Bitcoin Estate Executor Checklist

Executor Checklist for Bitcoin Estate Tasks

This memo is published by CustodyStress, an independent Bitcoin custody stress test that produces reference documents for individuals, families, and professionals.

Discovery Actions

Executors handling estates that include bitcoin face tasks that general executor guidance does not address. A bitcoin estate executor checklist differs from standard executor checklists by including cryptocurrency-specific actions that traditional estate administration never encounters. These bitcoin-specific tasks exist alongside normal executor duties, not as replacements for them—the executor still handles all traditional responsibilities while also addressing the unique requirements that bitcoin creates.

The checklist concept implies sequential actions, but bitcoin estate administration rarely follows a simple linear path. Executor actions interleave, depend on each other, and may need to be revisited as new information emerges or circumstances change. Understanding what actions exist and how they relate to each other matters more than following a rigid sequence. The checklist framework provides structure for thinking about executor responsibilities, even though actual administration involves iteration and adaptation rather than mechanical step-following.

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Discovery Actions

Before the executor can do anything with bitcoin, they must discover what exists and where to find it. Discovery actions address the fundamental questions that precede all other executor work: is there bitcoin, how much, where is it, and what custody arrangements apply? These questions have obvious answers when the deceased left clear documentation, but executors frequently face estates where documentation is incomplete, absent, or difficult to locate, making discovery itself a significant undertaking.

Locating documentation created by the deceased provides the starting point for most discovery. The executor searches for custody documentation in expected locations—home safes, filing cabinets, safe deposit boxes, attorney's offices, digital storage—hoping to find inventory records, access instructions, or at minimum confirmation that bitcoin exists. When documentation is found, it guides subsequent discovery. When documentation is not found, the executor must proceed through indirect evidence: tax returns mentioning cryptocurrency, bank statements showing exchange transactions, hardware devices that suggest bitcoin involvement, or family members' recollections about the deceased's holdings.

Determining the scope of holdings requires assembling whatever evidence exists into a coherent picture. The executor may find partial information from multiple sources that must be reconciled—exchange accounts that show historical purchases, wallet files on a computer, physical backup materials in different locations. Establishing what bitcoin the estate includes, at what approximate value, and through what custody arrangements involves detective work that traditional estate administration rarely demands. This discovery phase may take substantial time and may never achieve complete certainty, forcing the executor to proceed with whatever picture they can construct.

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Security Actions

Bitcoin security becomes the executor's responsibility immediately upon assuming their role, even before full discovery is complete. Security actions protect estate assets from theft, loss, or deterioration during the administration period. These actions may need to happen quickly, particularly if there is any indication that custody information has been compromised or that unauthorized parties might attempt to access the bitcoin. The executor who delays security measures exposes the estate to risks that prompt action would prevent.

Securing physical custody materials protects the tangible items that enable bitcoin access. Hardware wallets, seed phrase backups, and related physical materials need to be located and placed under the executor's control. This may involve changing locks, moving materials to secure locations, or otherwise ensuring that only authorized parties can access the physical components of custody. Until these materials are secured, anyone with physical access—family members, household staff, visitors to the deceased's residence—poses a potential security risk.

Securing digital access points addresses the electronic pathways to bitcoin holdings. Exchange accounts, wallet software, email accounts used for cryptocurrency services, and other digital touchpoints all require attention. The executor may need to change passwords, enable or enhance two-factor authentication, or close accounts that pose more risk than value. Digital security actions often prove more complex than physical security because digital access points are less visible and may be unknown to the executor until discovered through broader investigation.

Assessing ongoing security requirements establishes how the executor will maintain security throughout administration. The immediate security actions address urgent risks, but the executor must also think about security over the months or years that administration may take. What ongoing monitoring is appropriate? What backup procedures protect against material loss? What documentation of security practices supports the executor's fiduciary duty claims? These longer-term security considerations ensure that initial security actions are not undermined by subsequent neglect.

