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14 February 2022 | Comment | Article by Kieran Forsyth

An introduction to cryptocurrency and its effects on wills and estates

Cryptoassets, more commonly referred to as cryptocurrencies, are digital assets. There are thousands of different cryptocurrencies around today – including Bitcoin, Litecoin and Ethereum to name just a few.

As its name suggests, cryptocurrency is a type of electronic ‘currency’ or ‘cash’ which exists on a decentralised computer network (known as a blockchain), meaning there is no central bank or government to control it or step in if something goes wrong. The use of cryptocurrencies has grown significantly in recent years, with ‘cryptocurrency ATMs’ now popping up across the world enabling users to purchase cryptocurrency on the go. Despite this, there is still little guidance on how cryptocurrency effects areas such as estate planning and estate administration. After all, the law governing these areas was not designed to deal with digital assets. What happens to cryptocurrency after you die? How, if at all, should you go about dealing with cryptocurrency in your will? This article will consider cryptocurrency alongside some of these issued faced in private client matters.

What is a blockchain?

A blockchain is a digital ledger of all transactions that take place across a global network of computers. Its primary purpose is to store and transfer data, so it can facilitate the transfer of any asset without the need of an intermediary. The blockchain technology ensures that all transactions are secure.

Most cryptocurrency transactions exist on a public blockchain; however, despite its public nature, a blockchain will not record the identity of the users making these transactions. Instead, a public key is used which becomes the user’s identity on the blockchain. As its name suggests, a public key is visible to anyone who uses the blockchain. The user’s public key can only then be accessed with its counterpart private key, meaning the cryptocurrency stored under it is secure. These features can spell disaster considering that if you do not have access to the private key then the value of the asset cannot be unlocked.

Legal nature of cryptocurrency

In the absence of any specific UK legislation governing cryptocurrency, there had been much uncertainty over the legal nature of cryptocurrency and whether it could be defined as ‘property’. Under English law, there are two types of property, being either choses in action (e.g. a personal right over a property that is capable of being enforced) or choses in possession (e.g. something a person has a right to enjoy). The difficulty is that cryptocurrency cannot be defined as either.

It was not until the 2019 case of AA v Persons Unknown & Ors, Re Bitcoin [2019] EWHC 3556 (Comm) that judicial confirmation was given by the High Court that cryptoassets, which includes cryptocurrency such as Bitcoin, are a form of property. This case confirmed the view taken in the legal statement on Crypto Assets and Smart Contracts put together by the UK Jurisdictional Task Force. The statement found that cryptoassets should not be excluded from being property on account of it being difficult to define them as either choses in action or choses in possession. The High Court in AA v Persons Unknown & Ors, Re Bitcoin even considered cryptocurrency to meet the criteria to satisfy the definition of property as set out by Lord Wilberforce in National Provincial Bank v Ainsworth [1965] AC 1175, so being (i) definable, (ii) identifiable by third parties, (iii) capable in their nature of assumption by third parties and (iv) having some degree of permanence.

How is cryptocurrency stored and accessed?

Users store their cryptocurrency in a secure ‘digital wallet’. This digital wallet can then be accessed with the user’s cryptographic keys, being the public key and private key mentioned above. There are then several ways in which users can store their digital wallet to ensure their private key is kept safe. Some users may choose to store their digital wallet personally, perhaps on a USB stick, or a Trezor (which is a form of hardware wallet), or written down on paper and stored in a safe. In other circumstances, a third party intermediary, such as a cryptocurrency bank, may be able to store the digital wallet on behalf of the user. A high percentage of cryptocurrency holders use exchanges such as Coinbase which operate to hold the value of the assets on a traditional banking system i.e., when you wish to withdraw the value they pay to you the value of the asset which they themselves hold on your behalf.

Cryptocurrency, wills and personal representatives

While the digital wallet and private key system means that a user is comfortable in the knowledge their cryptocurrency is secure, it does create potential issues on their death if their private key cannot be located. Even if a person is appointed as the personal representative of the estate or included as a beneficiary of the will, without holding the private key it will be impossible for them to access the user’s digital wallet. This means that if a person does not properly record instructions of how to access their private key on their death, their cryptocurrency cannot be recovered.

To overcome this, it is necessary to take steps to ensure that a personal representative is made aware of both the existence of the cryptocurrency and the location of the private key following the death.

While the obvious solution may seem to include instructions in the will, this may create problems if the information falls into the wrong hands before the right beneficiary has been able to access it. After all, a will becomes a public document once probate has been issued in the estate and so, if it contains instructions on how to access the cryptocurrency, this too will become public.

Instead, a more secure approach will be for the testator to prepare an inventory or account of any digital assets they own alongside their will. This can be stored securely by solicitors alongside the original will and should include details of all accounts, the relevant cryptographic keys and details of any third party intermediary who may be storing the cryptocurrency. If necessary, a separate personal representative can be appointed to deal with any cryptoassets should the testator have any concerns. This can be of real benefit given the detailed processes required in certain situation to unlock the value.

It is worth keeping in mind that a personal representative will not require a grant of probate to access the cryptocurrency (provided they have access to the private key) if the cryptocurrency was held by its owner directly, rather than through an intermediary.

Cryptocurrency and capacity

The above scenario of a personal representative being unable to access a person’s cryptocurrency can also be said for an attorney should the user lose capacity. When making a Lasting Power of Attorney, it is therefore worth considering (i) whether it is appropriate to include a specific authority for the person appointed as their attorney to be able to deal with their cryptocurrency and (ii) instructions on how to access the private key should it be necessary to do so.


The use of cryptocurrency is now well established with many individuals holding these assets privately. In the UK alone, it is thought that there are now 3.3 million people who hold cryptocurrency. Both individuals and private client practitioners must remain cautious when dealing with cryptocurrency in wills. If due care is not taken, it could prevent personal representatives from accessing the cryptocurrency, or even being aware of its existence entirely.

Author bio

Kieran Forsyth

Senior Associate

Kieran Forsyth is a Senior Associate in the Private Wealth Disputes team. He advises both on contentious and non-contentious matters. On the non-contentious side, Kieran advises on high net worth trust and estate planning matters, whilst on the contentious side, Kieran can advise on all matters of trust, will and estate disputes including Inheritance Act claims.

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