How cryptocurrency and digital assets create a complex problem for inheritances
Crypto and other digital assets are becoming bigger parts of wills and inheritances, creating fresh issues for families.
A surge in cryptocurrency holdings among middle-aged Australians has exposed a critical gap in estate planning which can lock families out of substantial inheritances and is creating a new frontier for wealth disputes.
Legal experts warn that while cryptocurrency is beginning to feature in more wills, most lack basic mechanisms to ensure these assets can be passed on.
There’s a string of digital assets that have emerged, from cryptocurrencies and non-fungible tokens (NFTs) to online businesses, monetised social media accounts and even online savings accounts.
The consequences are stark. Aside from creating confusion and sparking family fights there’s the real risk assets get lost forever in cyberspace with six- and seven-figure holdings trapped behind password-protected wallets and executors unable to identify what digital assets exist.
Write it down
NDA Law director Lisa Christo said digital assets often created challenges when administering an estate.
“Without clear instructions on how to access information or assets, executors can experience significant difficulties in accessing digital assets, particularly if they are password protected,” Ms Christo said.
“You should collate important information such the names and contact details of your accountants, financial planners, and stockbrokers. These professionals are instrumental in ensuring that the asset can be appropriately transferred in accordance with the will.”
Ms Christo said people should never keep a list of their online passwords in a will, as it might become public.
“You can use an online password vault that securely stores all of your passwords in one place,” she said.
“Many platforms now offer tools to nominate someone to manage your account after death. Facebook’s legacy contact and Google’s inactive account manager are good examples. Others, like Dropbox, will require formal proof of death before access is granted.”
Experts say cryptocurrency is the key online asset increasingly featuring in wills and inheritances, but lesser-known ones can include domain names, in-game assets, loyalty program points, digital intellectual property and licensing rights. Disputes can arise around ownership, valuation and division of digital assets.
Estate battles
Tiyce & Lawyers principal Michael Tiyce said he had seen family law cases where people were prevented from dealing with their cryptocurrency, or had to hand over all their electronics so cryptocurrency could be preserved.
“A legal grey area at the moment is the debate that’s going forward about whether cryptocurrency is actually property,” he said.
“If cryptocurrency is not recognised as property, the effects are significant. Crypto holdings, likely, then wouldn’t form part of the deceased’s estate and testamentary gifts may be void for uncertainty.
“This is all completely hypothetical at the moment … we haven’t seen this go up to the High Court yet, and we don’t have a complete answer.”
Mr Tiyce said people could create some certainty around cryptocurrency inheritances by having “multi-key access”, enabling the crypto to be released only if two or more different people, or lawyers, worked together.
Safewill founder Adam Lubofsky said there were five times as many wills including cryptocurrency than his businesses recorded in 2019.
“This growth isn’t limited to younger generations, it’s been consistent across most age groups,” Mr Lubofsky said.
“In fact, will writers aged 40 to 65 have shown the sharpest increase, with fewer than 1 per cent of Safewill wills including cryptocurrency in 2019, rising to just over 6 per cent in 2025. This represents a 600 per cent increase in crypto holdings by that group.”
Awareness gap
Mr Lubofsky said digital assets had shifted from a niche mention to a standard component of many people’s estates.
“This trend has been driven by the overall growth of digital wealth. More people now hold a meaningful portion of their assets in digital form, whether that’s cryptocurrency, online businesses, or other digital investments,” he said.
“At the same time, there remains a major awareness gap. Many people still overlook digital assets when writing their will or aren’t sure how to handle them because of complexities around access, passwords, and security.
“Without clear planning, these assets can easily be lost or locked away forever.”
Mr Lubofsky said the biggest risk was not tax or volatility, but that loved ones could not find or access digital wealth.
“Step one is understanding your custody model. Are your assets held on an exchange, in a digital wallet, or on a physical device?” he said.
“Each comes with very different estate implications. Online exchanges like CoinSpot, Binance and Coinbase are the easiest for executors to deal with because they more commonly have deceased-estate policies similar to banks.”
When it dies with you
If people held crypto directly through a hardware or software wallet, it could only be recovered through a “seed phrase” – a string of words linked to the wallet, Mr Lubofsky said.
“If that phrase dies with you, so does the asset. We’ve seen this occur a number of times.
“You need to make sure your executor or trusted person can access your crypto on death, without creating a risk of theft during your lifetime. Some clients are using multi-signature wallets or custody services, where two or more people must authorise a transaction – spreading risk and reducing single points of failure.
“It’s also important not to overlook other digital assets – social media pages, cloud storage, and Apple or Google accounts can hold real financial or sentimental value. Facebook lets you nominate a legacy contact, Apple lets you add one through its digital legacy feature, but most platforms still don’t have clear processes.”
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