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Verification Actions

The executor needs to verify that the information they have discovered is accurate and complete before relying on it for subsequent actions. Verification actions test claims, confirm holdings, and validate that the picture assembled during discovery actually reflects reality. Acting on unverified information risks errors that verification would have caught—incorrect balances, missing holdings, outdated custody arrangements, or documentation that does not match actual conditions.

Verifying holdings against available evidence confirms that claimed bitcoin actually exists and is accessible. The executor may be able to check blockchain balances for known addresses, verify exchange account balances through account access, or use wallet software to confirm that provided seed phrases recover the expected funds. This verification establishes the actual state of holdings, which may differ from what documentation claims or what family members believe. Discrepancies between claimed and actual holdings require investigation to understand whether bitcoin has been moved, documentation is outdated, or holdings were never what they were believed to be.

Verifying access capability confirms that the materials and procedures available actually enable the access they are supposed to enable. Having a seed phrase means nothing if that seed phrase does not recover the expected wallet—perhaps because it was transcribed incorrectly, applies to a different wallet, or requires an additional passphrase that was not documented. The executor may perform test recoveries, verify that hardware wallets are functional, or otherwise confirm that the theoretical access capability translates to practical access capability. This verification ideally occurs before the executor needs to actually move funds, allowing time to address problems if verification fails.

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Valuation Actions

Executors must value estate assets for tax reporting, equitable distribution, and administrative decision-making. Valuation actions establish what the bitcoin is worth at relevant points in time, using methods and documentation that can withstand scrutiny from tax authorities, beneficiaries, and courts. Bitcoin's price volatility makes valuation more complex than valuing stable traditional assets, and the lack of established practices for cryptocurrency estate valuation leaves executors without clear precedent to follow.

Date-of-death valuation establishes the value used for estate tax purposes and as the basis for beneficiary distributions. The executor must determine what price to use—which exchange, what time on the date of death, spot price or average—and document the basis for that choice. Different valuation approaches can produce meaningfully different numbers given bitcoin's price variation across exchanges and within single days. The executor's valuation methodology may need to be defensible if challenged by tax authorities or beneficiaries who believe a different methodology would better serve their interests.

Ongoing valuation tracks value changes during administration. Bitcoin held during the administration period may change substantially in value, creating potential tax consequences for the estate or affecting distribution decisions. The executor needs to monitor value, document prices at relevant times (such as sale or distribution dates), and understand how value changes interact with estate tax and income tax obligations. This ongoing attention to valuation continues throughout administration, not just at the initial date-of-death valuation point.

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Coordination Actions

Bitcoin estate administration typically involves coordinating with multiple parties, each of whom may have roles, information, or authority relevant to successful administration. Coordination actions bring together the people whose involvement is needed—beneficiaries, co-executors, professional advisors, key holders in multi-party custody, and service providers. The executor who fails to coordinate effectively may find their efforts blocked, duplicated, or undermined by uncoordinated actions from other parties.

Coordinating with beneficiaries maintains communication about bitcoin-related aspects of the estate. Beneficiaries want to know about their inheritance, and bitcoin's unfamiliarity may generate questions, concerns, or anxiety that the executor can address through proactive communication. Beneficiaries may also have relevant information—perhaps they received partial details from the deceased, or perhaps they have cryptocurrency knowledge that can assist the executor. Coordination with beneficiaries serves both informational and relational purposes, keeping beneficiaries informed while maintaining trust that supports smooth administration.

Coordinating with professional advisors leverages expertise the executor may lack. Attorneys, accountants, and cryptocurrency specialists can provide guidance on legal, tax, and technical aspects of bitcoin estate administration. The executor who attempts to handle everything alone may make avoidable errors that professional advice would have prevented. Knowing when to seek professional help, whom to contact, and how to use professional input effectively constitutes an important executor skill. The estate may bear the cost of professional assistance, making this an allocation decision as well as a coordination decision.

Coordinating with multi-party custody participants addresses situations where bitcoin access requires cooperation from parties beyond the executor. Multisig arrangements, social recovery schemes, or other multi-party setups may involve individuals or companies whose participation is needed for the executor to accomplish their duties. Identifying these parties, making contact, explaining the situation, and securing their cooperation all fall within the executor's coordination responsibilities. Uncooperative parties or parties who cannot be located can create obstacles that require legal, technical, or negotiated resolution.

