What happens to digital assets when someone dies?

They form part of the estate like other property, but the executor can only deal with them if they can find them and access them. Without records, keys or account details, they may be lost for good.

Should a will include a recovery phrase or password?

Generally not. A will may be seen by several people once it is acted on. Families usually discuss with their lawyer how to record where assets are and how access is arranged, without putting secrets in the will itself.

Can an exchange account be passed to family?

Exchanges usually have a process for deceased estates that asks for documents such as a death certificate and probate. Each platform's process differs, so records of which platforms were used matter.

What is an enduring power of attorney for, with digital assets?

It lets someone you choose manage your financial affairs if you lose capacity. Whether and how it covers digital assets is worth raising with a lawyer, along with how that person would get access.

How can I teach my children about digital assets?

Many families start with how money works and why it loses value, then cover security habits and scams, before any detail about specific assets. Plain-English material that grows with them helps.

Legacy

Digital assets and family legacy

Generational wealth is about more than what you own. It depends on what the next generation can find, access and understand. Digital assets make that harder than most people expect.

Thinking about legacy and generational wealth

For many families, legacy means leaving the people they love better prepared than they were. That includes assets, but also knowledge: how money works, how to make careful decisions and how to avoid costly mistakes. Wealth passed on without that understanding is easier to lose.

Long-term thinking also means planning for things that are uncomfortable to think about, such as illness, loss of capacity and death. With traditional assets there is a well-worn path: banks, registries, share registers and land titles all have processes for estates. With digital assets that path is much less clear.

Why digital assets inheritance is hard

A digital asset is controlled by whoever holds its private key. There is often no bank to call and no registry to search. If nobody knows the assets exist, or nobody can access them, they can be lost permanently.

Keys: assets held in self-custody can only be moved with the private key or recovery phrase. If it is lost, there is usually no way to restore it.
Access: devices, passwords and two-factor codes can lock out an executor even when they know an account exists.
Records: holdings may be spread across several exchanges and wallets, with no single statement that lists them.
Security: the information that lets family access assets is the same information a thief would want, so it has to be stored with care.
Tax: records of what was bought, when and for how much are needed to work out tax, both during life and for the estate.

Our free guides cover the security basics, and digital assets explained describes the difference between holding assets on an exchange and in self-custody.

Estate planning questions to discuss with a lawyer

Estate law differs between states and countries, and digital assets raise questions that general information cannot settle. These are topics people commonly raise with an estate planning lawyer:

Whether the will mentions digital assets, and how it describes them without revealing keys or passwords.
Whether the chosen executor has the technical confidence to deal with digital assets, or would need help.
How a separate, secure record of where assets are held could be kept up to date and found when needed.
How an enduring power of attorney would work for digital assets if the owner lost capacity.
How holding assets personally, in a trust, in a company or in a self-managed super fund changes what happens to them.
What tax may arise when assets pass to beneficiaries or are later sold.

Assets held in a self-managed super fund follow superannuation rules on death, which are different again. Our page on digital assets and SMSFs outlines what trustees research.

Teaching the next generation

An inheritance is easier to look after when the people receiving it understand it. Many families find it works best to start early and simply: what money is, why it loses buying power over time, and why scarcity has mattered in the story of money. Our page on inflation and savings is a good conversation starter.

From there, the practical habits matter most: guarding passwords and recovery phrases, recognising scams and pressure tactics, and understanding that high-growth assets can also fall sharply. Teaching these as habits, rather than as rules, tends to stick.

Our book, Seashells to Satoshis II, tells the story of money in a way that suits readers of any age. The course pathway moves from Bitcoin foundations to long-term and legacy planning, and our savings projection tool lets a family look at long time frames together, with a crash test built in.

Questions about digital assets and legacy

What happens to digital assets when someone dies?: They form part of the estate like other property, but the executor can only deal with them if they can find them and access them. Without records, keys or account details, they may be lost for good.
Should a will include a recovery phrase or password?: Generally not. A will may be seen by several people once it is acted on. Families usually discuss with their lawyer how to record where assets are and how access is arranged, without putting secrets in the will itself.
Can an exchange account be passed to family?: Exchanges usually have a process for deceased estates that asks for documents such as a death certificate and probate. Each platform's process differs, so records of which platforms were used matter.
What is an enduring power of attorney for, with digital assets?: It lets someone you choose manage your financial affairs if you lose capacity. Whether and how it covers digital assets is worth raising with a lawyer, along with how that person would get access.
How can I teach my children about digital assets?: Many families start with how money works and why it loses value, then cover security habits and scams, before any detail about specific assets. Plain-English material that grows with them helps.