What Happens to Cryptocurrency When Someone Dies in Florida?
As digital assets like Bitcoin, XRP, and other cryptocurrencies become more common, many people ask: What happens to crypto when someone dies in Florida? Unlike traditional bank accounts, crypto assets don’t come with an account number or a helpful branch manager. They're governed by private keys, password protection, and often hidden in places loved ones may not even know exist.
In this blog, we’ll cover how Florida’s probate system treats cryptocurrency and practical tips for heirs and personal representatives tasked with managing these digital assets.
Where Crypto Assets Are Likely to Be Held
A. Hot Wallets (Online)
These include accounts on exchanges like:
Heirs may find these by checking the decedent’s email accounts for welcome emails, 2FA prompts, or transaction notifications. Bank statements might also show ACH transfers to these exchanges. These accounts are more like traditional investment accounts and can be treated as such by the Courts.
B. Cold Wallets (Offline or Self-Custody)
Cold wallets are physical devices or paper keys kept offline for security. These include:
- Hardware wallets like Ledger or Trezor;
- Paper wallets (just a printed QR code or phrase);
- Encrypted USB drives.
These are often stored in:
- Safe deposit boxes;
- Personal safes;
- With estate planning documents;
- Hidden or stored in the home.
If you’re an heir, look for small USB-sized devices labeled “Ledger,” “Trezor,” or handwritten phrases that may resemble a series of 12 or 24 random words—these are often recovery phrases (or "seed phrases").
Passwords and Access Clues to Watch For
Crypto assets that are in a cold wallet are secured by private keys and passwords that must be known to access or transfer them. Without them, they are probably lost forever.
Heirs should search for:
- Password managers (like LastPass, 1Password);
- Seed phrases – often handwritten and labeled as “wallet recovery,” “12-word backup,” or “crypto seed”;
- PINs or passphrases associated with hardware wallets;
- Authenticator apps (Google Authenticator, Authy);
- Notes or secure folders labeled "crypto," “wallet,” “BTC,” etc.
Important: It is critical for heirs not to tamper with cold wallets before consulting an attorney or crypto-savvy advisor—mistakes can irreversibly erase access. Also, maintain access to the deceased’s phone and computer for as long as possible.
How Florida Probate Attorneys Handle Crypto Assets
When an estate is opened, crypto assets are treated as property, much like stocks or personal valuables. However, their unique nature requires special handling. Steps a probate attorney may take include:
- Identifying and inventorying the crypto using wallet addresses, exchange accounts, or physical devices;
- Valuing the assets as of the decedent’s date of death (using fair market prices from reputable exchanges);
- Securing the assets — possibly transferring them to a secure estate-controlled wallet or escrow;
- Liquidating them only if needed;
- Distributing or selling per the will or intestate laws.
Attorneys often partner with a crypto custodian, licensed digital asset manager, or specialized CPA to assist in the valuation and transfer. The personal representative may need to get a court order to access exchange accounts. Most exchanges require probate court documents, a death certificate, and proof of executor status.
Do Crypto Assets Have to Be Liquidated in Probate?
No. Crypto assets do not have to be liquidated in Florida probate unless:
- The will explicitly directs liquidation;
- The estate needs funds to pay debts, taxes, or administration expenses;
- The beneficiaries agree to liquidate and split the proceeds.
Otherwise, beneficiaries can receive the crypto in-kind (i.e., the actual digital currency), preserving potential long-term value or tax strategy. This is similar to how you might inherit shares of Apple stock instead of cashing them out.
Tax Note
Crypto is treated as property by the IRS. The date-of-death value becomes the beneficiary’s basis—meaning, if they later sell, only gains from that date forward are taxable.
Final Thoughts: Don't Let Crypto Get Lost
The biggest risk with crypto inheritance is lack of awareness and access. No matter how many coins someone held, they are worthless if no one knows they exist—or if the private keys are lost.
Tip: The best move if you are a crypto holder is to incorporate digital asset planning into your estate documents now. If you're an heir or personal representative, work with an attorney who understands the nuances of crypto and probate.
If you’re administering a Florida estate with crypto assets—or just planning ahead—contact Hogan & Hogan. We stay current with evolving digital estate trends so your assets don’t vanish into the blockchain void.
