Read time: ≈ 17-20 min • Last updated: September 14, 2025
Executive summary: My friend's father passed away unexpectedly last year with a substantial crypto portfolio—and nobody could access it. Watching that nightmare unfold made me develop a bulletproof inheritance plan for my own digital assets. This guide shares everything I've learned about crypto inheritance planning in 2025: from simple instructions for beginners to advanced multi-signature setups, legal considerations, and the tools that make this process secure yet accessible for your heirs. Don't let your digital wealth disappear into the blockchain abyss.
Quick note: this article includes affiliate links to security tools I genuinely use. Read the disclosure below for details.
1. My wake-up call: The $250,000 mistake I witnessed
My friend Mark (name changed for privacy) called me last year in a panic. His father had passed away unexpectedly, and they discovered he had been investing in crypto since 2017. They found transaction records suggesting a portfolio worth approximately $250,000 at current prices.
The problem? Nobody could access it.
They searched through his computer, phone, and physical documents but found only fragments of information—an old MetaMask installation, some transaction IDs on an exchange, but no seed phrases, no passwords, no clear instructions.
The painful reality
After months of effort, they recovered only about $40,000 from exchange accounts. The rest—approximately $210,000 in self-custodied assets—appears permanently lost. The seed phrases either never existed, were destroyed, or were stored in a way that made them unrecoverable.
Watching this tragedy unfold was my wake-up call. That week, I sat down with my wife and created our crypto inheritance plan. Here's what I've learned since then.
2. Why crypto inheritance is different from traditional assets
Crypto presents unique challenges for inheritance that don't exist with traditional assets:
No password recovery options
Banks have customer service; crypto has irreversible transactions. If your heirs don't have your keys, they can't call anyone for help.
Pseudonymity works against you
Unlike bank accounts that appear on statements, crypto wallets don't send monthly reports. Your family might not even know what exists.
Technical barrier for non-users
Most people don't understand seed phrases, private keys, or hardware wallets. The learning curve can be overwhelming during grief.
Global and cross-jurisdictional
Your crypto might be on international exchanges or decentralized protocols with unclear legal frameworks for inheritance.
3. Step 1: Create a digital asset inventory
The first step is documenting what you have. This seems obvious, but most people skip it. Here's my template:
Exchange accounts
List every exchange where you have an account, even if empty. Include:
- Exchange name and website
- Email associated with account
- 2FA method (authenticator app, phone number)
- Approximate value (updated quarterly)
Self-custody wallets
For each wallet (hardware, mobile, desktop):
- Wallet type and brand (Ledger, Trezor, MetaMask, etc.)
- Public addresses for major holdings
- Location of seed phrase (but not the phrase itself in this document)
- Cryptocurrencies held
DeFi and staking positions
These are (easiest to forget):
- Protocol names and websites
- Wallet addresses used
- Types of positions (liquidity pools, staked assets, etc.)
- How to claim or unstake
Digital Asset Inventory Checklist
- ✅ List all exchange accounts with emails
- ✅ Document all wallet addresses
- ✅ Note 2FA methods for each service
- ✅ Include instructions for DeFi/staking
- ✅ Update values quarterly
- ✅ Store separately from access information
4. Step 2: Design a secure access plan
This is the most critical step—how your heirs will actually access your assets. I use a layered approach:
Seed phrase storage solutions
Metal backups: I use CryptoTag titanium plates for fire/water resistance. Paper burns; metal endures.
Geographic distribution: Store copies in different locations (home safe, bank vault, trusted relative's house).
Shard solutions: Consider splitting your seed phrase using Shamir's Secret Sharing or similar technology.
Password management
I use 1Password with emergency access setup. My wife can request access if something happens to me.
Hardware wallet inheritance features
Modern Ledger devices have built-in inheritance solutions through their Ledger Recover service (though I prefer self-managed approaches).
5. Step 3: Communicate and educate your heirs
Information without understanding is useless. Here's how I approach this delicate task:
The "fire drill" approach
I conduct annual "fire drills" with my wife where she practices accessing a small test wallet. This builds confidence and reveals knowledge gaps.
Create simple instructions
I maintain a step-by-step guide that assumes zero technical knowledge:
- How to install a wallet app
- How to use a seed phrase
- How to send crypto to an exchange
- Who to contact for help (trusted tech friend)
Professional help access
I've introduced my wife to a crypto-savvy accountant and lawyer who can assist if needed. Paying for professional help is cheaper than losing everything.
6. Step 4: Legal documentation and considerations
The legal landscape for crypto inheritance is still evolving, but here's what I've implemented:
Will and estate documents
My will explicitly mentions digital assets and gives executors authority to access them. Crucially, it doesn't contain sensitive information like passwords or keys.
Letter of instruction
A separate, non-legal document that provides practical guidance on accessing digital assets. This can be updated more frequently than a formal will.
Jurisdictional awareness
Different countries have different rules about digital asset inheritance. I consulted with a lawyer familiar with both crypto and international estate law.
7. Best tools for crypto inheritance in 2025
These are the tools that make inheritance planning manageable:
Hardware wallets with inheritance features
Ledger: Offers Ledger Recover (sharded backup service) and clear inheritance guidance.
Trezor: Advanced features like Shamir Backup for splitting seed phrases.
Password managers with emergency access
1Password: Emergency kit feature allows designated people to request access.
