There’s no paper trail to follow when cryptocurrency wealth is created, making this new asset one with more than usual risks for the millions who have made it part of their investment strategy. As reported in a recent article from Rolling Out, “5 Devastating ways people lose their crypto forever,” there’s no customer service to call when you run into a problem. The very nature of cryptocurrency—decentralized—makes it vulnerable to loss.

Losing access to cryptocurrency can happen to owners as well as heirs, which makes it especially important to choose an executor who is conversant with cryptocurrency and provide them with all the necessary information to access and manage accounts.

Decentralized crypto accounts are secured using several different tools. A private key is like the combination used to open a safe. Private keys, seed phrases, passwords and PINS are all part of keeping crypto accounts safe. Crypto wallets are used to store the private keys, giving access to digital assets on the blockchain. The crypto wallet is like an online banking application, with the key serving as a PIN.

There are two types of crypto wallets. A software wallet is stored on a phone or computer and offers varying levels of security. A hardware drive looks like a USB drive and is considered more secure than a software wallet—unless it’s lost.

A crypto exchange is a digital marketplace where users buy, sell and trade cryptocurrencies. Think of a cryptocurrency exchange as a digital currency stock market. Hackers frequently target these exchanges because they contain vast amounts of digital currency. If an exchange is compromised and assets stolen, there’s no chance of recovery.

The technical complexity of cryptocurrency creates unique challenges for estate planning and inheritance. Unlike traditional assets, which have established legal procedures for wealth protection and transfer, cryptocurrency requires knowledge of digital currency, as well as familiarity with digital passwords, keys and wallets.

If you own cryptocurrency, you’ll want to appoint a digital executor and plan for your digital assets. Your will should not include any information about cryptocurrency holdings or digital assets. When wills are submitted to the court for probate, they become part of the public record, and anyone can access them. A separate document should be created specifically for your digital executor, listing the accounts, how they are accessed and the information or devices required to retrieve the assets. You and your digital executor should create multiple backup strategies to build redundancy, ensuring that this part of your estate can be accessed and distributed in accordance with your wishes.

Your estate planning attorney will include your digital executor in your last will and testament, as well as their responsibilities. To avoid any confusion, discuss the designation of your digital executor with the traditional executor, so they both understand their separate roles.

Reference: Rolling Out (July 16, 2025) “5 Devastating ways people lose their crypto forever”