Digital Assets and Estate Planning: Cryptocurrency, Online Accounts, and What Happens When You Die Without a Plan

Introduction

Imagine a successful professional who quietly accumulated £150,000 in Bitcoin over the past five years, stored securely in a non-custodial wallet. One morning, she suffers a fatal stroke. Her family arrives at her flat with nothing but a will mentioning her house, her investments, and her car. No mention of cryptocurrency. No record of the wallet address. No backup of the private keys. The Bitcoin—now entirely inaccessible and irretrievable—will never reach her children. It is effectively destroyed.

This scenario plays out hundreds of times every month across the UK. A significant proportion of all cryptocurrency in existence is estimated to be permanently inaccessible — the result of deceased owners, lost private keys, and forgotten credentials. HMRC treats these assets as personal property and part of the taxable estate regardless of whether they can be accessed [1]. For Ethereum, NFTs, and other digital assets, the same access risks apply.

Yet the problem extends far beyond cryptocurrency. Most UK adults now hold dozens of digital assets: email accounts, photo libraries stored in the cloud, social media profiles, online banking credentials, domain names, subscription services, and digital investments. Few have any plan for what happens to these after death. Until very recently, the law was silent on whether digital assets were even "property" at all, leaving executors and grieving families in legal limbo.

That changed in December 2025, when the Property (Digital Assets etc) Act 2025 received Royal Assent [2], formally recognising digital assets as a distinct category of personal property. But legal change alone solves only part of the problem. Executors still face unprecedented practical and technical challenges: How do you access a cryptocurrency wallet without the private key? Can you inherit a Facebook account? What happens to an online business? How is volatile cryptocurrency valued for inheritance tax? Who has the authority to sell these assets?

This guide cuts through the confusion and explains exactly what you need to do now to protect your digital estate.

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The scale of digital assets in a typical estate

Most people underestimate the financial and emotional value of their digital presence. Consider a 55-year-old professional with:

• £80,000 in Bitcoin and Ethereum (stored in a hardware wallet)
• £45,000 in an online investment account with AJ Bell
• £12,000 in PayPal credit and pending eBay sales
• A domain name (valued at £3,000) and associated business brand
• Cloud photo libraries across Google Photos, iCloud, and Dropbox (collectively worth £0 in cash but irreplaceable to family)
• Dormant email accounts containing 20 years of sentimental correspondence
• A monetised YouTube channel generating £400 per month (£4,800 per year in advertising revenue)
• Subscription services (Netflix, software licenses, cloud storage)
• Social media profiles with decades of personal history and memories

Total financial value: approximately £142,000–£145,000, depending on cryptocurrency price on death. This sum likely exceeds the value of many physical assets in a typical estate. Yet it is precisely the type of wealth that most wills completely ignore.

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Categories of digital assets: a framework

Understanding digital assets requires distinguishing between three overlapping categories: assets with clear financial value that are transferable; assets with sentimental but limited economic value that may or may not be transferable; and licenses and subscriptions that are typically non-transferable by law.

Category	Examples	Financial Value	Sentimental Value	Transferable?	Tax Treatment
Cryptoassets	Bitcoin, Ethereum, NFTs	High; volatile	Varies	Yes, but technically difficult	IHT and CGT apply
Online financial accounts	Investment platforms (AJ Bell, Hargreaves Lansdown), PayPal, online bank accounts	High; fixed	Low	Yes, with probate	IHT and CGT apply
Digital media & accounts	Social media (Facebook, Instagram), email, Google Drive, iCloud, cloud photo libraries	Zero to low (unless monetised)	Very high	Varies by platform; difficult	No tax on transfer
Domain names & intellectual property	Registered domains, websites, trademarked content	Potentially high	Medium to high	Yes	IHT and CGT apply
Monetised content	YouTube channels, Patreon, Substack, blogs	Medium to high (depends on following)	Medium	Varies; usually transferable	IHT and CGT apply
Subscriptions & licenses	Netflix, Adobe Creative Cloud, Microsoft 365, software licenses	Zero (licensing, not ownership)	Low	No—personal to subscriber	N/A
Online businesses	E-commerce stores, SaaS products, freelance platforms (Upwork, Fiverr)	High	Medium	Yes, with complexity	IHT and CGT apply

