Someone has died. You are the executor. And somewhere in the inventory of their life — between the bank statements and the car title and the storage unit — you have reason to believe they owned Bitcoin.
Maybe they mentioned it. Maybe you found a small device that looks like a USB drive. Maybe there is a Coinbase or Cash App confirmation in their email. Maybe a family member told you they were “into crypto.” Whatever the trigger, you are now responsible for an asset class that most attorneys, most accountants, and most executors have never handled.
Here is what you need to know. I am a California-licensed attorney (Bar #343622) and a solo Bitcoin miner. I hold my own keys, run a full node, and advise on exactly this situation. This guide is the practical version — what to do, in what order, starting right now.
The First Rule: Secure, Do Not Move
Before you do anything else, internalize this principle: do not attempt to transfer, sell, or move any cryptocurrency until you understand what you are dealing with.
Bitcoin transactions are irreversible. If you send Bitcoin to the wrong address — because you mistyped a character, because you fell for a phishing site, because you did not understand the software — that Bitcoin is gone. There is no chargeback. There is no fraud department. There is no “undo.”
The Bitcoin has been sitting in its current location since the holder’s death. It can sit there longer. Weeks, months, even years. It is not losing value because it is not being moved (it may gain or lose market value, but that happens regardless of where it sits). The risk is not delay. The risk is acting without preparation.
Your job in the first 48 hours is to find and secure, not to transfer.
How to Identify Bitcoin Holdings
The deceased’s Bitcoin could be held in several ways, and your investigation should cover all of them. Here is what to look for:
Physical Indicators
- Hardware wallets: Small devices that look like USB drives or small calculators. Common brands include Ledger (black, rectangular, small screen), Trezor (white or black, small screen), Coldcard (rectangular with a numeric keypad), and BitKey (small, rounded, no screen). These devices store private keys. They are critically important. Do not plug them in, do not guess PINs, do not try to access them. Secure them in a safe or locked drawer.
- Seed phrase backups: A list of 12 or 24 English words, usually written on paper or stamped into metal plates. The words will be from a standardized list and will seem random: “abandon ability able about above absent absorb abstract…” If you find something like this, it is the key to the Bitcoin. Treat it like cash. Do not photograph it. Do not type it into a computer or phone. Do not share it with anyone. Lock it in a safe immediately.
- Metal backup plates: Stamped or etched metal cards or plates with words or characters on them. These are durable seed phrase backups designed to survive fire and water. Same security precautions apply.
- Paper wallets: Pieces of paper with QR codes and/or long strings of letters and numbers. These are older-style Bitcoin wallets. Secure them the same way.
- Mining equipment: ASIC miners (noisy, boxy electronics with fans) or GPU rigs (computers with multiple graphics cards). These generate Bitcoin but do not necessarily store it — the mined Bitcoin goes to a wallet. The mining hardware is an asset itself, but the Bitcoin it produced is elsewhere. Check associated wallet addresses.
Digital Indicators
- Exchange accounts: Search the deceased’s email for messages from Coinbase, Kraken, Gemini, Binance.US, Cash App, Strike, River, Swan Bitcoin, or any other cryptocurrency exchange. These are custodial accounts — the exchange holds the Bitcoin on the user’s behalf. This is the simplest case for an executor because you will work with the exchange’s inheritance department.
- Wallet software: Look for apps on the deceased’s phone or computer. Common ones include Sparrow, BlueWallet, Electrum, Muun, Phoenix, Nunchuk, Casa, and Bitcoin Core. If the deceased ran Bitcoin Core, they likely operated a full node and may have significant technical sophistication — look for more complex setups like multisig.
- Financial records: Check bank and credit card statements for purchases from cryptocurrency exchanges. Look for wire transfers or ACH payments to companies like Coinbase, Kraken, or River. Check PayPal and Venmo histories for Bitcoin purchases.
- Tax returns: IRS Form 8949 reports cryptocurrency sales. Schedule D shows capital gains from crypto. If the deceased filed these forms, they had cryptocurrency at some point. Check prior years — they may have sold some but held the rest.
- Notes and documents: Check the deceased’s safe, filing cabinet, desk drawers, and digital files for any document labeled as a “digital asset memorandum,” “crypto instructions,” “heir letter,” or similar. Some holders leave detailed instructions. If you find one, follow it carefully — it was written for exactly this situation.
Understanding What You Found
Once you have completed the inventory, you are dealing with one or more of these custody situations:
Situation A: Exchange-Held Bitcoin
The Bitcoin is held by a company (Coinbase, Kraken, Gemini, etc.). This is the most straightforward scenario. The exchange has the Bitcoin in their custody. You need to go through their inheritance process to have the account transferred or liquidated.
