Estate planning & inheritance: overview
Beginner Intermediate Expert
Not legal, tax or financial adviceThis page is general education. Law and tax rules differ by country, state and personal circumstance and change often. Speak to a qualified, regulated professional before acting.
A perfect backup is worthless to your family if they don't know it exists, can't use it, or have no legal authority to. Inheritance needs two things to line up: practical access to keys and legal title.
New: printable templatesPrint a letter of instruction (no secrets) with a UK or US supplement, a backup inventory and location map, a recovery drill log, a review log and an explain-to-your-executor guide. Country overviews: UK · US · 15 more countries.
How this hub is layeredBeginner: core principles, the letter of instruction and common failure modes. Intermediate: UK and USA compared, wills, trusts and clauses and technical approaches. Expert: the detailed HMRC situs and valuation notes, US step-up in basis and cross-border notes. Not sure where to begin? See routes by reader level.
Country guides
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United Kingdom guide
England & Wales, Scotland and NI compared: which document does what, intestacy, LPAs and deputyship, trusts, IHT on crypto step by step, the probate process, executor duties, how Coinbase, Kraken and Revolut handle a death, Scotland's Trusts and Succession Act 2024 and what is in force, two illustrative scenarios, pitfalls and UK court decisions.
🇺🇸
United States guide
Which document does what, will formalities, RUFADAA and which states have enacted it, how Coinbase, Kraken and Gemini handle a death, small estates and six state small-estate limits, transfer-on-death, Forms 706 and 1041, step-up, a 17-jurisdiction state tax table, community property, two worked scenarios and pitfalls.
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Rest of the world
EU rules plus 15 countries from Ireland to Japan: tax at death, forced heirship, a cross-country comparison and cross-border pitfalls.
Core principles Beginner
- Make sure someone knows crypto exists. Nobody can count lost crypto exactly. In 2017 Chainalysis estimated that 2.78 to 3.79 million bitcoin (17–23% of the coins then in existence) were already lost for good (Fortune, 2017). That is an old estimate, it assumes the earliest coins mined by Bitcoin's creator are lost, and it counts every kind of loss, not only deaths. Your heirs can only look for what they know about.
- Keep secrets out of legal documents. Wills are generally read by many people and, in England & Wales and most US states, become public once admitted to probate.
- Separate "instructions" from "keys". Instructions explain; keys are stored as on the rest of this site.
- Avoid giving any single person — including a lawyer — everything while you are alive.
- Make it executable by a non-expert. Your heir may be grieving and non-technical.
- Review after life events: marriage, divorce, births, deaths, moving country, new wallets.
The letter of instruction Beginner
A plain-language document, separate from your will, that tells your executor what you hold and how to recover it. It should not contain seeds or passphrases. Example structure (fictional):
LETTER OF INSTRUCTION — DIGITAL ASSETS (example template; fictional details)
Prepared by: [Full name] Date: [dd/mm/yyyy] Review by: [date]
1. What exists
- Bitcoin savings in a 2-of-3 multisig wallet, labelled "Family Vault".
- Ethereum in a hardware wallet (Vendor X) with a passphrase.
- Exchange account at [Exchange name] (email: [address]).
2. Where the pieces are (do not combine unless you are the executor)
- Key 1 / Share 1: [Location code L1 — see sealed note with solicitor]
- Key 2 / Share 2: [Location L2]
- Wallet configuration (descriptor): with each key and in envelope "CONFIG".
3. Who can help
- Technical helper I trust: [Name, phone] — they hold NO keys.
- Collaborative custody provider: [Provider name], account email [address].
- Solicitor / attorney: [Firm, contact].
4. How to recover (summary)
- Read the guide at [provider or Seed Phrase Field Guide page]. Do not enter words into
any website. Ignore anyone who contacts you offering "recovery".
5. Wishes
- Distribute according to my will dated [date].
