How to Leave Cryptocurrency in Your Will (Canada)

A 41-year-old software engineer in Calgary keeps $180,000 in Bitcoin on a Ledger hardware wallet in a drawer beside his bed, with the seed phrase written on a metal plate inside a safe in his garage. He drafts a will leaving everything to his wife and adult son. The will runs three pages of careful drafting and never mentions Bitcoin once. Two years later he dies in a cycling accident, and his wife — who never used the wallet — has to figure out, from a grieving start, that the drawer device is the gateway to almost a quarter of the estate, that the metal plate in the garage is what unlocks it, and that nobody at any bank, exchange, or law firm can help her if either of those goes missing.

That is the shape of the cryptocurrency problem in Canadian estates. The legal questions are usually straightforward — crypto is property, it passes under the will like other property, and Canadian succession statutes already accommodate it.^[5] The operational questions are where estates burn money. Two failures recur: the access credentials are unfindable when the executor needs them, or the testator wrote the credentials into the will itself and the holdings disappear before probate finishes.

Both failures are preventable with a small amount of planning that separates the legal description of the holdings (which lives in the will) from the access credentials (which live somewhere else entirely).

Why crypto needs different drafting than a brokerage account #

A self-custody crypto holding is fundamentally different from a TFSA at a Canadian bank. With the TFSA, the institution is the gatekeeper — the executor presents a death certificate and grant of probate, the institution checks identification, and the assets move to the estate account. The cryptography sits inside the bank's systems. If the executor loses the account number, the bank still has it.

A self-custody crypto wallet inverts that. The cryptography is the gatekeeper. The institution — if there is one — has nothing to release. The executor needs the actual private key (or seed phrase, or hardware-wallet PIN combination) to move the assets. There is no recovery mechanism, no helpline, no court order that compels a wallet to open. If the seed phrase is gone, the holdings stay on the blockchain forever, visible to everyone, accessible to no one.

That asymmetry drives every drafting choice for crypto in a will. The will needs to describe the asset clearly enough that the executor knows it exists, but it cannot contain the credentials that would let anyone with access to the will spend the asset.

The cardinal rule — keys do not belong in the will #

A probated will in Canadian common-law provinces becomes part of the public court file.^[5] In Ontario, anyone willing to pay the search fee can request a copy of a probated will from the Estate Registry. The same is generally true in British Columbia, Alberta, and the other common-law provinces.^[6] A will that contains a seed phrase therefore amounts to a public posting of the wallet's master key — and the seed phrase keeps working from the moment the will is filed until the moment someone uses it to empty the wallet.

The fix is structural. Use the will to describe the assets, identify the location of the access credentials, and grant the executor authority to retrieve them. Keep the credentials themselves in a sealed envelope or document held outside the will, ideally in a fireproof safe, safe-deposit box, or tamper-evident document held by a trusted third party. Many testators write a letter of instruction that contains:

• a list of wallets (exchange accounts, hardware wallets, software wallets, paper wallets)
• approximate value of each at the time the letter was written
• the location of the access medium for each (PIN, seed phrase, password manager master password)
• a short technical primer for an executor who may have never used crypto before
• step-by-step instructions for moving assets to an executor-controlled wallet or exchange account

The letter is updated whenever wallets are added, balances shift materially, or access mediums move. The will simply points to it.

What the will should say #

A crypto clause in a Canadian will is usually short. It does three things — names the category of assets without exposing them, grants the executor the technical authority needed to act, and identifies where to look for the credentials.

A typical pattern reads something like this (paraphrased, not a template):

"I direct my executor to take possession of all cryptocurrency, digital assets, online accounts, and similar property in my name. My executor is authorized to access electronic devices, hardware wallets, software wallets, exchange accounts, and any associated credentials necessary to administer these assets, and to liquidate, transfer, or distribute them as part of the residue of my estate. Instructions for locating credentials are kept in a separate letter of instruction stored at [general location]."

Three observations are worth pulling out. First, the clause refers to the category of assets, not specific wallet addresses or balances — those can change. Second, the authorization language matters because some platforms read access by anyone other than the registered account holder as a Terms-of-Service breach unless the user's will or trust expressly grants the right.^[2] Third, the letter of instruction is described only by its general location, not by its specific safe combination or safe-deposit-box key.

A larger estate sometimes adds a digital executor — a person separate from the general executor who has the technical literacy to operate hardware wallets and exchange interfaces. The digital executor works under the authority of the main executor but does the hands-on work. This is optional and most useful when the general executor is not technically inclined.

Self-custody vs exchange-held crypto #

Self-custody and exchange-held crypto follow different administrative paths even though both pass under the same will.

Self-custody (you control the keys). Hardware wallets like Ledger or Trezor, software wallets like Exodus or MetaMask, or any wallet where the user holds the seed phrase. The executor needs the seed phrase or PIN to move funds. Plan in advance — without the credentials, the assets are unrecoverable.

Exchange-held (the platform controls the keys). Newton, Bitbuy, NDAX, Wealthsimple Crypto, Kraken, Coinbase, and similar platforms. The platform is custodian, and the executor follows a death-of-account-holder process much like the one used for an investment broker. Each exchange has a slightly different procedure, but the universal requirements are a death certificate, a copy of the will or grant of probate, and identification for the executor. Some platforms transfer the assets in-kind to an estate-controlled account; others insist on liquidating to fiat first. The estate keeps the proceeds and reports gain or loss on the terminal return.

A mixed portfolio is common — some BTC self-custodied, some ETH on a Canadian exchange. The will covers both, but the operational handling differs.