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The legal position: what the Property (Digital Assets etc) Act 2025 changed

Until December 2025, English and Welsh law was fundamentally uncertain about whether digital assets were "property" at all. Cryptocurrency, NFTs, and other tokens existed in a legal grey zone. An executor holding a grant of probate—the legal authority to manage an estate—had no explicit statutory right to control a deceased person's Bitcoin, despite the asset clearly having value and forming part of the estate.

The Law Commission's final report on digital assets (published June 2023) [3] concluded that a new category of personal property was essential. The report recommended that common law should formally recognise digital assets as a distinct form of property, separate from both tangible goods and traditional intangible assets (like shares or debts). Digital assets, the Commission argued, required their own legal framework because they are inherently intangible, often located on distributed ledgers or private servers, and controlled via cryptographic keys rather than possession or documentation.

The Property (Digital Assets etc) Act 2025 [2] enacted these recommendations. The Act:

1. Confirms that digital assets are personal property under English law, eligible for transmission on death to beneficiaries
2. Applies the existing law of succession to digital assets—they pass through the deceased's estate according to the will or intestacy rules
3. Grants executors express statutory authority to manage, control, and transfer digital assets, provided the executor can access or take control of them
4. Clarifies that courts can make orders requiring third parties (e.g. cryptocurrency exchanges) to assist executors in accessing or transferring digital assets
5. Extends to Scotland and Northern Ireland (with modifications for Scottish law)

Importantly, the Act does not magically solve access problems. An executor who holds a grant of probate can now legally claim ownership of the deceased's Bitcoin—but if the private keys are lost, the Bitcoin remains inaccessible. The legal right to control does not restore lost cryptographic keys.

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Inheritance tax: digital assets are part of your taxable estate

HMRC treats digital assets as property for inheritance tax (IHT) purposes. This is unambiguous and has been established for some time, but it remains widely misunderstood.

Key IHT rules for digital assets:

• Cryptocurrency, NFTs, domain names, online businesses, and all other digital assets must be declared on the IHT return (form IHT400) if the estate is subject to a probate application
• Digital assets are valued at market value in pounds sterling on the date of death (not the date the will is read, not the date the executors take control)
• Valuation for volatile assets (e.g. Bitcoin) is based on averaging prices from major exchanges on the day of death—executors must be able to demonstrate how they calculated this figure; HMRC will request evidence
• If the estate exceeds the nil-rate band (currently £325,000 for individuals; £500,000 for married couples), the excess is charged at 40% IHT
• Digital assets count toward the total estate value, reducing the amount of other assets that can pass tax-free

Example: A widow dies leaving:

• House: £500,000
• Savings: £100,000
• Bitcoin: £60,000 (valued at market price on date of death)
• Stocks and shares: £80,000
• Total estate: £740,000
• Nil-rate band: £325,000
• Excess: £415,000
• IHT liability: £415,000 × 40% = £166,000

Without proper planning, the cryptocurrency alone adds £24,000 to the IHT bill (£60,000 × 40%). This is a common hidden cost that catches executors by surprise.

Planning consideration: Many of the standard IHT mitigation strategies—such as spouse exemptions, charitable giving, and trusts—can apply to digital assets just as they do to other property. Consider whether your digital holdings warrant inclusion in an IHT-efficient estate plan.

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Capital gains tax: the step-up relief and what happens after

When you die, your digital assets receive a "step-up" in base cost for capital gains tax (CGT) purposes. This is one of the few remaining tax reliefs available at death.

