate documents. Instruct the solicitor that the envelope is to be opened only upon your death and provided to your nominated executor. This approach is straightforward and legally supported, but it places significant trust in a single third party and requires your solicitor to understand the sensitivity of the contents.

Safety deposit box with nominated access. Store your seed phrase backups and access instructions in a bank safety deposit box and nominate a trusted person to have access, with instructions that this access is to be exercised only upon your passing. Include a letter explaining what the contents are and how to use them.

Shamir’s Secret Sharing. As covered in our advanced seed phrase storage guide, Shamir’s Secret Sharing splits your seed phrase into multiple shares, where a defined minimum number of shares are required to reconstruct the full phrase. You can distribute shares among trusted family members, your solicitor, and a safety deposit box, with instructions that the shares are to be combined only after your passing. This approach is technically sophisticated but provides both strong security during your lifetime and reliable access for beneficiaries after your passing.

BIP39 Passphrase separation. If you use a BIP39 passphrase on your hardware wallet, your seed phrase and passphrase can be stored with different trusted parties, neither of whom can access your wallet independently. Both parties must cooperate to reconstruct access, which provides a degree of protection against unilateral premature access while still enabling recovery by your estate.

Whatever approach you choose, document it clearly in your estate planning instructions so your executor knows exactly what exists, where it is, and how the pieces fit together.

Step 4: Include Crypto in Your Will

Your will is the legal document that governs how your assets are distributed after your death. Crypto assets should be explicitly included in your will, with clear instructions about who receives them and in what proportions.

In Australia, crypto is treated as a CGT asset by the ATO and is subject to the same succession laws as other forms of property. Including it in your will ensures that your wishes are legally documented and that your executor has the authority to manage and transfer those assets on behalf of your estate.

Work with a solicitor experienced in both estate planning and digital assets when drafting or updating your will to include crypto. The intersection of crypto and estate law is a developing area, and a solicitor with relevant experience will be better placed to structure your will in a way that is both legally sound and practically executable. Our resources on cryptocurrency tax Australia, capital gains tax for cryptocurrency in Australia, and ATO crypto rules Australia provide important context on the tax implications your estate may face when crypto assets are transferred or liquidated as part of the estate settlement process.

Your will should reference the existence of your crypto asset inventory and access instructions without including the seed phrases or private keys directly. Wills can become public documents through the probate process, and any seed phrase included in a public document is immediately compromised.

Step 5: Educate Your Executor and Beneficiaries

The most thorough estate plan in the world is undermined if the people responsible for executing it don’t understand what they’re dealing with. Your executor and primary beneficiaries should have at least a basic understanding of what crypto is, why it requires special handling, and what steps are involved in accessing and transferring it.

This doesn’t mean they need to become crypto investors. It means they need enough knowledge to follow your instructions, identify reputable resources for guidance, and avoid the scams that specifically target people who have recently inherited crypto and are visibly unfamiliar with the space.

People who inherit crypto and are clearly inexperienced are active targets for social engineering and phishing. Awareness of this risk is the most important thing your beneficiaries need before they interact with any crypto-related platform or service.

Directing them to the Cryptopedia as a starting point, and specifically to resources covering what is cryptocurrency, how to purchase cryptocurrency, private keys, and two-factor authentication, gives them a foundation to work from without needing to search for information themselves.

Exchange Accounts: A Different Process

For crypto held on centralised exchanges like CoinSpot, Swyftx, Binance, Kraken, or Independent Reserve, the estate transfer process is different from self-custody wallets. Because the exchange holds custody of the assets, your estate will need to contact the exchange directly, provide proof of death and legal authority, and follow the platform’s specific estate claim process.

This process varies by exchange and can take time. Some platforms have well-defined estate transfer procedures; others are less clear. As part of your estate plan, research the estate claim process for each exchange you use and include that information in your access instructions so your executor knows what steps to take and what documentation will likely be required.

This is also one of the stronger arguments for keeping the bulk of your long-term holdings in self-custody rather than on exchanges, as covered in our resource on the risks of keeping crypto on an exchange. Self-custody assets with well-documented access instructions are significantly easier for an estate to manage than assets locked behind a corporate custody process.

Tax Implications for Your Estate

When crypto assets are transferred as part of an estate in Australia, there are tax implications worth understanding and planning for.

Under current ATO guidance, the transfer of crypto assets from a deceased estate to a beneficiary is generally not a CGT event in itself. However, when the beneficiary subsequently sells or disposes of those assets, CGT applies, and the cost base is typically the value of the assets at the date of the original owner’s death.

The ATO treats crypto as property, and the same rules that apply to other CGT assets in an estate context broadly apply to crypto. Your estate may also face CGT obligations if exchange accounts are liquidated as part of settling the estate rather than transferred directly.

Working with a tax professional who understands crypto is important here, as the specifics depend on the nature of your holdings, how they’re structured, and how your estate is settled. Our resources on ATO crypto reporting and capital gains tax for cryptocurrency in Australia provide a useful foundation for understanding the broader tax framework your estate will operate within.

Key Takeaways

Crypto estate planning requires deliberate, proactive action because the blockchain recognises only keys, not legal authority. Create a complete inventory of your crypto assets, prepare clear access instructions written for a non-technical audience, store your seed phrases using a method that balances lifetime security with post-death accessibility, include crypto explicitly in your will, and educate your executor and beneficiaries enough to execute your plan safely.

The effort required to put a solid crypto estate plan in place is modest compared to the value it protects and the difficulty it prevents. Don’t leave it until later. It is one of those planning decisions that only matters when it’s too late to make it.

For investors managing significant crypto holdings who want personalised guidance on security, custody, and planning frameworks, our Black Emerald and Obsidian Tier Members receive dedicated specialist support covering every dimension of responsible crypto ownership, including custody architecture and estate considerations. For everyday investors building strong foundations from the ground up, our Runite Tier Membership provides the education and step-by-step guidance to approach crypto ownership responsibly at every stage.

Find out more at shepleycapital.com/membership.

WRITTEN & REVIEWED BY Chris Shepley

UPDATED: MARCH 2026