Crypto Inheritance: Why Digital Assets Can Die With Their Owners
According to US probate law, cryptocurrency is classified as a digital asset, necessitating clear intent for heirs to receive private digital assets. There are two main transfer methods: custodial wallets, managed by third parties such as banks, and noncustodial wallets, where individuals retain direct control over their assets. Charles Schwab provides crypto services through brokerage accounts, with beneficiary forms applicable to cryptocurrencies; similarly, Chase offers comparable options. However, Coinbase and PayPal do not provide beneficiary forms and require legal documentation for asset transfers. Noncustodial holders face the risk of losing access if they misplace their cryptographic keys. Reddit users recommend utilizing dead-man switches and divided instructions, while Catherine Hodder cautions against including sensitive details in wills. Note that crypto accounts through banks lack FDIC insurance, and custodians impose transaction fees.
Key facts
- US probate and estate law classifies cryptocurrency as a digital asset, not money
- Custodial wallets held by banks or crypto marketplaces generally make post-death transfers easier
- Charles Schwab's crypto services sit within brokerage accounts, so one beneficiary form covers both
- Coinbase and PayPal lacked beneficiary forms as of the article's publication
- Benjamin Orzeske of the Uniform Law Commission said losing a cryptographic key leaves no company to appeal to
- No government or credit reporting bureau records noncustodial crypto holdings
- FindLaw's Catherine Hodder said wills are public documents and should never contain passwords
- Crypto accounts held through banks are not FDIC-insured
Entities
Artists
- Benjamin Orzeske
- Catherine Hodder
Institutions
- Charles Schwab
- Chase
- Coinbase
- PayPal
- Uniform Law Commission
- FindLaw
- Federal Deposit Insurance Corporation
- Wired
Locations
- United States