Let’s face it – we humans have a proven mortality rate of 100%. Despite that, maybe one of our readers finds this topic morbid; we must dare to ask for the answer: what happens with your cryptocurrency holdings when we die, and how do you inherit your Crypto? You probably have a family around you and use cryptocurrency to invest in your and your family’s future.
With the exploding growth rates in the past and the awareness that we are still in the early adopter stage, it seems to make sense to invest a part of your savings into promising blockchain projects by purchasing and holding coins and tokens. While it is another question about which coins to hold for the long run (we will feature this soon), there is a more basic question to answer.
Inherit your Crypto Plan B
Imagine you built a strong and growing portfolio. As you are smart, you don’t leave the coins and tokens within an exchange and withdraw them to your Crypto wallet(s), having the good feeling of saving them in secure storage. Whether you are run over by a truck or hit by a piano dropped from the 5th floor, it won’t be easy to inherit your Crypto from your family, the wealth you accumulated with your crypto portfolio.
Within the next decades, there will likely be a growing number of orphaned wallets – money that will never do anything anymore. Our goal with this post is to enable and motivate you to prepare a document you can pass over in case anything tragic happens.
Cryptocurrency coins and tokens are not (yet) regulated by any authority, and it will be hard for your family to claim/inherit your Crypto or any of your holdings legally if you pass away. We need a document that enables your loved ones to get ahold of your crypto belongings by providing all the needed data to withdraw them. Methods to trace stolen digital assets can become increasingly important in situations where ownership is disputed. Establishing clear documentation that outlines the transfer and custody of cryptocurrencies can aid in recovering lost funds. By taking proactive measures, you can help secure your family’s financial future and ensure that they are not left in the dark regarding your digital investments.
There are times when emergencies occur in our lives. When we die, our investments can either be protected or in an unorganized state that might leave your family fighting over who gets what or even who gets anything.
To prevent this issue, it’s best to start protecting your crypto assets now. This guide will help you along each step of the way.
What Happens To My Crypto Assets When I Die?
Cryptocurrencies are unique investments because of the inclusion of blockchain technology. Blockchain technology is a revolutionary concept as it allows crypto investors to encrypt their assets and is a good investment to see your money grow over time.
Here’s an example situation in regards to crypto inheritance:
Bill bought Bitcoin in 2016 for about $2,000. After investing, he did his best to secure his crypto assets by enabling a Two-Factor authentication security system and protecting his private keys.
Bill did everything and hoped his children would benefit from his investments. After his unexpected death, Bill didn’t pass his security information to his children, an executor of his estate, or a trusted friend. As a result, Bill’s children could not access their father’s investment portfolio.
You don’t want to experience this scenario. Since your crypto assets are encrypted, it will be difficult for them to receive them unless you directly tell them your keys. Take the following steps to pass your crypto inheritance to your children.
So what would happen in such a case? Your coins would collect dust on the blockchain. There are thousands of Bitcoins lying around, which nobody can access anymore. The bare answer is that nothing ever happens again with these funds.
How Can I Protect My Crypto Assets?
Before using any services, placing your important information in a written letter is best. This is the most transparent way to protect your accounts; your family will easily understand the information. Later in this text, we will show you how to pass this information safely.
Passing your crypto to your children
If you plan on passing your crypto kingdom to your children or grandchildren, then you need to take the following steps:
- Copy your account details, private keys, etc. (basically all the information needed to access your crypto portfolio) on paper or in a memory stick. Ensure the information is in your safe or sent to an executor. Doing this makes it easy for your family to access your crypto portfolio.
- Some wallets enable you to print out a paper wallet – do it! Research how these funds can be restored and write a step-by-step explanation.
- Also, make sure you contact the current holder of your private keys so your relatives can find them. This is in case you hold your cryptos somewhere where you don’t have access to the private keys. However, this is not generally advisable, and you should change that.
- Place your cryptos in your will. This ensures that your assets will be sent to the correct parties. Like with every last will – a clear arrangement of how to share the available assets between your loved ones is good to avoid fights and other nasty things.
- Give them withdrawal information. You should give them a list of your crypto exchange logins/wallet information so they can take the assets and convert them into fiat money. Ensure this information is detailed so they can utilize your assets correctly.
- If you use a hardware wallet like Ledger, include a very easy-to-understand instruction on how to work with it. Always have the not-so-tech-savvy in mind!