Cryptocurrency investing has made millionaires in a relatively short amount of time.  If you invested $100 in bitcoin on January 1, 2011, your nominal investment would be worth approximately $4,400,000 today (with this amount changing every minute).

But what happens to that $4,400,000 in “coin” when you pass away?  Technically, cryptocurrency is treated like property, so naturally your Last Will and Testament will decide who inherits your fortune.  If you do not have a will state law will control, which generally means that it goes to your closest heirs.  Ironically, U.S. Internal Revenue Service (IRS) has further labelled cryptocurrency as “property”, rather than “currency”, meaning that your heirs will receive a “step up” in basis when you pass away, which can be huge if you have a highly appreciated asset.


A famous philosophical thought experiment asks, “[i]f a tree falls in a forest and no one is around to hear it, does it make a sound?”  While there is a debate as to the correct answer to that question, there is no debate to the question: “if I lose the ‘keys’ to my cryptocurrency, does it still exist?”  While it would be a stretch to say the digital currency doesn’t exist anymore, it is not a stretch to unequivocally say that without the necessary keys, you cannot recover or spend it.  Which to me would feel the same as it not existing at all!

Although I will not get into the weeds of what cryptocurrencies are and where and how to buy them, for the purpose of this article, it is important to note that in order to hold cryptocurrencies, you need some form of “wallet.”  This is basically a place where you can store, send, and receive digital currency.  This is not a traditional wallet per se, rather this is really just a location that stores public and private keys, which are used to receive or spend your currency.  Put simply, this is a software program that stores your coins.  Private keys are like the pin number to access your bank accounts, and public keys are more like the account bank account number itself.  Unlike a bank pin number, if you lose the private key, you cannot recover it.  A famous example of this is James Howells of Wales who inadvertently threw away a hard drive with 7,500 bitcoin on it (worth around $120,000,000 today).  Without the hard drive, it’s like James never had the bitcoin.  And yes, for you cryptogeniuses out there, the above paragraph was an oversimplified explanation.

So what is the TLDR (too long, didn’t read) version of the above:  IF YOU DO NOT CREATE A PROPER ESTATE PLAN FOR YOUR CRYPTOCURRENCY, YOU MAY LOSE IT ALL.  Lucky for you “cryptomillionaires” out there, here is a list of a few things that you can do:

  1. Create a list of all digital assets that you have, along with all public and private keys, and any exchange recovery codes as well. If you wish to get a free copy of the Hynes Law Group “Cryptocurrency Info Sheet,” please email me at  It goes without saying that this sheet should be kept somewhere that only the loved ones you trust know how to find.  If anyone untrustworthy obtains a copy of this sheet, they can wipe you out in a matter of minutes.
  2. Plan for your digital assets in your Last Will and Testament. It is important to note, however, that your list of currencies should not be incorporated into your Last Will and Testament.  If that happened, your keys would become public knowledge, which is obviously bad.  A less public alternative would be to establish a living trust to hold your digital assets.
  3. Execute a General Durable Power of Attorney with proper language tailored towards cryptocurrency. Please note that even with this document in place, it is extremely important to create a list of digital assets and let your agent under Power of Attorney know where he or she can find it.

It is also important to consider the Prudent Investor Act when looking at the big picture.  Simply put, this Act requires Executors and Trustees to manage assets that they hold in a “prudent” manner.  Without carving out an exception in your estate plan for digital assets, your Executor or Trustee may be forced to sell your cryptocurrencies because of the inherent volatility, which may not be what you want.

It is our goal at Hynes Law Group to make estate planning simple, even when dealing with complex assets.  For readers of our blog posts, we offer a free phone consultation regarding cryptocurrency and estate planning.  To take advantage of this offer, please fill out our “Contact Us” form at and type “Cryptocurrency” or “Estate Planning” in the comments section, or call us at 908-514-8008 and be sure to mention that you read this blog post.


Jesse R. Hynes, Esq.
Hynes Law Group
2 South Avenue East, Suite 200
Cranford, NJ 07016