As cryptocurrencies continue to reshape the financial landscape, they also raise new legal questions—especially in the realm of estate planning. One of the most pressing questions today is: Can cryptocurrency be inherited? The answer is yes—but with important legal and technical caveats. Here’s what you need to know if you’re holding crypto or planning to pass it on to heirs in Missouri or anywhere in the U.S.
Cryptocurrency Inheritance: A New Legal Frontier
Unlike traditional financial assets, cryptocurrencies are decentralized and secured by private keys. This means:
There’s no central institution to call if access is lost.
No paper trail exists unless you create one.
Access keys or seed phrases are essential for retrieval—without them, the assets may be unrecoverable.
Legally, however, cryptocurrencies are considered property, meaning they can be transferred through a will, trust, or probate proceeding.
Federal Law: IRS and Cryptocurrency as Property
At the federal level:
The IRS treats cryptocurrencies as property for tax purposes.
When inherited, digital assets are eligible for a step-up in basis—the cost basis resets to the fair market value at the time of the original owner’s death.
This potentially reduces capital gains taxes if the beneficiary later sells the crypto.
Estate tax may apply if the total value of the estate exceeds federal exemption thresholds (as of 2025, approximately $13 million for individuals).
Cryptocurrency Inheritance Under Missouri Law
Missouri doesn’t have cryptocurrency-specific statutes, but its Probate Code governs the distribution of personal property—including digital assets. Key points:
Crypto is legally recognized as personal property.
It is subject to the probate process unless transferred via a trust or designated beneficiary arrangement.
Access issues may arise if the decedent did not leave instructions for how to retrieve the cryptocurrency.
⚠️ Common Challenge:
If the executor doesn’t have the private keys or digital wallet credentials, they may be unable to access the crypto—even with legal authority.
Best Practices: Estate Planning for Crypto Holders
To ensure your digital wealth is passed on properly:
Create a digital asset inventory listing wallet types, exchanges, assets, and estimated values.
Secure your private keys or seed phrases in a password manager, physical safe, or encrypted file.
Leave access instructions in a secure location—separate from your will, which becomes public record.
Consult an estate planning attorney to incorporate crypto assets into your estate plan legally and securely.
⚖️ Tip: Consider using a revocable living trust to keep your crypto out of probate and simplify the transfer process.
Conclusion
Yes, cryptocurrencies can be inherited under both federal and Missouri law. But unlike traditional assets, inheriting crypto isn’t just a legal issue—it’s a technical one, too. Without proper planning, digital assets can be lost forever. If you hold cryptocurrencies, now is the time to make them part of your estate plan. And if you’re managing an estate that includes crypto, seek legal guidance to avoid costly mistakes.
Tags:
#CryptocurrencyInheritance #EstatePlanningMissouri #CryptoLaw #DigitalAssets #BitcoinEstatePlan #IRScrypto #ChadMannLaw #InheritanceLaw
