As an executor administering a deceased estate under the Administration of Estates Act 66 of 1965, dealing with cryptocurrency can be complex.
Unlike traditional assets, crypto is decentralized, meaning there’s no bank to notify or institution to liaise with. However, it still forms part of the deceased’s estate and must be accounted for in the Liquidation and Distribution (L&D) account.
Here’s how to approach it:
· Identify the Assets – Cryptocurrency holdings (Bitcoin, Ethereum, etc.) are often stored in digital wallets or on exchanges. Executors must locate these assets, often through the deceased’s records, private keys, or seed phrases.
· Without access credentials, recovery can be nearly impossible. This is why proper estate planning is crucial. It is best to encourage your clients to document access details securely and to do proper estate planning with each and every will you draft, to avoid headaches in the future.
· Determine the Value – Crypto assets are volatile. Their value must be determined at the date of death for estate duty and capital gains tax purposes, per SARS regulations. Professional valuations or exchange rate confirmations are advisable.
· Report to the Master of the High Court – Like any other estate asset, crypto holdings must be disclosed in the L&D account.
· Tax Compliance – SARS treats cryptocurrency as an asset subject to capital gains tax upon disposal. Executors should consult a tax specialist to ensure compliance.
· Transfer or Liquidate – Beneficiaries can inherit crypto if they have the necessary wallets, or the executor may convert it to fiat currency (e.g., selling Bitcoin for ZAR) and distribute accordingly.
Appointing a specialist in deceased estate will alleviate undue stress for the beneficiaries of the estate, and ensure that the administration process runs smoothly, and in accordance with statutory provisions.
Leché Swanepoel, LLB
Estate Administrator – Deceased Estates Department
Elhers Attorneys