Common failure modes, with real examples Beginner
Each row links to a sourced case file rather than repeating it here.
| Failure | Real example | What prevents it |
|---|---|---|
| Nobody knew the crypto existed, or how to reach it | A UK family gave up on a relative's bitcoin because they lacked the information to access it (case file; BBC) | A letter of instruction and an asset register, with no secrets in either |
| The will predates the crypto | Matthew Mellon's outdated will did not mention XRP worth about $193m; his estate needed years to liquidate it (case file; US guide) | Review the will after buying new kinds of asset; use a general digital-assets clause |
| No cash to pay the tax | The Mellon estate paid about $60m in federal estate tax in late 2020 after a lock-up limited daily sales (case file) | Plan how tax will be paid in pounds or dollars; see paying the tax |
| A single copy, in one place | James Howells' hard drive went to landfill (case file); Clifton Collins' codes were on one sheet hidden in a fishing-rod case (case file) | At least two tested backups in separate places, recorded in the register |
| One person controlled every key | QuadrigaCX: after the founder's death, the shortfall was first blamed on lost keys, though Ontario regulators found it was mainly fraud (OSC report; case file) | Multisig or shares so no single person, alive or dead, is the only way in |
| No plan at all | Mircea Popescu died in 2021; press reports speculated his holdings may never move (case file) | A plan does not mean sharing keys today: see technical approaches |
| Expecting the law to recover keys | The UK's 2025 Act confirms crypto can be property, but it does not give anyone the keys (case file); Tulip Trading's claim against developers was discontinued (case file) | A tested technical recovery path alongside the legal documents |
| Bereaved family targeted by "recovery" offers | The FCA warns about "recovery rooms" that charge upfront fees (FCA; recovery scams) | The letter of instruction says: ignore unsolicited offers, never share the seed |
UK and USA: the key differences Intermediate
The same practical plan (letter of instruction, tested backups, a capable executor) works in both countries. The legal and tax wrapper differs. This table summarises points covered in detail, with sources, on the UK and US guides; figures as at October 2026.
| Topic | 🇬🇧 United Kingdom | 🇺🇸 United States |
|---|---|---|
| Is crypto property? | Yes. Confirmed by the Property (Digital Assets etc) Act 2025 (England & Wales, NI) and the Digital Assets (Scotland) Act 2026 | Property for federal tax (IRS); access to online accounts by fiduciaries is governed mainly by state versions of RUFADAA |
| Tax at death | Inheritance Tax at 40% above the £325,000 nil-rate band (GOV.UK; thresholds). The residence nil-rate band applies only to a home | Federal estate tax at a top rate of 40% above a $15 million basic exclusion for 2026 deaths (Form 706 instructions). Twelve states and DC have an estate tax and five an inheritance tax (Tax Foundation) |
| Spouses | Transfers to a spouse or civil partner are generally exempt; unused bands can pass to the survivor (UK guide) | Portability of the unused exclusion if a timely Form 706 is filed (US guide); community property rules in some states (US guide) |
| Gains on inherited crypto | No CGT on death; heirs take the date-of-death market value as their cost (TCGA 1992 s.62) | Step-up in basis to date-of-death value (IRS; IRC §1014). Lifetime gifts carry over the donor's basis |
| Paying the tax | Due in pounds, often before the executor has authority to sell (UK guide) | Payable in dollars; the IRS says digital assets are not accepted as payment (Form 706 instructions) |
| Telling the tax authority about crypto | HMRC asks executors to confirm on form IHT400 whether cryptoassets are held (HMRC newsletter, February 2026) | Form 1040 and Form 1041 (for estates and trusts) ask the digital asset question (IRS) |
| Authority to act | Probate in England & Wales and NI; confirmation in Scotland (GOV.UK; mygov.scot) | Letters testamentary from a state probate court; a successor trustee of a funded revocable living trust may act without them (US guide) |
| Incapacity | Lasting power of attorney in England & Wales (GOV.UK); continuing (Scotland) or enduring (NI) powers | Durable financial power of attorney with express digital-asset authority (US guide) |
| Privacy of the will | English and Welsh wills become public once probate is granted (UK guide; which document does what) | Probate filings are usually public; trust terms generally private (US guide; which document does what) |
| Lost or stolen crypto (tax) | Losing a key is not a disposal; a negligible value claim may be possible if there is no prospect of recovery (CRYPTO22400) | Personal theft losses are limited to declared disasters, now permanently; some scam losses in profit-seeking transactions may be deductible (US guide) |
Living or holding assets in more than one country? Read what differs between countries and moving between the UK and US.
Wills, trusts and digital-asset clauses Intermediate
- Name crypto in your will (by category, not by key) and give your executor express power to access, manage and sell digital assets and to engage technical experts.