What you will need:
- A certified copy of the death certificate
- Letters testamentary or letters of administration (from the probate court)
- Government-issued ID for the executor
- The account holder’s full name, email address, and any account identifiers
Contact the exchange’s support team and ask for their “deceased account holder” or “estate” process. Every major exchange has one. It will take time — weeks to months — but the process is institutional and documented.
Do not attempt to log into the account using the deceased’s credentials. This may violate the exchange’s terms of service, and any transactions you execute on a deceased person’s account without proper estate authority could create legal complications.
Situation B: Self-Custody Bitcoin (You Have the Seed Phrase)
The Bitcoin is held in a wallet controlled by a private key, and you have access to the seed phrase (the 12 or 24 words). This means you have — or can reconstruct — full access to the Bitcoin. This is powerful and dangerous.
Do not rush. Before you attempt any recovery or transfer:
- Verify you are using legitimate software. Download wallet software only from official sources. Double-check URLs character by character. Phishing sites that mimic wallet software are extremely common.
- Use a clean, secure computer. Ideally a dedicated device that has not been used for general web browsing. Malware can intercept seed phrases entered into compromised machines.
- Verify the balance before moving anything. Import the seed phrase into a wallet application in “watch-only” mode first if possible, or use a block explorer with the wallet’s public addresses to confirm the balance.
- When you are ready to transfer, send a small test transaction first. Send a trivial amount to the destination address and confirm it arrives. Then send the rest.
If the heir letter or instructions mention a “passphrase” or “25th word,” you need that additional passphrase to access the correct wallet. A seed phrase with a passphrase will show a different (often empty) wallet when entered without the passphrase. If you see an empty wallet, the passphrase is likely the issue.
Situation C: Self-Custody Bitcoin (You Do NOT Have the Seed Phrase)
This is the hardest scenario. The Bitcoin exists (you can see the hardware wallet, or you know from records that it was purchased), but you do not have the private key material needed to access it.
Search thoroughly before concluding the seed phrase is lost:
- Check every safe, drawer, filing cabinet, and lockbox
- Check safe deposit boxes at all banks the deceased used
- Check with the deceased’s attorney — they may have a sealed envelope or digital asset memorandum
- Check with trusted family members — the deceased may have shared key material
- Check for metal backup plates (check toolboxes, safes, even freezers — some people store metal backups in unusual locations)
If you have the hardware wallet but not the seed phrase, the situation depends on the device. Some hardware wallets allow a limited number of PIN attempts before wiping. Do not guess. If you can determine the correct PIN (check for written notes, common PINs the deceased might have used), you can access the wallet directly. If you cannot, the seed phrase backup is your only path.
If the seed phrase is truly lost and no backup exists, the Bitcoin is likely unrecoverable. This is the harsh reality of self-custody. There are services that claim to recover lost cryptocurrency — some are legitimate (particularly for partially known seed phrases or passwords), but many are scams. Exercise extreme caution. Never send Bitcoin to someone who claims they need it to “unlock” or “verify” your wallet. That is always a scam.
Situation D: Multisig Configuration
If the deceased used a multisignature setup, you need to identify how many keys are required and where they are held. Look for documentation referencing “multisig,” “2-of-3,” “3-of-5,” or names like Casa, Unchained, or Nunchuk. A multisig wallet requires cooperation from multiple key holders. Identify the other key holders — the deceased’s estate plan should specify who they are.
How to Verify Balances Without Touching Private Keys
You can check a Bitcoin address balance without needing any private key. If you have a Bitcoin address (a string starting with “1”, “3”, or “bc1”), you can look it up on a block explorer — a public website that shows all Bitcoin transactions.
Reputable block explorers include mempool.space, blockstream.info, and blockchain.com/explorer. Enter the address, and you will see the current balance and transaction history. This tells you how much Bitcoin is there and when it last moved.
If you have a hardware wallet with a known PIN, you can plug it in and view the balance on the device screen without signing any transactions. Viewing is safe. Signing is the irreversible step.
If the deceased used wallet software on their computer (like Sparrow or Electrum), you can open the software and view the balance without sending anything. The wallet will show the balance and transaction history.
When and How to Transfer
Do not transfer Bitcoin until:
- You have legal authority (letters testamentary, court order, or trust provisions)
- You have identified all holdings and verified all balances
- You have determined the correct destination (the heir’s wallet, an estate account at an exchange, or a trust wallet)
- You have consulted with a tax professional about the tax implications of the transfer
When you are ready:
- Double-check the destination address. Copy-paste it. Verify the first four and last four characters visually. Clipboard malware exists that swaps Bitcoin addresses. Some people verify using a separate device.
