Cryptocurrency and other digital holdings need both a legal inheritance plan and a private access arrangement. A will can direct who receives an asset, but sensitive account credentials and wallet recovery phrases should be kept outside it. In NSW, a will becomes publicly accessible after admission to probate, while inspection and access rules vary between jurisdictions. This article explains how to coordinate executor authority, custody arrangements and secure recovery information for an Australian estate.
Pass on cryptocurrency by coordinating a valid will with a separate private inventory and a secure recovery arrangement. The will should deal with inheritance and executor authority. The inventory identifies holdings and custody. Recovery secrets belong in appropriately protected arrangements outside the will. For exchange accounts, the executor should use the provider's deceased-estate process rather than impersonating the account holder.
Digital Legacy VaultStart with the asset, not the password
A cryptocurrency balance, an exchange account, a hardware wallet and a recovery phrase are different things. A hardware wallet helps control cryptographic keys; it is not a physical container holding coins. A recovery phrase can restore control of associated wallets, while the legal ownership of the assets depends on the underlying circumstances.
This matters if crypto was acquired through a company, trust, partnership or another person's arrangement. Technical access is not proof that the whole balance belongs to the deceased's estate. Identify the owner before making a gift or treating the holding as available to beneficiaries.
The South Australian Law Handbook's cryptocurrency explanation addresses cryptocurrency within estate administration and the importance of access and tax records. A practical digital assets in your will review should establish both what the estate owns and how an authorised person can deal with it.
Classify each holding by custody
An exchange may hold assets through an account that has its own identification and estate procedures. In self-custody, the private keys and recovery arrangements are central. A crypto-linked investment held through a broker may instead be a security or fund interest administered through the broker's estate process.
Do not use one instruction for all three. Write the provider, product, ownership capacity and recovery route against each entry. If you use several blockchains, identify the network as well as the asset name. Similar token names or symbols can refer to different assets and do not supply a complete transfer instruction.
Keep three connected records with different access levels
Use the will for gifts, appointments and appropriate administration powers. Use a confidential inventory for identifying the holdings and relevant contacts. Use a separately secured recovery arrangement for secrets capable of controlling or moving assets. Connect the records through clear instructions that do not unnecessarily expose sensitive locations.
The will may need to allow an executor to engage technical and tax assistance, deal with changing assets and administer the estate effectively. A solicitor can help where the estate needs bespoke powers, trusts or treatment of particular tokens. Do not insert complicated technical procedures into legal drafting without considering how quickly they may become outdated.
An executor handover pack can explain where the current inventory is held and which professional to contact. It should not become an uncontrolled copy of all the secrets. Give each person the information their role requires and record who is meant to coordinate a recovery.
Why the will is the wrong place for recovery words
Wills can become accessible through court processes and can be copied by people legally entitled to see them. In NSW, the Supreme Court's access policy explains public access once a will has been admitted to probate. That is more precise than saying every Australian will becomes public the instant an application is filed.
A private key or recovery phrase can enable someone to control assets without waiting for an executor's permission. Once a secret has been exposed, labelling it confidential does not restore its security. Keep secrets out of the will, a public inventory, ordinary email attachments and broadly shared family documents.
Write an inventory the executor can understand
Record the asset name, network, exchange or custody provider, relevant account identifier, approximate balance date, ownership capacity and location of supporting records. For a self-custody wallet, identify the device or arrangement sufficiently to distinguish it from other equipment. A drawer containing three similar devices and no explanation is not a usable inheritance plan.
Include related obligations. Crypto pledged as collateral, subject to a loan, held in a pooled arrangement or connected with a business cannot safely be treated as an unencumbered personal balance. Staking and decentralised-finance arrangements may involve additional technical and tax questions. Put those matters on the adviser list rather than concealing them within a single estimated total.
The eSafety Commissioner's digital-legacy information distinguishes assets from online presence and notes that service rights can differ. A digital inheritance planning record should cover the systems supporting the crypto holding, including email, devices and recovery contacts, without assuming that every licence or account can be transferred.
Separate balances from tax history
An account balance shows what exists at a point in time. Tax records explain how the holding was acquired and what happened afterwards. Preserve purchases, swaps, transfers, fees and transaction references, with values in Australian dollars where relevant. Keep the original exports as well as any accountant's summary.
The ATO's crypto record-keeping material identifies records needed for each crypto asset and transaction. A current snapshot alone cannot reconstruct years of acquisition costs. An essential documents checklist can point to the tax archive while keeping it separate from recovery secrets.
