Cryptoassets can form part of a New Zealander's estate, but a valid will does not on its own give an executor access to an exchange or a self-custody wallet. The sound approach separates legal entitlement from the technical ability to transfer tokens. Record the assets and intended beneficiaries, keep private keys and seed phrases out of the will itself, plan a secure recovery process and preserve the records needed for tax and administration.
Wills, Powers of Attorney & GuardianshipLegal ownership and access are different questions
A will normally determines who should receive the person's estate property and who administers it. An exchange account may contain digital assets controlled operationally by a provider, while a hardware wallet may require a private key that no company can reset. The law governing ownership, the account agreement and the wallet's cryptographic controls each matter.
Inland Revenue's cryptoassets guidance treats cryptoassets as property for tax purposes, with the actual tax treatment depending on their use and characteristics. An executor should record the holdings and their provenance rather than assume that a wallet is beyond estate administration merely because it has no ordinary bank account number.
Planning for digital assets in your will can identify cryptocurrency, NFTs, exchange accounts, tokenised investments, domain names and online businesses. The legal will should appoint a capable executor and suitable beneficiaries. Separate secure instructions should explain where technical records are located.
Why a seed phrase should never appear in an ordinary will
A recovery phrase or private key can enable anyone who obtains it to move assets irreversibly. Storing that secret in the will may expose it to witnesses, document handlers and eventually people entitled to inspect probate records. A private cryptographic credential should not be used as an ordinary explanatory clause in an instrument that may enter a court process.
New Zealand probate records can be accessible under applicable court rules, and the extent of access depends on the kind of record and circumstances. Do not assume a will is permanently private simply because it is held in a family folder today. The Ministry of Justice's High Court probate guidance provides the starting point for understanding administration.
Use a separate recovery arrangement with minimum necessary access. That might involve controlled offline storage, carefully managed encrypted instructions, or professional custody for a material holding. No one method is foolproof. Test the resilience of the recovery process without placing live secrets into an ordinary shared document.
Exchange custody: the bereavement procedure
When the deceased holds crypto through a centralised exchange, the provider may control the actual wallet keys and require documentation before disclosing or releasing assets. The executor should contact the official bereavement team, identify the registered legal entity and supply a death certificate, proof of authority and other identity evidence the platform lawfully requests.
Do not log in as the deceased merely because a password is available, and do not attempt to reset authentication through a phone number without authority. Such actions may violate terms or compromise an audit trail. Keep correspondence and reference numbers so beneficiaries understand what has occurred.
An executor handover pack should list the exchange, approximate asset types, account identifier, associated email address and location of statements without including passwords. Providers may have different processes where the account is owned by a company or trust.
Self-custody: technical recovery without giving away the keys
With a self-custodied wallet there may be no service provider that can restore a lost key. If the owner dies with the only recovery phrase known to them, their heirs can have legal title to valuable assets but no practical means of accessing them. This is a risk that should be addressed during life rather than assumed curable by a solicitor or software vendor.
Record whether the wallet is controlled by hardware, software, multisignature or an additional passphrase. Note which devices and backups exist and what specialist may assist. Do not test the arrangement by sending seed phrases to a website offering to 'check' whether they work.
A password access after death guide can help distinguish access instructions from actual credentials. digital legacy security principles are especially relevant when even a brief exposure could permit an irreversible transaction.
Wills, Powers of Attorney & GuardianshipPreparing a practical crypto inventory
List each exchange or wallet, blockchain or network, approximate token types, account structure, date last checked and location of transaction histories. Record any staking, lending, bridges, NFTs or other arrangements that may not appear in simple portfolio software. Identify the legal owner, because an address controlled by the deceased might contain company, trust or jointly owned assets.
Keep a clear distinction between account discovery records and credentials. The executor should be able to learn that a Bitcoin wallet exists without finding a readily usable private key in the same folder. A digital asset inventory should be updated when an account is closed or a new wallet is created.
Ask whether the hardware wallet's physical location, the backup process and any multisignature participants have changed. If an adviser holds relevant recovery information, identify their contact details and the exact conditions under which the executor can obtain assistance.
Wills Act 2007 and testamentary instructions
An NZ will must satisfy the Wills Act 2007 execution framework. An online draft can be validly executed when the formal requirements are met; cryptographic signatures on a blockchain do not by themselves replace the statutory will-signing ceremony.
Consider whether to make a specific gift of cryptoassets or leave their value within the residue. Specific gifts can be problematic if coins are sold, transferred to a different wallet or replaced. A residuary clause may be more resilient, but a complex or high-value portfolio warrants legal review.
