"Crypto-what?" Digital Currency in Estate Planning

Cryptocurrency exists in an intriguing online world, partly because it was borne out of code cracking activities in World War II. While it’s a fairly new development, it is becoming an increasingly popular investment and now it appears that cryptocurrency will, before too long, cement its place in wills and estate planning.

Here’s what you need to know.

Cryptocurrency and estate planning

What is cryptocurrency?

Cryptocurrency is a digital currency. It exists online and not in physical form, meaning that there are no coins or notes. Security is a huge issue for digital currency, so the currency is encrypted to prevent unauthorised access and use.

Cryptography is used to secure the currency. Cryptography came about during World War II as a means of safeguarding highly sensitive communications. This was, in fact, the premise of the film The Imitation Game.

Key features of cryptocurrency include:

  • Funds are controlled by code, rather than by a banking institution.
  • Users can make payments and store money using an encrypted code. They don’t need to use their names.
  • Blockchain underpins cryptocurrency. It is a type of ledger that records all transactions.
  • An individual must produce an electronic signature to show that they have made a transaction.

The biggest and most well known cryptocurrency provider is Bitcoin, although there are now more than 900 different types of cryptocurrencies throughout the world. It is estimated that Bitcoin alone is worth around $45 billion. The cryptocurrency industry is currently worth around $101 billion and is  growing exponentially.

Some reasons for this are that there are no fees and it is free from government control. Transactions can be made privately and anonymously, although there is come concern that this attracts illegal activity.

Cryptocurrency users can store and spend their money using virtual wallets, which are encrypted and so are considered highly secure.

Other advantages of cryptocurrency are that the transactions can’t be faked or reversed and it’s accessible to everyone .

Cryptocurrency and estate planning

As the popularity of cryptocurrency increases, it is set to permeate other aspects of life. In legal circles, the possibilities for cryptocurrency are particularly interesting.

We are starting to see cryptocurrency as an asset in deceased estates. For example, a person makes a will leaving all of their assets to their children, the beneficiaries. That person dies and then the executor must locate all of the assets of the estate to distribute to the beneficiaries. Cryptocurrencies form a substantial part of the asset pool. The executor must then work out how to distribute them. If the executor doesn’t have access to the encrypted codes and electronic signatures, this task becomes extremely difficult and may cause significant delays in the granting of probate and the distribution of the estate.

This means that if you hold cryptocurrency assets, you need to consider carefully your estate planning needs to ensure that after your death:

  • Your cryptocurrencies are able to be transferred to your beneficiaries; and
  • There are no delays in the administration of your estate.

Drawing a roadmap

The simplest way of dealing with your cryptocurrency assets is to make sure that your executor knows about them.

You may need to store information about these assets with your will or give them to your executor in advance. Two issues arise:

  1. You will need to choose an executor who knows about this type of technology, or who knows how to access assistance to deal with it. The executor will need to be able to identify your digital assets and will need to know how to unlock them. They also need to be able to transfer the asset to the beneficiaries.
  2. If you store the asset information with the will, you need to ensure that the information is secure. Not only will you need to provide information about where to find the assets, but also the keys that are needed to unlock them. It is important that you don’t write the private keys into the will itself because the will becomes a public document after probate is granted, which means that theoretically, the will can be accessed by anyone.

Other options

Storing important asset information with your will can cause other concerns. If someone were to discover and somehow misuse that information, you could be vulnerable to asset theft. Thankfully, some other options are available.

Safety deposit boxes

Even though cryptocurrency is designed to free people from being tied to banking institutions, there’s no doubt that good, old-fashioned bank safety deposit boxes continue to perform a valuable service. The passwords and keys can be stored on a hard drive or on USB stick, which can be physically stored in a safety deposit box.

If you choose this option, you should make a memorandum that says where the information is stored. This should be kept with your will. You should also make sure your executor knows where to find the information and how to access the safety deposit box (for example, they may need to know where the key is located).

M-of-N transactions

One of the most efficient ways of transferring your digital assets to your beneficiaries may be to make the transfer itself a digital process. There are a number of ways to achieve this.

One option is for multiple signature transactions. In Bitcoin, this is known as M-of-N transactions. A minimum number of signatures are required (‘M’) out of the number off possible signatories that you have provided (‘N’). For example, you might provide Bitcoin with the names of five possible signatories. Bitcoin then requires a minimum of three of those people to sign before the transfer of the asset.

The signatories could be the intended beneficiary, or a third party such as your estate planning lawyer. Upon providing the original death certificate to the cryptocurrency fund, the third party could sign off to confirm the transaction.

Dead Man’s Switch

Another option is for an event to trigger a transfer. Bitcoin calls this the Dead Man’s Switch method. This method uses a computer programme to check whether you have passed away. The programme sends regular emails to you and waits for a response. It can also check death certificate databases.

