You might assume that leaving your crypto assets to your family or friends is just a matter of listing your assets in your will, like anything else you own. The problem is that your crypto assets are encrypted. Because there is no real record created of those assets attributed to you in a central banking location, it’s possible that without you mentioning your crypto assets to your loved ones, nobody will know that you own them. There is no type of search that your attorney, the government, or any other agency can do to retrieve your full assets or access all information for them. Crypto systems’ security measures make it very difficult to hack, steal, counterfeit or duplicate your crypto information, even for noble reasons. This is the downside of the privacy built into most cryptocurrencies and platforms.
What If You Die While Owning Crypto?
If you forget or lose your account or crypto keys while alive, those assets will be lost to you forever. In the same vein, after you die, without your crypto keys, nobody else will be able to access them, either. Unless you make special arrangements and communicate your information to somebody, your crypto assets could be lost once you’ve passed away.
Leaving Crypto in Your Will
Just like you must take steps to see that your crypto information is safe and accessible to you and no one else while you’re alive, you must prepare for your passing by making the existence and keys to access your crypto assets and wallet available to those you wish to pass them to. Here are a few things to remember when leaving crypto in your will:
- No sensitive info in the will – Remember, your will is technically a public document that can be searched for and accessed. Therefore, your list of crypto assets, sensitive personal and financial information, encrypted codes and numbers are not safe or private when laid out in a will.
- Risk of unpreparedness – If you die suddenly without preparing for your will or before passing off your crypto assets, you will lose everything, and no one will be able to find or receive what you had.
- Risk of being prepared – The only way for others to get to your assets when you die is to give them a copy of your private keys while you’re still alive. If you have an illness with a prognosis, you might be able to wait until your disease or affliction advances and attempt not to reveal info until the last minute. The problem with sharing your private key or giving a copy is that you have no safeguard for them not to take your assets while you are still alive. There is no ID check, no permissions. You either have a key to crypto assets, or you don’t. You either have full access, or you have none. Therefore, you must implicitly trust whoever you give that information to ahead of time.
- Create a trust – Can you make your data accessible after you die without giving full access while you’re alive? One idea is to give partial information to more than one party or trust to be assembled after you die, with further instructions given to yet another person or agency. Access to your stuff will be even more complicated and runs the risk of being too tough to do. This also doesn’t guarantee that if there are a lot of assets on the line, others won’t work together to get to them before you die.
- Exchanges may help – So far, the Coinbase Exchange has allowed purchasers to name a beneficiary to their accounts. When that beneficiary shows a death certificate and copy of the will, they may be able to provide at least access to whatever wallet they host.
Millions of Bitcoins have been lost over the years when unprepared owners died. Be smart in how you leave your crypto to others to avoid devaluation and legal or financial penalties while making it easier for the recipients to enjoy your efforts without undue complications. Contact Aponte Crypto Consulting for more suggestions on how to pass on your crypto wealth.