PrivacypolicyDesign recovery so it survives both death and ordinary mishaps
Consider loss of a device, damage to a backup, an unavailable trusted person and a change of address. The arrangement should be understandable to the authorised people without depending entirely on your memory. At the same time, it should not give every person who finds a planning note immediate spending control.
Follow the hardware or custody provider's security instructions. Trezor's wallet-backup explanation describes why a backup can restore control and needs protection from both exposure and physical damage. Do not treat a photograph of a seed phrase in a general cloud account as a complete inheritance solution.
Complexity creates its own risk. A carefully designed multi-person or multi-signature arrangement may suit some owners, while an undocumented scheme assembled from internet tips can defeat the intended recovery. Use competent assistance to assess the actual setup. Avoid inventing a homemade method for splitting or encrypting secrets that no authorised person can reliably reconstruct.
Test understanding without exposing live secrets
Ask the intended executor to explain which records they would locate, whom they would contact and what authority would be required. Use a written walkthrough or an appropriate test environment for technical training. Do not circulate live recovery words in a family video call merely to demonstrate that the plan works.
Include the dependency chain. A backup stored in a location that can only be accessed through a locked account may create a circular problem. Identify how an authorised person can obtain the relevant access after death and whether a second lawful route exists if the first person is unavailable.
Good digital legacy security balances discoverability with restraint. The executor needs a workable path, while people with no role in the administration should not receive the means of moving the assets. Review that distinction when adding a new trusted contact or changing a device.
Use exchange estate procedures for custodial accounts
Make a list of each exchange's official support route and the account information needed to identify the holding. Following death, the representative should explain their legal capacity and request the current estate process. Avoid relying on a phone number or recovery offer found in an unsolicited message.
Digital Surge's deceased-estate policy identifies evidence of death, legal authority and identification among its requirements. Kraken's deceased-client process sets out its own document requirements and says it does not currently provide an account-beneficiary nomination feature. These are provider-specific processes, not interchangeable national forms.
Coinbase's Australian user agreement also contains a death-of-account-holder procedure. Its requirements illustrate why knowing an account password is different from having the provider recognise the estate representative. Read the current applicable agreement for the account's jurisdiction and product.
Do not bypass identity or account controls
An executor should not pretend to be the deceased, send a false identity declaration or evade security requirements. Justice Connect's Australian digital-legacy information recommends official deceased-person processes rather than logging in with the deceased's password. Technical ability to enter an account is not a complete legal authorisation.
An ordinary legacy contact settings checklist is useful for supporting email and device accounts, yet it should not imply that a social-media legacy contact controls a crypto exchange. Record the actual powers and procedures for each service.
Give crypto gifts enough flexibility to match your intentions
A gift of a specific quantity of a specific token can behave differently from a share of the residue. Holdings may change through a sale, swap, fork, staking arrangement or new wallet. If the gift depends on an asset you no longer own, the will's wording and applicable law determine the consequences.
Explain the intended outcome to the person drafting or reviewing the will. For example, do you want a beneficiary to receive the crypto still owned at death, a specified amount of value, or a share of the estate that might be met through different assets? Those are separate instructions and should not be left to an executor to guess.
Avoid naming a device as though it alone defines the financial gift. The hardware can be replaced without changing the underlying wallet, and one device can relate to several assets or accounts. Keep technical descriptions in the current private record while the legal document deals appropriately with the intended property.
An informal instruction cannot override the will
A letter of wishes template can record preferences about communication, technical support and personal context. It should be clearly identified as supporting material. A new note in a folder does not necessarily amend a legal gift or authorise a distribution inconsistent with the will.
This boundary also applies to a person described as a digital helper. Their technical skill can support the duly appointed estate representative, while their legal authority depends on the actual appointment or engagement. Describe the role and responsibility instead of assuming a new label creates legal powers.
PlansDeal with valuation and capital gains tax separately
An estate may need a date-of-death valuation for its inventory and accounts. That valuation is not automatically the beneficiary's capital gains tax cost base. For ordinary investment assets acquired after the CGT regime began, the deceased's cost base commonly carries through under the applicable deceased-estate rules, subject to conditions and exceptions.
Division 128 of the Income Tax Assessment Act 1997 sets out the framework for assets devolving to a legal personal representative or passing to a beneficiary. Do not describe every inherited crypto holding as receiving a fresh tax-free market-value starting point.