How the step-up works:

• Your assets are deemed to be sold at market value on the date of your death (not an actual sale—this is a fictional "deemed disposal" for CGT purposes only)
• Your executors inherit those assets at this new, higher base cost (stepped-up value)
• If your executors later sell the assets, CGT is calculated on the gain between the stepped-up value and the actual sale price

Example: You bought Bitcoin at £5,000 per coin; it's worth £35,000 per coin when you die. Your executors inherit at the £35,000 base cost. If they immediately sell at £36,000, only £1,000 is a chargeable gain. The accumulated gain of £30,000 escapes CGT entirely.

This step-up is extremely valuable and often makes it tax-efficient for executors to hold and then sell digital assets rather than to distribute them to beneficiaries who would then sell (and potentially incur CGT at a higher rate).

Key CGT points:

• UK resident individuals are liable to CGT at rates up to 20% on gains from digital assets
• For disposals of digital assets after inheritance, the pooling rules apply—if you own multiple units of the same asset (multiple Bitcoin, for example), you calculate the average cost basis [4]
• Losses on digital assets can be carried forward to offset future gains
• Gains made by executors during estate administration (in their capacity as executors, not as individuals) are liable at 20% CGT, regardless of the individual's normal CGT rate

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The access problem: private keys, seed phrases, and why most valuable assets are most at risk

This is the critical vulnerability. Digital assets—particularly those most valuable and most worth protecting—are the ones most likely to be permanently lost on death.

Self-custody: the security-access trade-off

Cryptocurrency stored in a non-custodial wallet (a wallet you control using a private key or seed phrase) is legally owned by whoever possesses the private key. This is true ownership and genuine security against platform collapse or government seizure.

It is also true isolation: if you die and your private key is lost or unknown, the asset is gone forever. There is no mechanism to recover it, no customer service to call, no insurance policy. The cryptography that makes the asset secure also makes it irretrievable.

A typical non-custodial Bitcoin or Ethereum wallet is accessed using:

1. A seed phrase (mnemonic recovery code): 12 or 24 words, in a specific order, that regenerate the private keys. These words must be written down, memorised, or stored securely. They must not be typed into a computer connected to the internet.
2. A PIN or passphrase: Additional security layer; often required each time the wallet is accessed.
3. Physical hardware: If using a hardware wallet (e.g. Ledger, Trezor), the device itself must not be lost or damaged, and the seed phrase must be independently backed up.

If a deceased person has stored their seed phrase in a locked safe, without leaving the combination or instructions for opening it, the asset is inaccessible. If the seed phrase was written down and destroyed, or stored in a password manager to which no one has the master password, the asset is lost. If the deceased kept it "in their head only," it dies with them.

Custodial accounts: the counterparty risk

Cryptocurrency held on an exchange (Coinbase, Kraken, Binance) or in a custodial account (a service that holds the keys on your behalf) is technically owned by the exchange or custodian, not by you. But the exchange's terms of service and contractual relationship with you create a quasi-ownership right.

When a custodial account holder dies, executors can usually access the account—but it requires:

1. Proof of death (death certificate)
2. Proof of authority (grant of probate or other legal authority)
3. Identity verification (likely extensive; platform policies vary)
4. Adherence to the exchange's terms of service, which may impose time limits, fees, or restrictions

The exchange is obligated to release the funds, but the process is slow, sometimes taking weeks or months. During this time, the customer is locked out of the account, and they cannot monitor or adjust the holdings. If the exchange becomes insolvent during this period (unlikely but possible), the funds may be at risk.

Practical advice: For the most important digital assets, use a combination approach: custodial holding for the majority of assets (easier access on death, platform insurance) and a separate non-custodial backup (security and independence) with clear documentation of seed phrases and access credentials.

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Exchange accounts and the probate process

When a deceased person held cryptocurrency or digital assets on an exchange (Coinbase, Kraken, BlockFi, Binance), the executor must:

1. Locate and list the exchange account(s) as part of the estate inventory
2. Notify the exchange of the account holder's death; provide death certificate and any other requested documentation
3. Provide proof of authority, usually a grant of probate or letters of administration (in Scotland, confirmation)
4. Verify the account value on the date of death (for IHT return)
5. Request that the exchange grant access to the account; this can take weeks
6. Decide whether to hold or liquidate the assets
7. If liquidating, initiate a sell order and arrange a bank transfer to the estate account
8. If holding, ensure the account remains in the executor's control and is properly documented and tracked

Most major cryptocurrency exchanges now have formal procedures for this, though they vary. Some require original death certificates; others accept scanned documents. Some allow direct transfer of assets to a beneficiary's exchange account; others require liquidation and bank transfer. A few exchanges have no formal process at all and will simply freeze the account indefinitely.