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Transaction Actions

Eventually, the executor may need to move bitcoin—to consolidate holdings, to sell for estate needs, to distribute to beneficiaries, or to accomplish other administrative objectives. Transaction actions involve the technical operations of bitcoin movement and the documentation requirements that make those transactions administratively legitimate. The executor who has never transacted in bitcoin faces a learning curve that may be steep if preparation did not occur before the holder's death.

Preparing for transactions involves ensuring the executor has the capability to execute the transactions that administration requires. This may mean learning how to use wallet software, understanding transaction fees and timing, and practicing with test transactions before moving significant amounts. The executor also needs to decide whether to transact personally or to engage technical assistance—a choice that involves cost, trust, and capability considerations. Preparation for transactions ideally occurs well before the transactions themselves, allowing the executor to develop confidence and competence before acting on actual estate assets.

Executing transactions moves bitcoin according to administrative needs. Each transaction requires technical execution—constructing, signing, and broadcasting the transaction—and administrative documentation—recording what was done, why, and with what authorization. Transaction errors can be costly or irreversible, so careful execution with appropriate verification before finalization protects the estate. The executor documents their actions to demonstrate that transactions served proper purposes and were executed within the bounds of their authority.

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Distribution Actions

Final distribution delivers bitcoin to beneficiaries according to the deceased's estate plan. Distribution actions complete the executor's work by transferring holdings to those entitled to receive them, in the amounts and forms specified by will, trust, or applicable law. How distribution occurs—whether as bitcoin directly or as proceeds from sale—depends on estate plan provisions, beneficiary preferences, and practical considerations that the executor must navigate.

Determining distribution entitlements requires interpreting estate planning documents in light of the actual bitcoin holdings. The will may specify that bitcoin goes to a particular beneficiary, that it is divided among beneficiaries in certain proportions, or that it is treated the same as other assets. Interpreting these provisions when actual holdings differ from what the deceased anticipated, when beneficiaries have conflicting views, or when legal ambiguity exists may require legal guidance. The executor needs clarity on who gets what before executing distributions.

Executing distributions transfers bitcoin or proceeds to beneficiaries. If distributing bitcoin directly, the executor needs to understand beneficiary capability—can they receive bitcoin, do they have wallets, do they understand what they are receiving? If distributing proceeds, the executor must sell bitcoin, manage the sale proceeds, and distribute cash. Either approach requires documentation of the distribution, acknowledgment from beneficiaries, and records that demonstrate proper execution of fiduciary duties. Distribution closes out the bitcoin portion of estate administration, transferring responsibility from executor to beneficiaries.

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Conclusion

A bitcoin estate executor checklist encompasses discovery, security, verification, valuation, coordination, transaction, and distribution actions that general executor guidance does not address. Each category involves bitcoin-specific considerations that traditional estate administration never encounters—the executor who follows only conventional guidance will miss responsibilities that bitcoin estates require. The checklist framework provides structure for understanding what actions exist, though actual administration involves iteration and adaptation rather than rigid sequential execution.

Discovery actions identify what bitcoin exists and where to find custody materials. Security actions protect holdings from theft or loss during administration. Verification actions confirm that discovered information is accurate before relying on it. Valuation actions establish what bitcoin is worth for tax and distribution purposes. Coordination actions involve the multiple parties whose participation successful administration requires. Transaction actions move bitcoin when administrative needs require it. Distribution actions deliver holdings to entitled beneficiaries.

The bitcoin-specific actions in this checklist exist alongside traditional executor duties, not as replacements for them. The executor handles probate, creditor claims, tax filings, and other conventional responsibilities while also addressing the unique requirements bitcoin creates. Estates with significant bitcoin holdings demand more from executors than traditional estates do, and executors benefit from understanding these demands before assuming their role.

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System Context

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When to Use a Bitcoin Custody Company

Bitcoin Estate Beneficiary Reporting

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