If you don’t respond to the emails and then if your death certificate is located by the programme, it activates a switch and signs the transaction. The asset transfers to the beneficiary.

Checking the death certificate acts as a safety net to ensure that there’s no mistake if you failed to respond to an email. However, this system does require vigilance on your part to regularly check for and respond to emails. You must also ensure that if your email address changes, you contact the fund immediately and update your details. Similarly, if you have ongoing technical issues with your email account or with internet access, you will need to inform your fund.

Smart contracts

Smart contracts can be used. They are also known in Bitcoin as Lock Time Transactions. This method requires you to identify a time at which the transfer of the asset is to occur. You then need to continually reset or postpone the transaction. Upon your death, the transaction will be made on the date to which it was postponed.  Again this method requires some vigilance on your part to continue to reset the transfer date when prompted.

Sharing scheme

A sharing scheme allows you to divide your digital wallet into a number of pieces. You give the pieces to whomever you choose, for example your beneficiaries. For the asset to transfer, all of those people must put their pieces together. This means that after your death, your beneficiaries can collectively decide to put the pieces together to trigger the transfer of the asset.

The biggest risk associated with this method is that a piece may be lost, which means that no one can benefit. Also, if the beneficiaries can’t agree on when or if the unlock the wallet, it may mean that the asset can’t be transferred.

What does it mean?

When you really think about it, it was inevitable that virtual money and digital currency would find its way into our everyday lives. After all, we have virtual friends due to social media and virtual shopping malls thanks to online retailers. We even have virtual garage sales thanks to eBay and Gumtree.

There’s no doubt that cryptocurrency performs a great service for many people, but it’s also really important that if you decide to invest in digital currency, you think about what will happen to it after your death. This includes getting legal advice on how to manage those assets and how they should be transferred to your beneficiaries after you’re gone.

It’s also really important to understand that if you happen to pass away without leaving details of your cryptocurrency holdings, there’s a real risk that the assets will be lost forever. Even if your executor knows of the assets, it will be almost impossible for them to locate and transfer the assets to your beneficiaries.

Websters Lawyers has a great team of solicitors who are highly experienced in estate planning issues. Contact us today for a free first interview. Because the sooner you act, often the better off you and your loved ones will be.





call now

*Conditions Apply


Having such a short time frame I was very impressed with the outcome made by [my solicitor]. Excellent and timely manner


Kurralta Park

Very professional mannerism and overall great outcome was delivered by Websters Lawyers.


West Ryde NSW

Helpful, explained fully, patient, excellent service.



Patient and helpful in explaining the process.



Call Websters Lawyers for a most professional and friendly service. All understanding with [my solicitors] and the reception staff. Thank you so much.



Making my will was effortless on my part, with everything explained clearly. Well done to all.



Great service, professional, explains things clearly, definitely recommend Websters Lawyers.


Upper Hermitage

Patient, professional, good communication about procedures and probable outcomes.



Thank you for all your work over the course of the case. You [both] were always very approachable and I appreciated your understanding and professionalism in all areas.


Christie Downs

All in all my experience was great. Thank you for your time and expertise.


Seacombe Gardens

My matter was dealt with efficiently and was explained in an understandable language. A pleasant experience.



Practical and very helpful. Reasons and explanations given where needed



I stumbled across Websters in the Yellow Pages and I rang, explained my situation and immediately they took my case on. Greatly appreciate their services.



The service from Websters Lawyers was outstanding. [My solicitor] was caring, had patience and was very professional. Wonderful personality.



[My solicitor] made everything so simple to understand. [The receptionist] was wicked too, would recommend them anytime. Level of entire service was outstanding.


Golden Grove


I had dealings with Websters over 20 years ago. They were my first choice when I recently needed legal advice. Both legal and office staff were professional, courteous and accessible at all times. Everything was explained up front in a clear and concise manner. I would not hesitate to recommend their services.



It has truly been a pleasure communicating with you throughout the process. I really appreciate your patient and speedy replies to my questions and requests. You were always able to provide an easily understood response and this helped me deal with the process. Your friendly and positive manner encouraged me to seek your advice.


Battery Hill QLD

[My lawyer's] service was prompt and efficient with all questions explained clearly with all our requests carried out within the laws. Overall service was very satisfactory.


Wynn Vale

[My lawyer] was excellent. 



Excellent service. Professional. Clear advice and instructions. Prompt actions. Overall 10/10!


Ingle Farm

Overall, I was happy with my outcome and my lawyer, would definitely recommend [my lawyer].



[My solicitor] was excellent at helping us through preparing our wills which were particularly challenging as they involved assets in multiple countries. She was professional and knowledgeable and spent time tailoring the wills to our needs.



