Estate planning is difficult enough, however, when it comes to cryptocurrency, determining what will happen to your assets after you pass away becomes even more complicated. Unlike traditional currency that is held in the form of bank accounts, investment portfolios, or even cash on hand, cryptocurrency may not be as easy for the executor of your estate to locate and distribute properly.
Cryptocurrencies are not regulated in the same manner that money in banks is. That also means that they are far harder to track. There are no crypto bank accounts tied to their owner’s social security number or other identifying information. Instead, cryptocurrency owners are solely responsible for securing their own fortunes. Historically, many people have failed to do this. In fact, it’s estimated that tens of billions of dollars worth of Bitcoins alone are simply lost either because their owner passed away or simply because of negligence.
So, how can you make sure that your heirs are able to take possession of your digital fortune after you pass away? There are several methods you can use to make sure that your cryptocurrency makes it to your heirs after you die. For instance, there are computer programs you can use that will prompt you to “check-in” over certain periods of time. If you fail to check in, the program is actually designed to search databases for death certificates with your name on them. If the problem finds a record that is a match, it will transfer your cryptocurrency to an account of your choosing.
If you prefer a more analog approach to passing on your cryptocurrency, you can simply put together a detailed list of where your crypto can be accessed including any login information or keys for your fiat accounts. The executor of your estate can be instructed to pass that information along to your heirs in the event of your passing. They would then simply take over your existing accounts. The danger of choosing this approach is that your fortune could be lost forever in the event your heir loses the information you’ve left for them or if you’ve failed to make sure that the executor of your estate has access to the most up-to-date information.
There are several ways that you can ensure that your cryptocurrency is passed on to your loved one when you die, each with its own set of pros and cons. You will have to choose the method that is right for you based on your trust in your heirs and confidence in the executor of your estate.
Cryptocurrency is still relatively new, so hopefully, in time there will be more secure methods for securing your cryptocurrency for your heirs. However, the most important thing is that you have some sort of plan in place right now for transferring your crypto to your heirs at the time of your passing. If you fail to do so then your fortune could add to the billions of dollars in crypto that has been lost forever.