Crypto in an estate: access, valuation and division
Date: | Week 27 | Reading time: 7 minutes | Updated: Author: Tyler Dijst
In short
Crypto in an estate needs three answers: what did the person who died own, can the heirs get at it, and what was it worth on the date of death. Sometimes access is quite possible; sometimes the holdings can only be shown to exist. Paucitas works through it calmly with you.
Paucitas is an independent expert firm in the Netherlands that has been establishing legitimate crypto assets since 2021. We work alongside the solicitor or executor and provide an overview they can build on.
Get in touch with Paucitas or ring +31 20 244 5774, 24/7. Even if you only have a suspicion, we are happy to think it through with you.
In a nutshell
Crypto does not appear on a bank statement and often stays invisible without targeted steps. Throw nothing away and change nothing on devices or accounts. Paucitas maps what is there, looks into access and records the value as at the date of death.
Someone dear to you has died, and you know they "did something with bitcoin". There is no password, no wallet address and no overview. Alongside the grief comes a question you have no experience with. That is a lot at once.
This blog explains how it works in broad terms, which first steps are sensible and where Paucitas helps.
Crypto in an estate: where do you start?
With a bank account you ring the bank. With crypto there is no single institution that can give you a balance, and no central place where everything is listed. Even so, a structured approach is quite possible. It starts with separating what you already know from what is still unknown.
Known holdings are anything with concrete clues: a hardware wallet in a drawer, an email from an exchange, an app on a phone. Unknown holdings are harder, but rarely impossible to find. Clues are often in bank statements, the inbox or loose notes. Paucitas brings that together into one overview. More on that approach is in mapping out crypto assets.
What should you do first?
- Keep all devices: old phones, laptops, USB-style gadgets and hardware wallets.
- Do not throw away papers, including notes with lists of words. That may be a recovery phrase.
- Do not change passwords or accounts and do not try to log in to unknown platforms yourself.
- Never share a seed phrase or private key with anyone who approaches you.
The more traces stay intact, the more complete the overview will be. Not sure whether something matters? Get in touch with Paucitas and simply ask.
Can the heirs get at the crypto?
That depends on what can still be found. A wallet is protected by a private key or a seed phrase. If those can be found in full or in part, or there is a file, a note or some other lead, access to holdings the heirs are lawfully entitled to is often quite possible. Paucitas helps with that and tells you honestly up front what is achievable.
If there is no lead at all, the holdings can sometimes be shown to exist but not accessed. That too is valuable clarity, for example for the distribution. Crypto on an exchange is different: access usually runs through the exchange itself, with the grant of probate or, in Scotland, confirmation.
An example from practice
A daughter knew her father had held bitcoin for years, but after his death she found only a hardware wallet and a notebook with notes. The solicitor dealing with the estate needed an overview for the distribution.
Paucitas mapped which addresses belonged to the wallet and which transactions had taken place. The notes turned out to contain enough to make the wallet accessible again. Paucitas then recorded the value as at the date of death. The solicitor could proceed with one clear report.
Paucitas takes privacy very seriously and never shares clients' personal details. This is a composite example: names, amounts and details have been changed. The situation is one we see in practice.
How is crypto valued on death?
For the estate, what counts is not today's value but the value on the date of death. Crypto prices move sharply, so that moment matters a great deal. Paucitas records the quantity of each coin and the price on the date of death, with the source used. That gives a valuation the executor or solicitor can account for. GOV.UK explains how to go about valuing the estate of someone who has died; Inheritance Tax must be paid by the end of the sixth month after the death to avoid interest.
This is factual support, not tax advice. Which value goes into the return is for you and your tax adviser. Legal questions about the distribution belong with the solicitor.
After the inheritance: tax and your bank
If you later sell inherited crypto, tax may be due on any gain; see GOV.UK on tax when you sell cryptoassets. If you convert crypto to pounds, your bank will almost always ask where the money came from. An inheritance is a good source, provided you can show it: keep the grant of probate or confirmation, the estate overview and the valuation together. See also the origin of crypto: what your bank wants to see.
How does Paucitas work with the solicitor and executor?
The executor or solicitor needs a complete overview that can be checked. Paucitas provides that as an independent party: which holdings have been established, what value belongs to them and what the status of access is. All in a report anyone can follow and understand step by step. Paucitas does all its tracing itself, without tracing tools. To do so, Paucitas looks beyond the blockchain: we also go through documents, emails, notes and other communication, so that a complete picture emerges, with a timeline and where the assets are, step by step.
That keeps the roles clear: Paucitas provides the facts, the executor administers the estate and the tax adviser handles the returns. If you later need to show where your wealth came from, the same report helps. More on that in proving the origin of assets.
What does an investigation cost and how quickly can you get help?
- Costs: every investigation is tailored. You receive a bespoke quote in advance, which we go through together, so there are no surprises.
- Turnaround: from the same day to around two weeks.
- Contact: you can ring at any time, 24/7. We answer the form within 1 to 3 hours, and email within 24 hours, usually the same day.
Suspect there is crypto in an estate? Get in touch for a free intake, or ring +31 20 244 5774. More on legal situations is in crypto in divorce and legal matters.
Sources: GOV.UK, valuing the estate of someone who died; GOV.UK, tax on cryptoassets.
Do you have questions about this blog?
Feel free to get in touch with Paucitas. Paucitas can be reached by phone 24/7, including evenings and weekends. Through the contact form we usually reply within 1 to 3 hours, and we answer e-mail within 24 hours.
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Frequently asked questions about crypto in an estate
How do I know whether there is crypto in the estate?
Paucitas advises looking for traces: payments to exchanges on bank statements, emails from exchanges, wallet apps, hardware wallets and notes with lists of words. Paucitas links those clues to the blockchain and produces one overview.
Can we access the crypto without a password?
Paucitas finds that it is sometimes possible. If there is a recovery phrase, a file or a note, even a partial one, access to holdings you are lawfully entitled to is often possible. Paucitas tells you honestly up front what is achievable.
Which value counts for the crypto?
Paucitas explains: the value on the date of death counts. Paucitas records the quantity of each coin and the price on that date, with the source. Which value goes into the return is for you and your tax adviser.
Does Paucitas work with the solicitor or executor?
Paucitas can help with that and provides the overview of holdings, access and value to the solicitor or executor. Paucitas does not give tax or legal advice.
What should I leave alone for now?
Paucitas advises: do not throw away devices or papers, do not change passwords and do not log in to unknown platforms yourself. Never share a recovery phrase with anyone who approaches you.
From Amsterdam, for the whole of the UK
Everything can be done fully online. Prefer to meet in person? You are very welcome at our office in Amsterdam, by appointment.
Paucitas is an independent expert firm based in the Netherlands that, for clients across the UK, investigates investment fraud and crypto fraud, establishes the origin and legitimacy of crypto assets and prepares expert reports for legal proceedings and compliance.
Your own situation
If you are reading this, you probably have a question about your own situation. That is exactly what Paucitas does.
The first step is contact by phone. You can book that call by phone or through the contact form, so you do not have to wait. In the call we look together at what can factually be established in your case and what Paucitas can examine for you.