- Executor choice: someone trustworthy and organised; consider a co-executor or professional with crypto experience.
- Trusts can hold crypto with clear legal title, avoid some probate delays and allow professional trustees; collaborative custody providers can sometimes set vaults in a trust's name.
- Incapacity: powers of attorney need equivalent practical instructions.
Technical approaches to inheritance Intermediate
| Approach | How it works | Pros | Cons / pitfalls |
|---|---|---|---|
| Letter + backups as normal | Executor follows instructions to collect backups | Simple, free | Single-sig: whoever finds the backup first can take funds |
| Sealed envelope with solicitor | Solicitor holds part of the puzzle (e.g. passphrase or location key) | Formal, durable | Must not be the whole secret; firm may close |
| SLIP-39 shares with family/professional | e.g. 2-of-3: you, relative, solicitor | No single holder can steal | Relative + solicitor could collude; heirs must handle Shamir restore |
| Multisig with heir key | Heir or adviser holds one key of 2-of-3 | Robust; heirs can practise | Needs descriptor and coordination |
| Collaborative custody inheritance | Provider co-signs after a verification or waiting period | Guided for non-technical heirs | Fees; reliance on provider |
| Timelocked recovery keys (Miniscript) | Heir key becomes valid after X months of inactivity | No third party | You must "refresh" coins before the timelock expires; expert setup |
| "Dead man's switch" email services | Message sent if you stop checking in | Automated | Never send seeds this way — digital, third-party, can fire early |
Lawful services and professionals Intermediate
Examples we have verified exist (October 2026). Neutral listing, not endorsements:
- Collaborative custody with inheritance: Casa, Unchained, Nunchuk, Bitkey.
- Accounts, not keys: Apple Legacy Contact, Google Inactive Account Manager, password-manager emergency access and exchange bereavement processes help executors reach email, cloud and exchange accounts; none of them can open a self-custody wallet. See the Digital legacy & account access listings.
- Self-managed inheritance tools: Liana, Bitcoin Keeper, Vault12.
- Professional bodies: STEP (worldwide), Law Society Find a Solicitor, Law Society of Scotland, ACTEC (US).
- Free planning resources: Unchained Inheritance Protocol; HMRC's executor checklist for cryptoassets (CRYPTO25000).
Beware "recovery" scams after a deathFraudsters target bereaved families with offers to "recover" crypto for an upfront fee or the seed phrase. Legitimate professionals never need the seed to give advice.
Why this matters: real cases
The collapse of Canadian exchange QuadrigaCX after its founder's death in 2018 was initially blamed on lost keys; Ontario regulators later found the shortfall was largely due to fraud and misuse of client funds (OSC report). It remains a cautionary tale about single-person key control. Individual stories of locked fortunes, such as the IronKey drive with two password guesses left (NYT), show what happens when access depends on one memory. In the US, banking heir Matthew Mellon died in 2018 with about $193m of XRP that his outdated will did not mention; his estate spent almost three years liquidating it to pay tax and debts (Daily Dot; our summary). More in Case files and the failure-modes table above.
Routes by reader level
Beginner: get the basics in place
- Core principles
- Letter of instruction template
- Starter register
- Your country's "at a glance": UK · US · world
Intermediate: make it work legally
- UK and USA compared
- Tax: UK IHT · US estate tax
- Incapacity: UK LPAs (and deputyship) · US durable POA
- Tax records and testing cadence
Expert: design and stress-test
- Technical approaches, including timelocks
- HMRC on situs and valuation · US step-up
- Cross-border notes
- Descriptor records for multisig heirs
Primary sources for this page
- UK: Property (Digital Assets etc) Act 2025 · Digital Assets (Scotland) Act 2026 · GOV.UK Inheritance Tax · IHT thresholds · TCGA 1992 s.62 · HMRC trusts and estates newsletter, Feb 2026 · CRYPTO25000 · Applying for probate · Confirmation (Scotland) · Power of attorney
- US: IRS digital assets · Instructions for Form 706 · IRS gifts and inheritances FAQ · RUFADAA (Uniform Law Commission) · Tax Foundation state estate taxes
- Cases and warnings: OSC QuadrigaCX report · BBC News · FCA recovery room scams · more in Case files
Educational information only, not legal, tax or financial advice.
Last reviewed: · Educational information only — verify current details with official sources.