What Happens to Your Crypto After Death?
In this regard, it bears mentioning that as per a recent study, 89% of crypto owners globally claim to be extremely nervous as to what will happen to their holdings after their demise. Despite these high levels of anxiety, the study goes on to surprisingly note that crypto owners are 4 times more likely to not make use of a will — in order to pass on their possessions — when compared with their non-crypto investor counterparts.
Furthermore, Bitcoin’s novel blockchain-based design allows its users to practically send any amount of money to another party without the need for a financial intermediary. As a result, no central bank/authority ever has any control over the money except for its rightful owner. One consequence of such a setup is that millions of dollars worth of crypto are lost per annum due to people with sizable holdings passing away. In fact, there is data available online which suggests that to date a little over 4 million BTC has gone out of circulation due to their owners failing to leave adequate retrieval instructions.
All of this information quite clearly suggests that as crypto adoption increases worldwide, investors will need to start planning how they would like to pass on their digital assets to their family/friends. In this regard, creating a will is an absolute must for everyone. This article will look at some pertinent information that all crypto owners should remember to leave behind in their inheritance documents.
What to Include in Your Will
Straight off the bat, it should be mentioned when creating a will, it is essential that users remember to mention their private keys in the document, as it is the most simple and straightforward way of passing on digital wealth to a rightful heir. In fact, there have been several prominent examples of people who have employed this method to make sure that their fortune gets passed down properly.
Hal Finney, one of Bitcoin’s earliest proponents and the first person to receive a Bitcoin transaction, publicly revealed a year before his death that he had shared his private keys with his children, thus securing their financial future. However, that being said, it is important to remember that once these keys have been shared with someone, there is a chance that they may get leaked out, especially if the heir is not well versed in matters pertaining to digital asset security.
Also, in case a person’s crypto assets are stored on a hot wallet that is hosted by a cryptocurrency exchange, there may be a way to get the exchange to release any locked funds by providing adequate documentation about the deceased individual. In this regard, it should be highlighted that prominent trading platforms like Binance and Coinbase allow family members to gain access to a person’s funds, on the condition that they are able to furnish an official death certificate as well as a will.
In recent years, a number of companies — such as SafeHaven, and TrustVerse — have emerged from the woodworks, providing users with novel solutions in regard to bequeathing their assets using blockchain-based crypto tech. To put things into context, the above-stated platforms can be used in relation to not only digital assets but a host of other sensitive data (such as an individual’s social media profiles and so on) as well.
Lastly, it should be highlighted that these platforms don’t actually store a person’s assets, but rather provide them with a service to store encrypted information pertaining to the assets in question. Therefore, as we move into an increasingly digitized future, it will be interesting to see how this niche continues to evolve, especially with the crypto market continuing to expand and grow at a staggering rate with each passing year.