Can I leave cryptocurrrency in my Will?
Posted on 13th April 2021 at 10:06
Unlike money you might have an a bank account, cryptocurrency is handled using computer technology known as ‘blockchain’.
People store cryptocurrency in a digital wallet and they must have virtual keys to access it.
Like any other assets, cryptocurrency can be part of someone’s estate when they die and can be left to their beneficiaries in their Will. However, it’s not like property for which the owner will have deeds, for example. Without someone’s private key for their digital wallet the assets can’t be transferred.
It’s estimated that over $20billion worth of cryptocurrency has been lost because owners have died without leaving a contingency plan.
When someone leaves cryptocurrency to you
Even when you are named as a beneficiary in someone’s Will and they have said that you are entitled to their cryptocurrency, you won’t be able to access it without their private keys.
A Will is not the right place to leave details of private keys or even online bank accounts. In fact, in some cases Wills can become public records once probate has been obtained, even before you could access the digital wallet.
How can beneficiaries access cryptocurrency?
Some people who hold cryptocurrency leave specific instructions with a lawyer or in a safety deposit box. This might include how to access their private keys, along with their usernames for online accounts and details of their public and private keys.
However, passwords are frequently changed and access to many accounts involves two-factor authentication (2FA) with their smart phone, for example.
One option is to buy and store cryptocurrency at a cryptocurrency bank where the keys can be managed on your behalf. Details of the crypto bank and your account can then be left for loved ones. However, the cryptocurrency won’t be in the owner’s control because it is stored at the bank.
Alternatively cryptocurrency can be stored online in a wallet with multiple signatories. This allows someone to keep control of their assets but, in the event of loss of access or death, two other independent people can retrieve the funds on their behalf. They can have a beneficiary card to give loved ones explaining who can access the wallet.
It’s also possible to keep cryptocurrency in a hardware wallet where you can safely store a copy of the private keys, or a recovery phrase for the wallet, along with step-by-step instructions.
For advice about how to safely leave cryptocurrency in your Will, please get in touch.
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