An executor's job with a bank account is straightforward: write to the bank, receive a date-of-death balance, close the account. Cryptocurrency breaks each step. There may be no institution to write to. The assets may sit in several wallets, on several networks, some of them inside applications rather than as plain balances. And the only evidence of what existed is a public ledger that the executor cannot read.
This guide sets out the questions an executor, probate solicitor or family member needs answered, and how each is answered from the chain.
Four questions
- What wallets and accounts existed?
- What did each one hold at the date of death?
- What was that worth, in pounds, on that day?
- Can anyone actually reach it?
The order matters. Valuation is meaningless until the inventory is complete, and the inventory is rarely complete on the first pass.
1. Finding the wallets
Start with what the family knows: exchange accounts (Coinbase, Kraken and similar are the usual entry points in the UK), any hardware wallet found among the possessions, wallet apps on a phone or laptop, and any addresses written down or saved in notes.
Exchange accounts are dealt with like bank accounts: the exchange has a bereavement process and will provide a statement and a balance. The statement is also the map to everything else, because every withdrawal from the exchange went to a wallet address, and each of those addresses is a starting point.
From those starting points, the ledger does the rest. Every address the deceased's wallets sent funds to is visible. Most are exchanges, merchants or applications. Some are other wallets belonging to the deceased: an address that received transfers repeatedly and sent nothing back, or an address funded once, shortly after it was created, from a known wallet. Each of these is added to the inventory with the reason it was included, so it can be confirmed or challenged.
Two places are easy to miss:
- Other networks. The same address often exists on several networks (Ethereum, Base, Arbitrum, Polygon and others share an address format). A wallet that looks empty on one may hold assets on another.
- Positions inside applications. Assets deposited into a staking or lending protocol are no longer in the wallet as a balance. The wallet holds a receipt token instead, or nothing visible at all, while the value sits in the application's contract. These positions are real and recoverable, and they are the most commonly overlooked part of an estate.
2. Balances at the date of death
A blockchain is a record of every past state, not just the current one. The balance of any address at any past moment can be read exactly, by finding the block closest to the date and time in question and querying the state at that block. Nothing has to be estimated or reconstructed.
For each wallet in the inventory, the statement lists every asset held at that block, including assets held through staking and lending positions, valued on the underlying asset. Movements shortly before and after the date are listed separately, because a family, a co-executor or a court may need to know whether anything was moved.
3. Valuation
For inheritance tax, the estate is valued at the date of death. Cryptoassets are valued like any other property: at their market value on the day. In practice that means a price from a named source at or around the time of death, converted to sterling at the day's exchange rate. Where an asset trades on several venues the report states which price was used and why.
Some assets have no dependable price: a token with almost no trading, or a position in an application that cannot be unwound at a quoted rate. An honest statement says so and gives what can be said, rather than inventing a figure. Whether a valuation is accepted by HMRC or a court is for the professional relying on it, which is why the source and the method must be on the page.
4. Reaching the assets
This is where crypto differs most from a bank account. Knowing that a wallet holds value is not the same as being able to move it. Only the private key can do that, and the key is whatever the deceased kept: a hardware device and its PIN, a recovery phrase written on paper, or a wallet app on a locked phone.
A holdings statement therefore records, for each wallet, whether control has been evidenced. Where a device or phrase has been recovered, the executor or a technical adviser can sign a short message from the wallet to prove it, without moving anything. Where nothing has been found, the statement still records what the wallet held, and states that control could not be evidenced. Both facts matter: one for the estate accounts, the other for deciding whether recovery efforts are worthwhile.
Assets held on an exchange are the exception. They are reached through the exchange's bereavement process, like a bank.
Mistakes that cause delay
- Valuing what the family knows about, rather than what existed. The inventory step is skipped and undeclared wallets or application positions surface later.
- Using today's balance and today's price. Both can differ enormously from the date of death.
- Treating an empty-looking wallet as empty. Check every network and every application the wallet interacted with.
- Moving assets before recording them. Once funds are consolidated the date-of-death position becomes harder to evidence. Record first.
- Sharing a recovery phrase with anyone. A phrase is the asset. A legitimate adviser never needs it to produce a statement.
What a good statement contains
For an executor or their solicitor, a usable document has: the full inventory of wallets and accounts with how each was found; balances per asset per wallet at the date of death, including application positions; a valuation in sterling with the price source for each asset; a note on control for each wallet; movements around the date; and a plain statement of limits, in particular any wallet or network that could not be checked.
That document is what Lucidblock's holdings statement is. It is not a valuation opinion in the professional sense and it is not legal or tax advice. It is the evidence those professionals need in order to give theirs.