Bitwarden: Open-source alternative with emergency access functionality.
Dedicated inheritance services
New services like Casa and Unchained Capital offer multi-signature inheritance solutions. I'm testing Casa's Gold plan for a portion of my Bitcoin.
| Tool Type | Options | Cost | Best For | My Rating |
|---|---|---|---|---|
| Hardware Wallet | Ledger, Trezor | $79-$299 | Self-custody assets | ★★★★★ |
| Password Manager | 1Password, Bitwarden | $3-5/month | Exchange credentials | ★★★★☆ |
| Inheritance Service | Casa, Unchained | $250-500/year | High-value portfolios | ★★★☆☆ |
| Metal Backup | CryptoTag, Billfodl | $99-199 | Seed phrase protection | ★★★★☆ |
8. Advanced: Multi-signature inheritance setups
For significant holdings, I recommend multi-signature (multisig) wallets. Here's how I've implemented this:
How multisig inheritance works
Instead of one seed phrase, you require multiple signatures (e.g., 2-of-3 or 3-of-5) to access funds. This adds redundancy and security.
My 2-of-3 setup
I use a 2-of-3 multisig where:
- Key 1: In my possession (primary hardware wallet)
- Key 2: With my wife (secondary hardware wallet)
- Key 3: With my brother in another state (backup)
This means any two of us can access the funds if something happens to me, but no single person can compromise the wallet.
Services that simplify multisig
Casa: Offers user-friendly multisig setups with key recovery services.
Unchained Capital: Provides collaborative custody with inheritance planning.
9. Testing your plan: Don't wait for disaster
The only way to know if your plan works is to test it. Here's my testing protocol:
Annual fire drill
Each year, I have my wife practice accessing a small test wallet containing $100 in Bitcoin. She goes through the entire process from finding the instructions to actually sending the Bitcoin to an exchange.
Documentation review
We review all instructions together to identify anything that's unclear or outdated. Technology changes fast—what worked last year might not work today.
Professional consultation
Every two years, I have our estate lawyer review the plan to ensure it still complies with current laws and regulations.
Inheritance Plan Testing Checklist
- ✅ Heir can locate all documentation
- ✅ Heir can access password manager
- ✅ Heir can recover from seed phrase
- ✅ Heir can transfer funds to exchange
- ✅ Instructions are clear and current
- ✅ Legal documents are updated
10. My personal inheritance plan (detailed breakdown)
Here's exactly how I've implemented this for my own family:
Document storage
Digital asset inventory: Encrypted file in 1Password, shared with wife and lawyer
Step-by-step instructions: Printed copy in home safe, digital copy in 1Password
Legal documents: With estate lawyer, copy in bank vault
Key distribution
Primary seed phrase: CryptoTag titanium plate in home safe
Backup seed phrase: Split using Shamir's Secret Sharing, parts with wife and brother
Exchange passwords: In 1Password with emergency access enabled
Multisig setup
I use a 2-of-3 multisig for my primary Bitcoin holding, with keys distributed geographically and stored on different hardware wallet brands for redundancy.
Testing schedule
We conduct full tests annually and quick reviews quarterly when updating portfolio values in the inventory.
11. Conclusion: Start today, sleep better tonight
Crypto inheritance planning isn't the most exciting topic, but it might be the most important. The peace of mind I've gained from having a solid plan is worth far more than the time it took to create it.
Start small if you need to. Even basic documentation is better than nothing. A simple inventory and clear instructions could make the difference between your family accessing your digital wealth or watching it disappear forever.
Remember: this isn't a one-time task. Technology changes, portfolios change, and laws change. Schedule regular reviews to keep your plan current.
Don't let your crypto legacy become another statistic of lost wealth. Take action today—your future self and your loved ones will thank you.
Disclaimer: This article is for informational purposes only and not legal or financial advice. Cryptocurrency investments are volatile and risky. Consult with qualified legal and financial professionals before implementing any inheritance plan. Laws vary by jurisdiction.
Sources & further reading
- Chainalysis 2025 Crypto Loss Report
- Ledger Inheritance Planning Guide
- Casa Multisig Inheritance Documentation
- Shamir's Secret Sharing White Paper
- American Bar Association Digital Assets Guidance
FAQ — quick answers
A: Basic planning can be free (using encrypted documents and clear instructions). More sophisticated setups with hardware wallets ($100-300), metal backups ($100-200), and legal advice ($500-2000) can cost more. Consider this against the value of assets you're protecting—losing $100,000 over saving $500 is poor math.
A: Absolutely not. Wills become public record in many jurisdictions during probate. Instead, reference a separate document or instructions that your executor can access. Never put sensitive information like seed phrases or passwords in a will.
A: If you do nothing else: 1) Create a simple inventory of your crypto assets, 2) Write clear instructions on how to access them, 3) Tell one trusted person where to find this information. Even this basic step puts you ahead of 90% of crypto users.
A: Review your plan at least annually, or whenever: 1) You add significant new assets, 2) You change storage methods, 3) Relevant laws change, 4) Your family situation changes (marriage, children, etc.). Technology evolves quickly—don't let your plan become outdated.
This article is informational only and not legal or financial advice. Consult with qualified legal and financial professionals before implementing any inheritance plan. Laws vary by jurisdiction, and improper planning could result in loss of assets.