Planning point: Include a list of all exchange accounts in your digital asset inventory, along with usernames, account types (spot account, staking account, etc.), and approximate values. This dramatically simplifies the executor's task.

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What to include in your estate plan for digital assets

1. Digital Asset Inventory

Create and maintain a list of all your digital assets. Update it annually. Include:

• Cryptocurrency: Exchange name, account type (spot, staking, lending), approximate holdings and value
• Non-custodial wallets: Public addresses or descriptions; do not store private keys or seed phrases in this document
• Online investment accounts: Platform name (AJ Bell, Interactive Investor, etc.), account number, approximate value
• Email and cloud accounts: Primary email, backup email, important email addresses (PayPal, banks, etc.)
• Social media: Usernames for all active accounts (Facebook, Instagram, Twitter, LinkedIn, etc.)
• Streaming and subscriptions: List of all paid services (Netflix, Adobe, etc.); most will simply cancel, but some may be valuable
• Domain names and websites: Domain registrars, hosting providers, any associated email or business accounts
• Online businesses or monetised content: YouTube channels, Patreon, Substack, Shopify stores
• Digital media libraries: iCloud, Google Drive, OneDrive, Dropbox (with approximate data volume and location of important files)

This inventory should be clear enough that someone unfamiliar with your digital life can understand what exists, where it is, and whether it has financial or sentimental value.

2. Credential Storage: The Secure Approach

Never include passwords, private keys, or seed phrases in the inventory itself. Instead, use a password manager to store these securely, and grant your executor access to the password manager.

Recommended approach:

• Use a dedicated password manager (1Password, Bitwarden, LastPass, KeePass) to store all digital credentials
• Create a "vault" or shared folder within the password manager for your executor; include access credentials for email, exchange accounts, cloud accounts, and other critical services
• Do NOT include private keys or seed phrases in the main password manager file; these are too valuable and sensitive
• Instead, store private keys and seed phrases separately: For critical cryptocurrency holdings, store the seed phrase in a physical safe, a bank safety deposit box, or with a specialist custody provider (e.g. a lawyer or trust company). Leave instructions for your executor about where this information is held and how to access it
• Give your executor the master password to the password manager (or access to it, via a secure channel) either in your will, in a separate sealed letter, or through a third-party service such as a law firm

This approach balances security (the seed phrase is not stored online or in a single computer file) with accessibility (your executor can unlock the password manager and find everything else).

3. Letter of Instruction (Digital Edition)

In addition to your will, write a "letter of instruction" (not a legal document, but practical guidance) that explains:

• The location of your digital asset inventory
• How to access your password manager and where the master password is stored
• Which digital assets should be liquidated urgently (e.g. volatile cryptocurrency) and which can be held
• Which assets are sentimental rather than financial (photo libraries, emails) and how they should be handled
• Username and contact details for your digital executor
• The web address or details for any online business or content that generates income
• Any cryptocurrency holdings in non-custodial wallets and the location of the seed phrase (e.g. "in the safe in my study, behind the document box")

4. Appointing a Digital Executor

You can appoint a "digital executor" as a separate role, or combine it with the role of your main executor. A digital executor should be:

• Reasonably tech-savvy: They will need to log into accounts, understand exchange processes, and possibly sell cryptocurrency on your behalf
• Trustworthy: They will have access to significant wealth and sensitive personal information (email contents, photos, personal messages)
• Younger ideally: The digital landscape changes rapidly; someone 10–15 years your junior is more likely to understand emerging platforms and processes
• Available for administrative work: Digital asset management can be time-consuming; choose someone with capacity to dedicate weeks or months to the task

It is perfectly normal—and often advisable—to appoint a specialist: a solicitor, accountant, or trust company can serve as digital executor, although this will incur fees.