If the estate sells crypto, a later disposal can have tax consequences. A transfer that qualifies under the deceased-estate rules is different from an ordinary sale or a payment arrangement that does not meet those conditions. Business holdings, foreign beneficiaries and exempt entities can require additional analysis.
Preserve acquisition and transaction evidence for the person who will eventually calculate the tax. The ATO's inherited-asset record guidance explains why the deceased's acquisition and cost information may matter. Provide the beneficiary with the relevant records when the asset is distributed, not simply a transaction hash and a new balance.
Agree the mechanics before a transfer
The executor should establish the lawful distribution, recipient's identity, supported asset and network, receiving arrangements and accounting records before moving funds. A technically successful transfer to the wrong address can still be an administration failure. A correct-looking token symbol is insufficient if the receiving platform does not support the network used.
Use an appropriately competent person for unfamiliar or valuable transfers. Document the decision, approvals, transaction references, fees and the valuation basis. A test transfer may reduce some address errors when suitable, while it does not replace legal authority, security checks or an assessment of the complete transaction.
Protect the estate from recovery scams
Bereavement and unfamiliar technology make a poor combination for hurried decisions. Do not give recovery phrases to someone who approaches the family claiming they must authenticate an inheritance or release frozen crypto. An official-looking logo and a reference to a court file do not establish that the message is genuine.
Scamwatch's money-recovery warning describes offers to recover lost funds, including cryptocurrency. A legitimate estate inquiry should be pursued through independently obtained official contacts. Keep evidence if assets may have been stolen, and obtain legal and technical assistance without assuming a stranger can reverse a blockchain transaction.
Preserve records before closing online accounts after death. Deleting an email inbox, cancelling a phone number or disposing of a device too early can remove evidence and disrupt the official recovery process for other services.
Keep the crypto plan current in Evaheld
Evaheld can support will creation and the surrounding estate record: holdings, contacts, document locations, executor instructions and controlled sharing. Use it to explain the private recovery path while keeping decisions about raw key custody appropriate to the actual security arrangement. Do not assume any platform can restore assets when the necessary recovery material is missing.
Set trusted party access deliberately. A person who needs the inventory may not need every financial record, private family message or recovery secret. Record what they are expected to do and what must await proof of authority or an external provider process.
Include crypto in updating a will after life events. Review after a substantial trade, change of custody, new hardware arrangement, change of beneficiary or departure of the intended technical helper. Update the private inventory promptly; obtain an appropriately executed legal amendment or replacement where the will itself needs changing.
The NSW Law Reform Commission's digital-assets work identifies the interaction of succession, contracts, privacy and access across jurisdictions. A reform proposal is not a present guarantee of access. Keep the plan grounded in current law and the service arrangements that actually apply.
Make the handover workable when a helper is unavailable
A recovery arrangement can depend too heavily on one technically confident friend. If that person dies first, moves overseas or cannot be contacted, the executor still needs a documented route forward. Identify an alternative adviser or custodian and explain what evidence they will need before helping. Do not solve this problem by distributing the same recovery secret to several people without considering how that changes the theft risk.
Consider a holder with an exchange account, a hardware wallet and a small staking position. The private inventory should distinguish the exchange's estate claim from the wallet's recovery process and the staking arrangement's withdrawal conditions. A single instruction to sell all crypto immediately may be impractical if funds are locked, the executor has not established authority or an unexpected tax consequence needs assessment. A properly drafted power and a record of those constraints can give the executor a more workable starting point.
Keep an incident record when the plan is used. Note who accessed each device or record, which transactions were authorised, where estate funds arrived and which documents supported the decision. This helps the executor explain the administration to beneficiaries and professional advisers. Retain necessary evidence after distribution rather than assuming that an empty wallet means every estate and tax obligation has ended.
Crypto inheritance completion checklist
- Identify which holdings belong to you personally and which involve another legal structure.
- Record each asset, network, custody provider, account and supporting evidence.
- Express gifts and executor powers appropriately in a validly executed will.
- Keep private keys and recovery phrases outside the will and general family records.
- Establish a protected recovery path with a backup for unavailable people or damaged equipment.
- Preserve transaction history, Australian-dollar values, fees and acquisition records.
- Document the provider's official estate process for custodial accounts.
- Explain the plan to the appropriate people without distributing live secrets unnecessarily.
- Keep estate valuation, tax cost base and transfer accounting distinct.
- Review custody, recipients and documents whenever the arrangement materially changes.