Tax — what the CRA expects on the terminal return #

The Canada Revenue Agency treats crypto-assets as commodities, not currency, which puts them inside the property-taxation framework.^[1] When you die, section 70 of the Income Tax Act deems you to have disposed of your capital property at fair market value immediately before death, generating a capital gain or loss for the terminal return.^[4] Crypto is capital property in the hands of most retail investors, so the rule applies.

A few practical points commonly trip up estates with material crypto holdings:

Adjusted cost base records matter. Crypto traders accumulate dispositions every time they swap between coins — selling BTC to buy ETH is a deemed disposition under CRA rules.^[2] A long-term holder with hundreds of transactions over five years needs a transaction log to compute the adjusted cost base of remaining holdings. Without records, the executor either reconstructs the history (slow and expensive) or pays tax on the entire fair market value at death because the CRA assumes a zero adjusted cost base without proof. Software tools like Koinly, CoinTracker, or Awaken Tax can reconstruct from exchange CSVs if exports are still available.

The spousal rollover applies. Capital property that passes to a surviving spouse or qualifying spousal trust transfers at adjusted cost base rather than fair market value, deferring the gain until the spouse later disposes of the asset or dies.^[3] The rollover applies to crypto if the will leaves the crypto-asset to a Canadian-resident spouse and the property vests indefeasibly within 36 months of death.

Mining and active trading are business income. If the CRA characterizes the deceased as a business trader rather than a casual investor, the full proceeds may be included in income on the terminal return rather than at the capital gains inclusion rate.^[2] The classification turns on frequency of transactions, intention, time spent, and similar factors. A CPA familiar with crypto should review estates with heavy trading history.

Inclusion rate at the time of death. Capital-gains inclusion rates in Canada have been the subject of political review through 2024 and 2025; the rate applicable to a given death year may need confirmation at the time the terminal return is filed.^[3]

NFTs, DeFi positions, and other less-obvious crypto holdings #

A Canadian crypto estate in 2026 is rarely just Bitcoin. Common additional categories include:

• NFTs (non-fungible tokens). Held in wallets like MetaMask. The same access-credentials problem applies. Fair market value is harder to determine — most NFT collections have thin liquidity, and an executor may need an appraisal rather than a spot price.
• DeFi positions. Liquidity-pool tokens, staked assets, lending positions, governance tokens. These often require active steps to unwind (un-stake, redeem) before they can be sold. Document the unwind procedure in the letter of instruction.
• Stablecoins (USDC, USDT, DAI). Pegged to USD but still treated as property under CRA rules; gains or losses still report on the terminal return even though the price movement is minimal.
• Centralized yield products. Platforms that lend or stake crypto on behalf of the user. Account-recovery processes follow the platform's death-of-account-holder policy, similar to exchanges. Document the platform, the username, and the recovery contact.

Each category needs to be on the executor's radar. The letter of instruction is the right place to list them — the will should reference "digital assets" broadly enough to cover everything without naming individual platforms.

Common drafting mistakes Canadian crypto holders make #

Six patterns recur in estates with crypto:

1. Putting the seed phrase in the will. Already discussed — this leaks the keys to anyone who searches the public probate record.
2. Telling no one the crypto exists. The executor administers what they know about. A wallet nobody knows about is, in practice, a wallet that has vanished.
3. Naming a single-purpose executor who has no technical skills. A spouse who has never opened a Ledger device cannot reasonably navigate a multi-signature wallet recovery in the middle of grief. Plan for technical support — either by naming a digital executor or by writing the letter of instruction so a non-technical executor can follow it.
4. Forgetting beneficiary designations don't exist for crypto. Unlike a TFSA or life insurance, you cannot file a "beneficiary designation" with a self-custody wallet. Disposition is controlled by the will (or by intestacy if the will is silent). The will is the only mechanism.
5. Losing the seed phrase over time. A seed phrase written on a piece of paper in 2017 may be illegible by 2026. Steel backup plates exist for a reason. Test annually.
6. Not coordinating with foreign assets. A wallet that holds crypto regulated in a foreign jurisdiction, or a foreign exchange account, may trigger additional reporting during life (T1135) and cross-border probate complications after death.

How this fits with the rest of your estate plan #

Crypto sits alongside the rest of the will, not as a separate document. Three connections are worth drawing.

The crypto clause integrates with the residue clause — gains or losses from disposing of crypto fall into the residue unless the testator made a specific bequest of a particular wallet or amount. For most Canadian estates with diversified holdings, leaving crypto in the residue is simpler than carving it out.

The crypto clause integrates with a practical "discovery" document that lives outside the will. That document is where the executor learns where to find access mediums. Our pillar on how to write a will in Canada walks through the will-versus-discovery-document distinction.

The crypto clause integrates with tax planning during life — selling material amounts of appreciated crypto during life can spread the gain across years rather than crystallizing all of it on the terminal return. This is a CPA conversation, not a will-drafting one, but it changes the size of the tax bill the estate ends up paying.

If probate fees concern you and crypto is a meaningful share of the estate, the probate fee calculator shows how the value of crypto (which generally flows through probate, unlike registered accounts with named beneficiaries) affects the fees in each province.

What we focus on at It's Simple Will #

The It's Simple Will questionnaire asks about cryptocurrency holdings as part of the asset inventory. The Will Creator produces a clause that authorizes the executor to access digital assets and refers to a separate discovery document for the credentials, without exposing private keys to the public probate record. The discovery document then captures the practical details — wallet types, approximate balances, where the access mediums are stored — in a document that stays with the executor, not in the probate court.

If you already have a will and want to add crypto, a codicil is usually overkill. Adding a properly-located letter of instruction and updating the executor with the location is often the more practical step. Our pillar on how to write a will in Canada covers the underlying will-drafting choices.

You can start a will at app.itssimplewill.ca. The cryptocurrency clause is generated as part of the asset section if you indicate that you hold crypto.