How to address cryptocurrency in your estate planning


by Daren Givoque, Financial Advisor, O’Farrell Financial Services

As a Financial Advisor I help clients with estate planning, which includes identifying their assets and determining how the assets will be transferred to their heirs when they pass away.

Recently, I was helping one of my clients, Brian, gather the items he needed to build a solid plan for his estate. While reviewing his assets, Brian mentioned that he had money tied up in cryptocurrency. He wondered how to ensure these assets would be transferred to his wife and kids.

Cryptocurrency has been on the market for the past decade, starting with Bitcoin in 2009. According to, there are over 3000 types of digital currencies in existence, grouped into three categories: altcoins, tokens, and Bitcoin. Simply stated, cryptocurrency is an internet-based financial transaction between two parties, using digital cash.

Once a cryptocurrency account is created, a private digital key is generated. Only the owner has access to the key and the funds in the account. Storing the key safely is essential for maintaining the account’s security and ensuring the owner continues to have access to the funds.

I told Brian that we could address cryptocurrency in his estate plan in two ways:

  1. Treat cryptocurrency like any other digital asset (online trading accounts) and draft authorization in the will/POA for the executor or attorney to deal with the account; or
  2. Create a separate memorandum identifying the type of cryptocurrency held, and where it is stored. I recommend this route because, if the private key information is in the will itself, it becomes part of the public record through the probate process, potentially exposing sensitive information that could put the asset at risk.

Since anyone with the private key can access a cryptocurrency account, it is important to store it securely. I recommended that Brian use a third-party service to manage his private key, entrust it to a family member or advisor, or keep it on a thumb drive in a safety deposit box to ensure the cryptocurrency can be accessed by executors, attorneys and/or heirs.

A more unconventional option is something called a “dead man’s switch”- an automated program that emails the user at specific times. If it doesn’t hear back, it will check death records and, if you have died, will transfer the value of your cryptocurrency into a specified account. This can be anyone, but is often the account of the executor, who will oversee the distribution of the estate to any heirs.

Cryptocurrency is a unique asset and I understand the nuances and complexities of planning how to pass it on to the next generation safely and effectively. I was able to work with Brian to create a plan that he was comfortable with and that would ensure the value of his cryptocurrency will be transferred to his loved ones.

If you have questions, please reach out to us! See our ad in this week’s North Grenville Times and follow us on Facebook @OFarrellFinancialServicesInc.


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