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What Happens To Your NFTs And Crypto Assets After You Die?

What Happens To Your NFTs And Crypto Assets After You Die?

All types of crypto currency, including NFT assets, Bitcoin, Utility tokens, and Security tokens, have grown in importance recently. But if you don’t have a proper strategy for your crypto assets in your Will, they could become invalid after your death. This innovative asset may be challenging and extremely interesting if you have previously invested in crypto-assets. Even though you view crypto as a futuristic investment, you must consider it in the long run.

It includes creating a Will that specifies what happens to your crypto when you die. Though most people probably have at least thought about what happens to their physical assets once they pass away, the same importance is usually not given to their Digital Assets.

With how ingrained technology is in our lives, it is time to start thinking about how to protect digital assets after death or become incapacitated. So, this article is a mind map to help you with the procedure.

What are NFTs and Crypto Assets?

You may wonder about what does crypto have to do with NFTs or are NFTs stored in crypto wallets? Well, Crypto assets are digital assets you can store, transfer or trade digitally. It is a subpart of digital assets that use cryptographic hash functions to secure your digital data and blockchain technology or blockchain investment to store and record your crypto transactions. Crypto assets also include NFTs.

Non-fungible tokens (NFTs) are unique crypto tokens on a blockchain that cannot be replicated. Each NFT token has a unique identification value that differentiates it from other NFT tokens. NFTs represent real-world items like real estate and artwork digitally.

With the rise of crypto assets in the past decade, reports show that almost 90% of Americans have heard of cryptocurrencies, while 16% have traded in them at least once. This report is a stark contrast to the initial skepticism that surrounded crypto and its investment.

Transforming physical assets into digital assets and tokenizing them makes selling, buying, and trading them more effective. It also reduces the chance of fraud. It simplifies transactions digitally and creates scope for a new crypto currency market, thereby improving business processes.

Though cryptocurrency has been around for quite a long period of time, NFTs (Non-Fungible Tokens) are all the rage these days. They are similar to cryptocurrencies in the aspect that they exist on a blockchain investment but differ from them as they cannot get traded at equivalency.

While many are still wondering and trying to wrap their heads around what NFTs mean and how they work, artists like Mike’ Beeple’ Winkelmann have already made a fortune from selling their works.

Why should you include Crypto in your Estate Plan?

Like the physical and other belongings you own in your name, a crypto asset is considered a transferable asset. It means that it has to undergo all the legal processes of distributing your estate before it can be legally handed over to your beneficiaries after your demise. Making a will beforehand generally makes the legal process quicker and easier for everyone involved.

Even if there isn’t a will for your physical assets, they can be passed on, considering the succession laws in that area. The same does not apply to Digital Assets. Since many of your Digital Assets are only accessible via a password, they could be lost forever if you never share those passwords with anyone you trust.

Many social media sites have legacy policies to close the accounts of deceased users. However, matters are a bit more complicated when it comes to cryptocurrency. Unless the 64-digit key gets not included in your Digital Estate Plan, they could get stuck in virtual limbo.

An executor can enquire to protect digital assets that belong to an individual; the same does not apply to their cryptol Assets. Since crypto-assets do not belong to any centralized governing body, inquiries cannot be made regarding their existence. As such, an individual with a vast crypto fortune might pass away without their family ever knowing about it.

While most individuals do not even think about Estate Planning until they reach their mid-thirties, the crypto currency market is populated by the FIRE (Financial Independence, Retire Early) generation. It mainly consists of millennials and Gen Z, the latter of which are yet to reach the age where they start thinking about Estate Planning. These potentially young millionaires could pass away without anyone knowing about the existence of their digital fortune.

So we’ve seen what the issues are. The most logical solution to such an issue would be to use a password manager that keeps track of all your passwords. By sharing the password with the manager with someone you trust, you can decide what Digital Assets are to be passed on and which are not.

This might seem like a convenient solution. But it’s necessary to note that many companies are vehemently against sharing passwords as they consider it a violation of their user agreement.

There is also the existence of tools such as Google’s Inactive Account manager and Apple’s Digital Legacy Program that lets you pass on your data following your death. While you could use them to share your crypto PIN using these tools, they aren’t without their shortcomings.

However, creating a Digital Estate Plan to protect digital assets is the best solution. Using a Digital Estate Plan, you can have all your Digital Assets fall under a common umbrella that can be passed on to your loved ones following your death. You can also decide which assets are to be passed on and which are to be permanently deleted.

