What Happens to Your Bitcoin When You Become Incapacitated or Die?

March 11, 2016
What Happens to Your Bitcoin When You Become Incapacitated or Die Megan Yip

Welcome Erica Bertorello to my blog. Enjoy her review of Bitcoin, and learn more about her work at the bottom of the article. 

Consider the following: Christian Troy is a single, successful computer executive in his forties. Christian’s two passions in life are his job and extreme mountain climbing. He has had the good fortune to work for a couple of extremely successful start-up tech companies and has become extremely wealthy. Christian decides to pour $2,500,000 USD into Bitcoin, a digital currency system. He also decides it would be a good idea to “get his affairs in order” and has an estate plan drawn up. Unfortunately, Christian’s estate planning attorney failed to instruct Christian to include the Bitcoin in his trust.

One month later, Christian goes on a mountain climbing expedition to Mount Everest. During the climb a huge avalanche whisks him off the side of mountain and he plunges to his death.

Bitcoin wallets are not bank accounts.

Traditionally when someone dies, surviving family members go through a deceased person’s belongings (e.g., the file cabinet filled with “important” papers) and watch the mail for a month or so to see what important financial documents (e.g., bank statements, bills) arrive. Using this information, it is easy to gain access to a dead loved one’s bank accounts after death and the procedure is streamlined because every jurisdiction has a clear set of rules governing this type of situation.

With a bank account, having the account name is usually sufficient. However, unlike the local bank branch down the street, families usually cannot visit a Bitcoin operator. Many Bitcoin exchanges and wallet companies are incorporated outside the U.S. without a true headquarters and are operated through virtual offices all around the world. Often times, there is nobody to contact at all and Bitcoin operators do not have access to login information.

Do you own any Bitcoin, and if so, did you include it in your estate plan?

Today, many people have gone paperless and often times financial documents, account details, records of debt and information about other assets are contained on a hard drive or in an e-mail account or cloud storage. If there is no will and no instructions, or if family members do not know if their loved one owned any Bitcoin, ascertaining whether or not the deceased had any Bitcoins or a Bitcoin wallet can be a significant challenge.

Family members may inspect smartphones or computers for valuable data, but very few people will look for Bitcoin wallets if they are not specifically told to do so. Additionally, Bitcoin wallets are tiny so they can be stored on all kinds of digital media from memory cards and USB sticks to network attached storage and cloud services, as well as in physical paper wallets.  Bottomline: Bitcoin wallets are easy to overlook.

Bottomline: Bitcoin wallets are easy to overlook

Does your estate plan include instructions regarding your Bitcoin?

Even if surviving family members realize some transactions were made to Bitcoin exchanges that might not be enough in the absence of clear instructions. Finding a Bitcoin wallet will not be of much help if it is properly encrypted and no instructions are left behind.

The easiest way for an executor, trust administrator or family member to search for a Bitcoin wallet is to see whether or not the Bitcoin application is installed on your computer.

However, accessing the Bitcoin wallet through the Bitcoin application will require your Bitcoin username and password. If the Bitcoin application cannot be located on the computer, other options include searching the computer’s hard drives for wallet software; searching browser history or bookmarks for links to online wallets and exchanges; or searching mobile devices for popular wallet applications.

However, finding a Bitcoin wallet is just the first step. The ability to control Bitcoin in a wallet is tied to a secure, cryptographic key or address and the executor, trust administrator or family member must also have this address to execute a Bitcoin transaction (e.g., exchanging Bitcoin for cash). Without the key, the Bitcoin is inaccessible and will remain lost in the Bitcoin protocol forever.

Finding a Bitcoin wallet is just the first step.

Can my executor, trust administrator or surviving family member use my username and password to log into my Bitcoin wallet?

Accessing your private computer, email or digital assets (e.g., a Bitcoin wallet) with your login name and password after you die creates another host of problems. The Computer Fraud and Abuse Act (CFAA) creates civil and criminal liability for accessing protected computers, systems or networks without authorization or in excess of authorization and obtaining information, including financial information.

Often times, authorized access does not extend beyond the account. Many service providers do not allow third parties to use someone else’s login information under the Terms of Service Agreement. If your executor, trust administrator or surviving family member uses your username and password to log into your account, he/she is violating the terms of the Terms of Service Agreement, creating potential CFAA liability.

The Department of Justice (DOJ) has taken and defended the position that violations of a service provider’s Terms of Service Agreement are actionable under the CFAA. Although DOJ does not routinely prosecute Terms of Service violations, the potential to do so is a serious threat to the people you have entrusted to administer your estate.

Currently, there are no companies that specialize in estate planning for Bitcoin, so it is up to you to plan for disposition of digital currency upon your death.

Have you made plans for your Bitcoin or other digital currency?

This post was written by Erica J. Bertorello. Erica is an experienced civil litigator with over sixteen years of practice in the areas of personal injury, medical malpractice, product liability and contract law. After witnessing a prolonged illness and decline of a close family member, followed by a lengthy, convoluted trust administration, Erica decided it was time to shift the focus of her law practice. She returned to Golden Gate University, School of Law in spring of 2014 to pursue her Master of Laws (LLM) in Estate Planning, Trust, and Probate Law. Erica anticipates opening her estate planning practice in fall of 2016. You can contact Erica at: ebertorello.esq@gmail.com

This website is intended for informational purposes only. While the information in this website is updated periodically, additional facts or future developments may affect the website’s content, and thus no guarantee is given that the information provided on this website is accurate or complete.


  1. bitcoin australia

    Definitely great post, you should also allow user content since it will also benefits to make your site more interactive and friendly which will be more favorable to Google and other search engine to find and rank your site eventually for a certain topic.


  2. Megan Yip

    Thanks for the comment, bitcoin australia. What kind of user content would you like to contribute?

  3. Bitcoin Convert

    While I am a fan of Bitcoin there are a few things about it that unnerve me. losing control of your bitcoin wallet is one of those things. There is that story about the guy who threw his old harddrive into the garbage and lost millions of dollars in bitcoin.

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