5. In Your Will

Explicitly state that your executors have authority to:

• Access all digital accounts using stored credentials
• Liquidate or transfer digital assets
• Close or memorialise social media accounts
• Manage online businesses or revenue-generating content
• Sell domain names and intellectual property
• Manage cloud storage and photo libraries

While the Property (Digital Assets etc) Act 2025 now implies this authority, being explicit in your will removes any ambiguity for executors and third parties (exchanges, email providers, platforms).

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Social media, email, and personal accounts: memorialisation and legacy contacts

Social media platforms have developed specific policies for deceased users, though they vary significantly by platform.

Facebook and Instagram: Legacy Contact

Facebook allows you to designate a "legacy contact"—a trusted person who can manage limited aspects of your profile after death. The legacy contact cannot log in, but can:

• Write a pinned post (e.g. to announce your death or direct people to a memorial service)
• See and respond to new friend requests
• Update profile photo and cover image
• Decide who can post tributes
• Remove tribute posts if desired

To set up a legacy contact, go to Settings & Privacy > Settings > Memorialization settings. You name a person and confirm their identity; they will be notified.

Alternatively, you can choose to have your account deleted entirely upon death, rather than memorialised.

Without a designated legacy contact, a Facebook account can still be memorialised by a family member after death, but the person who initiated the memorialisation will become the "viewer" rather than the legacy contact, and will have fewer permissions.

Google: Inactive Account Manager

Google's Inactive Account Manager is arguably the most comprehensive digital legacy tool available. It allows you to:

• Choose an inactivity period (3, 6, 9, or 12 months)
• Designate one or more people to receive your data if your account becomes inactive
• Specify what should happen to your Gmail, Google Drive, Google Photos, YouTube, and other Google services
• Choose whether to delete your account after the inactivity period

You can specify different actions for different people (e.g. send Drive contents to a spouse, YouTube channel to a business partner) and can set a personalized message that will be sent to them [5].

Twitter/X, LinkedIn, and Other Platforms

Most platforms have a basic "memorialisation" process, but few offer the sophistication of Facebook or Google. Check the specific platform's death policy.

General approach: Contact the platform with a death certificate; they will either memorialise the account (display it but allow no new posts) or delete it.

Important: Email accounts (especially Gmail, Outlook, Yahoo) are critical. If you die and your email account remains active and unmanaged, anyone who compromises it gains access to other accounts that use email-based account recovery (bank accounts, cryptocurrency exchanges, social media). Ensure that either your executor or legacy contact can quickly secure or close your primary email account.

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The digital executor: authority, responsibilities, and limitations

Authority

The Property (Digital Assets etc) Act 2025 grants executors statutory authority to manage digital assets, but this authority is only as strong as the executor's ability to actually access or take control of the asset.

An executor with a grant of probate can:

• Demand that an exchange release cryptocurrency
• Request account access from email providers, cloud services, and online banks
• Initiate the legal transfer of domain names and online businesses
• Require social media platforms to confirm account ownership or assist with memorialisation

But: Most digital service providers' terms of service prohibit account access by anyone other than the account holder, even with a grant of probate. The practical right to access is limited by contract, not by law.

Practical Responsibilities

A digital executor must:

1. Locate all digital assets: Use the inventory you've prepared; search for credit card statements, email confirmations, and logins left in password managers
2. Verify values on the date of death: For cryptocurrency, this requires finding the exchange rate on the specific date; historical price data is available from exchanges and specialist sites
3. Report to HMRC: Include digital asset values on the IHT return
4. Liquidate or transfer as directed: Follow your will's instructions; if none exist, apply the general rules of succession
5. Manage accounts: Keep email and exchange accounts secure; do not leave them dormant and accessible to others
6. Pay taxes: CGT and IHT liabilities may require liquidating some assets; coordinate with the main executor and tax advisors
7. Distribute to beneficiaries: Transfer assets or funds to the persons named in the will; keep detailed records