Having a crypto real estate plan in place removes the burden your family would otherwise have to face in deciding what happens to your Digital Assets when you die/ become incapacitated. And when it comes to Digital monetary Assets such as cryptocurrencies and NFTs, they can also benefit your family financially.

Best practices for passing on your crypto assets

Best practices for passing on your crypto assets

The best practices you can implement for passing on your crypto assets are as follows:

  1. Name an inheritor/beneficiary for your crypto assets in your will: An inheritor is an individual or organization to inherit your asset after your demise. List all digital assets, including crypto assets, in your crypto real estate plan. Provide sufficient information about them to avoid confusion during probate (like which beneficiary should inherit them, where they’re stored, and access to private keys). Also, remember to write the name of the person you appoint to administer your will, i.e., the executor. For a more manageable process, appoint a digital executor familiar with crypto.
  2. If you hold a large number of crypto assets, consider funding an immutable trust: In case the valuation of your estate is above a specific limit, it could be subjected to estate tax when you pass away. A systematic, structured immutable trust can remove your valuable assets from the taxable estate. However, the crypto mutual fund assets you have transferred to an immutable/ irrevocable trust won’t receive a step-up after you die.
  3. Have proper knowledge and understanding of the documents where your crypto is stored: If your crypto is stored online in a custodian account on a crypto exchanger like Gemini, Coinbase, or eToro, your digital executor can contact them to allow the transfer of your crypto assets. Documents like a death certificate, a copy of your will, identification proof, and a letter signed by the executor instructing what to do with the crypto account are needed. Some accepted best practices include:
    • Document the location of the crypto wallet.
    • Document both public and private keys for the wallets you own. Keep both your keys protected and store them in separate locations.
    • Document other information like recovery phrases and PIN code needed to access your crypto index fund.

Specify your beneficiary for crypto holdings

A beneficiary is a trustable individual or organization that can protect digital assets after death or inherit your assets after you pass away. It’s essential to specify the name of a beneficiary in your estate plan whom you consider the best and attest a document to your will that enlists all your crypto holdings like a public key, private key, PINs, passwords, and information to find your cold wallet (used to store crypto for a long time) and hot wallet (used for purchasing and trading crypto). Ensure that your holdings will go to the proper beneficiary by keeping your will updated, especially after non-regular events like divorce or marriage.

Understand where and how your crypto is stored

After you purchase cryptocurrency, you must store it safely and free from online theft or hacks. Usually, crypto is stored in crypto wallets, which are online software or physical hardware used to store private key access to your crypto account securely. Some cryptocurrency exchanges provide wallet facilities, making storing your crypto directly via the platform more convenient. There are two types of wallet providers for different types of crypto currency:

Hot wallet: Hot wallet storage is used for purchasing and trading your crypto. It uses online software to secure and protect your private key access to your crypto assets.

Cold wallet: Imagine it like putting your crypto assets in a freezer. Cold wallets are utilized to store crypto for a longer duration. It relies on offline physical hardware devices to store your private keys.

How to include NFTs in your estate?

It’s essential to safeguard your assets if you want your beneficiary to gain ownership of your assets. Your holdings also include digital assets like NFTs. Through systematic planning, you can smartly include NFT assets in your estate plan. You cannot pass on NFTs directly to your beneficiary; you can only pass it through will or trust.

NFTs are unique crypto tokens that cannot be replicated. NFTs can only get accessed by someone through a private key or password. Now you may think about where should I store my NFTs? To include NFTs in your estate, you must ensure that your unique passcode or private key to access NFTs is securely passed to the future beneficiary. To make this process easier, consult a digital executor separately who is well versed with crypto. A trusted digital legacy is a safe place to store all your valuable information.

You must clearly state the plan for exactly when (and how) your NFTs should be passed to your inheritor after your demise. Without all these instructions, you likely risk the crypto assets or NFTs being liquidated.


Although the crypto platform is evolving rapidly, having a proper estate plan to protect your crypto assets is critical when you pass away. An up-to-date estate plan is crucial for everyone, but it can be a little critical for crypto owners who don’t want their beneficiaries to lose access to their crypto holdings. Now that you’ve learned what happens to your crypto when you die and how you can secure them safely for the sake of your loved ones, the next step should be to get started on making a Digital Estate Plan for your digital and crypto assets.   

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