[My solicitor] was very helpful, respectful and polite. She made sure I understood the process and documentation of our wills.



Professional. Smooth Transaction. 


Largs North

I found the whole experience from Receptionist to Solicitor excellent. They completely put us at our ease.



This was a new experience for us and didn’t have a clue what to do. [Our solicitor] on our first visit put us at ease, explained what will happen, pointed out there was a strong case. [Our solicitor] was genuine in her approach, kept us well informed, explained actions several times with patience and understanding. Overall very happy with the service we received.


Elizabeth Vale

[My lawyer] was very reassuring in her approach to my case. I felt that every possibility in terms of evidence to provide and possible outcomes were explained to me, The result of the case was the best possible outcome I could have expected.

David, Belair


With no previous dealing with the criminal justice system, [our solicitor] gave us excellent advice and guided us through a nightmare to achieve a just and correct outcome. [Our lawyer] was both forthright and compassionate in her handling of our case.

Malcolm, Belair

[My lawyer] explained all the legal terms in language I could understand – she was very easy to talk to.

Cameron, Munno Para

I felt confident knowing my matter was in good hands. Very professional!

Shravan, Christie Downs

Initial phone call was fantastic and the role of an executor was fully explained.

Penny, Henley Beach

The service I received was efficient and promptly finalised. The solicitor clearly explained the details and I was happy with how easy it was.

Dale, Fairview Park

[My lawyer] was exactly the lawyer I needed in a serious matter. The outcome was as predicted which was a fantastic result. I received prompt professional and personal service at all times. Capable and supportive in a very stressful period.

Jason, Munno Para West

I had any of my concerns answered to my satisfaction and understanding.

Valda, Ingle Farm

[My lawyer] is an excellent professional lawyer who assisted in achieving a great positive outcome/result. I sincerely thank you and your great staff for your assistance and guidance throughout my claim. Would highly recommend [my lawyer], staff and Websters Lawyers. Kept fully informed and guided, professionally throughout the matter.

Rena, Northgate

Our work was dealt with very efficiently and speedily. Our lawyer was very professional, at the same time as being approachable. Communication was great.

Christina, Highbury

My experience with Websters Lawyers was far beyond what I expected. From the moment I spoke to [my lawyer] she made me feel very comfortable and eased my stress. In my case I had a court appearance the day before we were scheduled to fly to Spain, Considering my first appointment with her was only 2 weeks before the court hearing, she was able to obtain the police statement and thoroughly work on my case within that limited time frame. She was very knowledgeable, understanding and confident which greatly relieved so much pressure from me and my family. At court, she explained everything thoroughly and advised me of all the possible outcomes. Price, service and result, very highly recommended. Thank you Websters Lawyers.

Rafael, Davoren Park

I have high expectations and they were met. Websters service was swift, courteous, professional and met the agreed budget. I will recommend Websters to my family, friends and colleagues. Thank you.

Peter, Forestville

I would recommend Websters Lawyers, especially for [my lawyer's] dedication and exemplary attitude and advice. She is the epitome of a good lawyer. The service was impeccable.

Pamela, West Lakes

[My lawyer] was very professional and I was made comfortable to understand.

Gregory, Penfield

I was very pleased with the end result and how well [my lawyer] conducted herself.

Sonya, Glanville

Very professional.

Jesse, Morphett Vale

[My lawyer] has been very prompt , reliable and provided a high level of communication.

Peter, Parkside

My experience at Websters was very positive. The stress was taken from me and I could not be happier with the outcome. [My lawyer] at Websters was professional, personable, available and caring. Thank you for making the experience stress free.

Magda, Holden Hill

Found my lawyer upfront and reliable – I would highly recommend Websters Lawyers.

Lee, Evanston Park


Top bunch of solicitors and admin staff. Very friendly and to the point service.

Bradley, Hallett Cove

Websters Lawyers were very professional in their service, I would be happy to recommend them.

Carole, Tea Tree Gully

We would not hesitate in recommending Websters for any legal matter. They are professional and courteous at all times and call back when they say they will.

David and Dianne, Lockleys


I fully recommend Websters Lawyers. This was the 3rd time myself & my family have used Websters Lawyers. In these stressful times we have found them to answer and guide us through the process needed to accomplish the legal requirements in a timely and courteous manner.

Dianne, Lynton

Solid, to the point, no hustle. Highly recommend.

George, Windsor Gardens

Contact us

Adelaide Office :
T: ( 08 ) 8231 1363
F: ( 08 ) 8231 5529

Ridgehaven Office :
T: ( 08 ) 8395 8000
F: ( 08 ) 8395 8222

Smithfield Office :
T: ( 08 ) 8487 0150
F: ( 08 ) 8395 8222

© Copyright WebstersLawyers.com 2017 All Rights Reserved
Website By A to Z Marketing