A Cautionary Tale of Cryptocurrency and Estate Planning: Billionaire Matthew Mellon’s Million Dollar Disaster.


Estate planning is no stranger to estate planning disasters.

Consider, for example, the number of celebrities who have died intestate (without a Last Will and Testament (“Will”)).  Stars like Aretha Franklin, Prince, and Jimi Hendrix just to name a few. They died without a Will, leaving their estates in a mess and their relatives fighting over inheritance. In some cases, (such as the estates of Jimi Hendrix and Bob Marley) the legal battles raged on for more than 30 years!

But times change.

And so do the types of estate planning complications and mistakes we are beginning to see. As digital assets—including cryptocurrencies— become a more common part of the ordinary person’s estate, beyond the familiar probate disasters of dying intestate or do-it-yourself Wills, now probate disasters are being caused by mistakes made in the handling of digital assets.

Cryptocurrency and Estate Planning

Despite its volatile nature, the interest in cryptocurrency remains high; making it more and more a significant part of the estates of most people.

Cryptocurrencies (like Bitcoin and Ethereum) are digital coins that are created and traded online.

They are recorded on the “blockchain,” which is essentially a digital public ledger. The blockchain provides the structure for keeping bitcoin secure yet decentralized.

Typically, crypto assets are stored in a wallet. The wallet can be:

  • an online exchange (i.e., a custodial wallet)
  • a hardware wallet,
  • a mobile wallet, or
  • a local software wallet.

Digital currency has virtually no personal identifying information. Plus, the wallet the currency is stored in can only be accessed by a private key. The private key is a unique series of alphanumeric characters generated by the wallet that only the owner knows.

If the key is lost or stolen, there is no way of ever getting your money back.


Never ever.



And that’s where the problem starts.

The nature of cryptocurrency makes passing them on to one’s heirs an estate planning challenge.

On the one hand, you need to keep the key safe and private, while on the other hand, if your loved ones or personal representative don’t know where to find the key or cannot access it, your estate will not be able to distribute that money to your heirs.

This second scenario is essentially the situation that arose in the case of millionaire Matthew Mellon.

Matthew Mellon’s Multi-million Dollar Cryptocurrency Disaster  

When Matthew Mellon died in 2018, he was reportedly worth almost $200 million dollars.

Fancy sports cars, several ex-wives, expensive art collections, children —Matthew Mellon had it all.

He also was hundreds of dollars in debt and owed tens of millions of dollars in unpaid taxes.

The vast majority of his estate—more than $193 million—was in the form of cryptocurrency known as XRP.

That’s a lot of money, and after Matthew Mellon’s death, his estate needed that money to pay his taxes and debts.

But the estate could not reach the crypto assets.

Matthew Mellon hadn’t updated his Will to include his cryptocurrency millions. So the outdated Will never mentioned that he owned any cryptocurrency. And no one in his family had access to the private key or knew where it was. Instead of providing a way for his family or attorneys to access his key, Matthew Mellon had kept the keys to the XRP on devices under other people’s names in various locations throughout the country.

Making matters worse, the cryptocurrency—the estate’s biggest asset—was fluctuating in price every day.

Plus, it was discovered that Mellon had made an agreement with Ripple, XRP’s creator and manager, to not sell off his shares except in small amounts. While this made sense for Ripple—because selling off that much XRP in short order would probably have crippled the company—it was a disaster for Mellon’s estate. After his death, every day that passed without selling the crypto assets meant the estate faced losing millions of dollars while all the time it continued to be responsible for paying off his exorbitant bills and debts.

Eventually, Ripple gave Mellon’s lawyers access to the XRP.  But it still took almost three years for the estate to settle his debts because of the limitation placed on selling the assets.

A Better Way?

Matthew Mellon’s probate disaster was not that he invested in cryptocurrency. The problem, for estate planning purposes, was that Will did not mention them, and his representatives could not identify or access them.

Which brings us to you, your estate plan, and your crypto assets.

The most critical aspect of owning crypto assets is your private key. The key is… well, key to gaining access to your money and to being able to distribute your wealth after your death.

If you do not leave a list of your crypto assets and your private keys for each of your digital wallets, your family, personal representative, or executor will not be able to retrieve your money. Period. The money will be lost and completely irretrievable.

So, what can you do?

Well, first, consult with an experienced estate and probate lawyer.

Then consider these approaches:

  1. Manage your wallet If you go this route, you must be certain to keep your key safe yet make sure that your family or estate attorney has access to the key.


  1. Use a trusted and insured cryptocurrency custodian.

Cryptocurrency is here to stay. It is a new and perhaps volatile investment, but it is nevertheless a valid part of one’s estate. So plan ahead and make sure your assets can be accessed and distributed to your loved ones when you are gone.


Estate Planning in the Digital Age in Plantation, Florida

Estate planning is more than just property division. It provides protection for your loved ones and peace of mind for you. At SJF Law Group, we work hard to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. When you work with the estate planning attorneys at SJF Law Group, you get more than just an estate plan: you get peace of mind. Connect with us on Facebook or Instagram or email us at: [email protected] today.

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