Limitations

Even with a grant of probate, a digital executor cannot:

• Recover a lost cryptocurrency private key or seed phrase (crypto is irretrievable once the keys are lost)
• Compel non-regulated platforms (small businesses, informal services) to release assets
• Access accounts without credentials unless they obtain a court order (which is expensive and slow)
• Sell certain non-transferable assets (e.g. streaming subscriptions are personal to the subscriber; upon death, they usually terminate)
• Circumvent platform terms of service; if the platform's policy prohibits transfer, even probate may not override this

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Frequently Asked Questions

Q: Will my executor need a court order to access my cryptocurrency exchange account?

A: Not usually. Major exchanges (Coinbase, Kraken, Binance, BlockFi) have formal "deceased account holder" procedures and will release funds upon receipt of a death certificate and proof of authority (grant of probate). The process can take weeks, but no court order is needed. Small or unregulated exchanges may be less cooperative; check the platform's policy in advance.

Q: What happens if I die and no one knows about my Bitcoin?

A: It remains on the blockchain, attached to your wallet address, forever. It is not lost in a physical sense (the Bitcoin still exists, recorded on the ledger), but it is permanently inaccessible. No one can spend it, move it, or inherit it. From a practical perspective, it is as good as destroyed. This is why documenting your digital assets is essential.

Q: Can cryptocurrency be left to someone in my will?

A: Yes. The Property (Digital Assets etc) Act 2025 confirms that digital assets are personal property and pass according to your will or the rules of intestacy. Name a beneficiary for the cryptocurrency in your will, and ensure your executor knows where the credentials are stored. Upon your death, your executor holds the asset in trust for the beneficiary until the estate is distributed.

Q: Will I have to pay inheritance tax on my cryptocurrency?

A: Yes. Cryptocurrency is treated as property and forms part of your taxable estate. It is valued at market value in pounds sterling on the date of death. If the total estate exceeds the nil-rate band (£325,000, or £500,000 for married couples), the excess (including the cryptocurrency) is charged at 40% IHT. However, various IHT reliefs—such as spouse exemptions, charitable giving, and trust structures—can apply to digital assets just as they do to other property.

Q: Is my email account inherited with my other assets?

A: Email accounts (Gmail, Outlook, Yahoo) are not technically inherited; they remain the property of the email provider and are bound by the provider's terms of service. However, your executor should be able to request access (with death certificate and probate) and can then download data or close the account. It is critical that your executor secures your primary email account quickly after your death, as it can be used to compromise other accounts. Consider granting your executor access to your password manager as the first step.

Q: Do subscription services (Netflix, Adobe, etc.) pass to my beneficiaries?

A: No. Subscriptions are non-transferable by design; they are licenses tied to an individual person. Upon death, they simply terminate. Your beneficiaries can subscribe to their own accounts if they wish. You cannot leave someone a Netflix subscription in your will. The cost of these subscriptions should be factored into your estate planning (i.e. ensure your estate has sufficient liquid funds to cover taxes and costs).

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Disclaimer

Cryptocurrency and other digital assets are volatile and subject to rapid price changes. Values can fluctuate significantly between the date of death and the date the estate is administered, affecting both inheritance tax valuations and the practical decisions executors make about liquidation.

Digital platforms' terms of service, policies, and technical capabilities change frequently. Information about account access, data inheritance, and platform policies is accurate as of the date of this article (April 2026) but may become outdated.

This article is informational and does not constitute legal, tax, or investment advice. Digital asset estate planning involves complex tax and legal issues specific to your individual circumstances. You should always consult a qualified solicitor, accountant, or tax advisor before finalizing your digital estate plan, particularly if your digital assets are substantial or your estate is complex.

The Property (Digital Assets etc) Act 2025 is recent legislation, and interpretation by courts and practitioners is still evolving. This article reflects the current understanding but may be superseded by case law or further statutory clarification.