Do not make a statement that a beneficiary is authorised to breach an exchange's account terms or bypass another person's privacy rights. Executors have legal duties and may need to obtain assistance before realising the assets.
New Zealand tax treatment of cryptocurrency
New Zealand does not levy a general inheritance tax merely because someone receives an estate asset. However, IRD's cryptoassets page explains that trading and other crypto transactions can generate taxable income depending on the facts and purpose. Executors should preserve acquisition dates, cost records, transfers and evidence of transactions before and after death.
Do not conflate the date-of-death asset inventory with a later sale price. Volatility can be substantial. If the executor liquidates tokens, the tax position may depend on the original acquisition, intention, later transactions, residence and whether assets were held as part of a trading activity.
If holdings were part of a business, the executor must also assess debts, customer assets and whether the company or trust was the true owner. A high-value digital estate may justify expert valuation and advice from an NZ accountant familiar with crypto tax.
Avoiding common estate losses
Crypto can be permanently lost through unavailable keys, misplaced hardware or a mistaken transfer to an incompatible network. Theft can occur if an enthusiastic relative photographs a seed phrase, shares an unencrypted file or uses a scam 'wallet recovery' provider. Market losses can occur while the executor is awaiting authority. An executor's priority should be preserving records and lawful control, not speculative trading.
A secure digital inheritance guide can support family planning, but it must not promise key recovery when no recovery material exists. A comparison of estate planning lawyer vs online estate planning tools can help determine the appropriate professional input for substantial holdings.
Keep the original signed will, asset inventory and recovery secrets in appropriately separate places. Give the executor a route to all three without providing unconditional access to every family member.
A three-model recovery comparison
With an exchange, the main risks are provider access policy, death verification, custody and market exposure. With a single-key self-custody wallet, the critical risk is key loss or unauthorised disclosure. With a multisignature arrangement, one person cannot normally transfer funds alone, but several people and devices may need to cooperate. No model eliminates every risk.
Consider how a nominated executor will locate each recovery route, what documents prove authority and who will help with technical execution. If there are beneficiaries in different countries, seek advice before assuming exchange terms or tax rules transfer cleanly across borders.
An approach to family documents cloud storage can help organise non-secret documents. Choose any secret-sharing arrangement only after understanding its threat model, recovery and access safeguards.
Wills, Powers of Attorney & GuardianshipExecutor's action plan after a crypto holder dies
Preserve known devices and paper records, prevent accidental destruction of wallet backups, locate the will and obtain appropriate legal authority. Contact custodial exchanges through official processes. List assets and transaction records, establish ownership and value, consult legal and tax professionals where necessary, and document lawful transfer or realisation.
Do not promise beneficiaries a specific value before the assets have been accessed and accounted for. The final distribution must take into account liabilities, applicable claims and the will's clauses.
Build a recovery map with three different access levels
An executor first needs to discover the asset, then establish legal authority, then arrange technical access. Give each step a separate record. The discovery record can say that a particular wallet exists and where supporting information is held. The authority record identifies the will, executor and any company or trust ownership. The recovery arrangement contains the sensitive material needed by an authorised person or specialist. Combining all three in one family email creates a single point of compromise.
Use document organisation essentials for the non-secret records: wallet names, provider contacts, statements and review dates. Keep recovery material behind narrower controls. People helping with funeral arrangements or ordinary bills rarely need access to a live wallet. Access should follow the task, rather than the closeness of the family relationship.
The government's cryptocurrency security guidance explains why giving away a private key can give away control of the assets. An estate plan must account for that consequence. A person can know where recovery instructions are stored without being able to spend the portfolio while the owner is alive.
Stress-test the plan without exposing live funds
Ask whether the executor can identify each device, recognise a genuine support channel and find a competent specialist. Explain unfamiliar terms in ordinary language. Distinguish a device PIN, an exchange password, an email recovery method, a seed phrase and an additional wallet passphrase. They perform different jobs and losing one may have different consequences. Do not put actual secrets into the explanatory version used for a family discussion.
Test a documented practice process using a separate empty or negligible-value training wallet, under suitable technical supervision. The aim is to discover missing steps without risking the live portfolio. A successful login to a portfolio-tracking app does not prove recovery of the underlying assets. Similarly, possessing a hardware device is not enough if its required PIN or recovery material is unavailable.
An emergency access comparison can help identify which records belong in a password manager and which require a different recovery arrangement. Encryption basics also need a recovery plan: an encrypted file that nobody can unlock after death may protect confidentiality while defeating inheritance entirely. Consider both unauthorised access and permanent loss.