- Send a small test transaction first. Send a minimal amount — a few dollars’ worth — and confirm it arrives at the destination. Wait for at least one confirmation on the blockchain (typically 10–60 minutes). Then send the remainder.
- Set an appropriate transaction fee. Bitcoin transaction fees vary based on network congestion. Check mempool.space for current fee estimates. Unless the transfer is time-sensitive, a medium-priority fee is appropriate. Do not overpay, but do not set the fee so low that the transaction takes days to confirm.
- Document everything. Record the transaction IDs (TXIDs), the amounts, the dates, the destination addresses, and the fair market value of the Bitcoin at the time of transfer. You will need this for the estate accounting and for tax filings.
Scam Awareness
If the deceased held significant Bitcoin, scammers may already know. Death notices are public. Probate filings are public. Scammers actively target executors and grieving families. Know the common attacks:
- “Recovery service” scams: Someone contacts you claiming they can recover lost cryptocurrency for a fee. They ask you to send Bitcoin to a “verification address” or to share your seed phrase. This is always a scam. Legitimate recovery services work on partial information (corrupted seed phrases, partially known passwords) and never ask you to send funds first.
- Phishing websites: Fake versions of legitimate wallet websites or exchanges. The URL will be slightly different — one letter off, a different domain extension. Always type the URL directly or use a bookmark. Never click links in emails.
- Impersonation: Someone claiming to be from Coinbase, from the IRS, from a law firm, from a “cryptocurrency inheritance company.” Verify independently. Look up the company’s real phone number and call them. Do not use contact information provided by the person who contacted you.
- “Send Bitcoin to receive Bitcoin” scams: No legitimate process requires you to send Bitcoin in order to receive Bitcoin. Ever.
Tax Basics: Stepped-Up Basis
This is the good news, relatively speaking. Under current U.S. tax law, inherited assets receive a “stepped-up basis.” This means the heir’s cost basis for the Bitcoin is the fair market value on the date of the decedent’s death (or the alternate valuation date, if elected).
Example: The deceased bought 1 BTC in 2015 for $300. On the date of death, 1 BTC is worth $85,000. The heir’s cost basis is $85,000, not $300. If the heir sells immediately at $85,000, the capital gain is zero. If the heir holds and sells later at $95,000, the capital gain is $10,000.
This can result in significant tax savings, particularly for Bitcoin acquired years ago at much lower prices. Document the fair market value on the date of death carefully — use a reputable price source (CoinDesk, CoinGecko, or the exchange rate from a major exchange) and record it in the estate records.
Note: The stepped-up basis applies to assets included in the decedent’s gross estate. If the Bitcoin was held in certain trust structures, the basis treatment may differ. Consult with a tax professional for your specific situation.
For estate tax purposes, Bitcoin is property and is valued at fair market value as of the date of death. The federal estate tax exemption is currently high enough that most estates will not owe estate tax, but if the total estate (including Bitcoin at date-of-death value) exceeds the threshold, estate tax may apply.
When to Get Professional Help
You should consult with an attorney experienced in cryptocurrency estate matters if:
- The Bitcoin holdings are substantial (the threshold is subjective, but I would say anything above $50,000 warrants professional guidance)
- You cannot locate the private keys or seed phrase
- The custody arrangement is complex (multisig, multiple wallets, DeFi positions)
- There are multiple heirs with competing claims
- The deceased was engaged in mining, staking, or other activities with ongoing tax implications
- You are unsure about the tax treatment
- You are being contacted by people claiming to help with “crypto recovery”
Do not attempt to handle complex cryptocurrency estate matters alone. The irreversibility of Bitcoin transactions means that mistakes are permanent, and the technical complexity exceeds what most executors — even technically competent ones — should handle without guidance.
Next Steps
If you are an executor dealing with a deceased person’s Bitcoin, the Executor Technical Guide in our Bitcoin Inheritance Kit walks you through the full process step by step — from identifying holdings to verifying balances to executing transfers safely. It is written for non-technical people who need to handle this correctly.
If the situation is complex or the holdings are significant, book a consultation. I work with executors, trustees, and families navigating exactly this situation. We will get the Bitcoin where it needs to go — safely, legally, and without permanent mistakes.
Asaf Fulks is a California-licensed attorney (Bar #343622), solo Bitcoin miner, and full node operator. He advises executors, trustees, and families on cryptocurrency inheritance, estate administration, and digital asset security at asaffulkslaw.com.