For substantial holdings, get advice on custody, multisignature arrangements and independent keyholders. Do not invent a home-made process by arbitrarily dividing a seed phrase between relatives. Security depends on the actual wallet design and recovery mechanism, not simply on using more envelopes. A specialist should explain how the arrangement survives a missing keyholder, destroyed device or unavailable professional.
Use exchange-specific estate procedures
Coinbase's deceased-account process requests death and authority documents, identification and transfer instructions. Kraken's deceased-client requirements likewise identify documentary steps and allow for further requests. These are examples of why an executor should contact the actual provider rather than assume one universal crypto probate form exists.
Neither example promises automatic acceptance of every New Zealand document. Identify the contracting entity and account region, then ask which evidence it accepts. Keep the correspondence in a restricted file. For a foreign platform or contested ownership, a lawyer may need to assess the required grant, recognition process or additional documentation. The executor should not send the estate's identity pack to a person who first approached them on social media.
Maintain password hygiene steps while corresponding with providers. Independently reach support through the official website, check the destination before uploading documents and record case numbers. A genuine bereavement process and a paid recovery scam can both appear professional. The Financial Markets Authority's cryptoasset investment risk guidance is a useful reminder that theft, volatility and limited recovery options remain relevant during administration.
Wills, Powers of Attorney & GuardianshipGive the accountant a complete transaction story
An address balance alone rarely explains the tax position. Download available exchange histories during life and keep a consistent record of transfers between your own wallets. Inland Revenue's cryptoasset record-keeping requirements cover transaction types, dates, units, NZD values and supporting records. Preserve source files as well as any calculated report so a professional can investigate discrepancies later.
IRD's guidance on calculating cryptoasset income distinguishes transactions that portfolio software may otherwise misclassify. For example, a movement between wallets you own is different from selling to someone else. Decentralised arrangements require examination of the particular contract. An executor should not import a foreign tax app's default assumptions without checking the New Zealand treatment.
The broader tax responsibilities after a death remain relevant. Keep pre-death records separate from transactions undertaken during administration and ask the accountant which returns are required. Write a short explanation of unusual arrangements, including staking, locked tokens, borrowed funds or assets held for someone else. That context can prevent an apparent portfolio value from being mistaken for unrestricted estate property.
Give the family useful directions without publishing secrets
A letter of wishes companion guide can help explain whom to contact and why you chose a particular recovery arrangement. Keep the legally effective gift in the will and the technical method in its appropriate secure record. If your instructions conflict, an executor may have both a legal dispute and an access problem.
Use secure record capture practices when digitising ordinary account paperwork, while keeping live secrets out of routine phone photographs and automatic cloud backups. An end-of-life document folder can contain the location map and professional contacts. Evaheld can organise these estate essentials and personal instructions within the selected plan, without being represented as a universal exchange custodian or a guarantee that lost keys can be recovered.
A small test case can reveal a large inheritance problem
Imagine an owner with assets on an exchange and a separate self-custody wallet. The executor knows both exist, yet the inventory describes each only as crypto. The exchange can identify its customer once authority is established. The wallet has no equivalent customer-service department. The same two-word inventory entry therefore leaves two quite different jobs unresolved.
During life, the owner can improve the record without disclosing a secret. Identify which holding is custodial, which network the wallet uses, what device is involved and where the controlled recovery arrangement is held. Record the specialist who understands it and whether a second keyholder must participate. Keep an approximate review date so the executor knows whether the instructions predate a wallet migration.
After death, the executor should first preserve the devices and records, contact the exchange through its genuine estate process and obtain suitable help before attempting a transfer. A family member who has used a different cryptocurrency app may not understand the network, passphrase or multisignature arrangement in this estate. Avoid using real assets for an improvised learning exercise.
The resulting audit trail should distinguish discovery, authority, valuation and transfer. Record who performed each authorised step and where the supporting evidence is held, without copying the secret into an ordinary administration report. Beneficiaries need an account of the assets and decisions; they do not all need the technical means to spend the portfolio.
Related Evaheld legal resources may use Australian examples. Use their general planning concepts alongside the New Zealand legislation and official guidance cited here; do not apply foreign legal rules to an NZ will.
Your next step
Use a digital legacy vault for executor instructions to organise non-secret account locations and specialist contacts. Keep live recovery secrets in an appropriately controlled arrangement, with legal gifts in the will and technical recovery planned separately.
Final cryptocurrency inheritance checklist
Prepare a secure, regularly reviewed inventory. Identify legal ownership separately from operational control. Put beneficiary intentions in a valid will. Keep passwords and recovery phrases outside the will. Make the executor's procedure testable. Store tax records, identify expert advisers, review after every wallet migration and update family instructions after major changes.
