Cryptocurrency has been the buzzword on everyone’s lips in recent times. There’s been a lot of speculation on the reliability and stability of such digital assets that operate on a decentralised, peer-to-peer network.
Some experts predict that the monstrous growth of cryptocurrencies such as Bitcoins is not sustainable and should not be trusted. Some others argue that cryptocurrency is the future, and that it’s just going through a volatile period now before it stabilises. Whichever side of the debate you’re on, it is always good to know more about any new technology that comes up, especially something as significant as cryptocurrency, and its relevance from a legal stand point. For instance, what happens to the cryptocurrency that you own if you suddenly die? Is there such a thing as Cryptocurrency inheritance? If yes, how does it work and what should you do with your digital assets to ensure that it gets passed on to your loved ones in the event of your death?
Advantage of Cryptocurrency
One of the biggest advantages of cryptocurrencies, cited by proponents, is the fact that they are not controlled by traditional financial institutions such as banks. But this advantage also comes with a downside. On the event of someone’s unexpected demise, it becomes next to impossible to track their cryptocurrency assets, to ensure that they get handed over to the next of kin. Currently, the only way to ensure that your cryptocurrency gets passed on to the right person is to include it in your will. Another complication with such digital assets is that they are stored in digital wallets, with many passwords, keys and other protection in place to keep them as secure as possible. So, unless one has all the keys and passcodes to access the assets, there is no other way to get their hands on them.
Transferring your Cryptocurrency
If you own cryptocurrency that you want to be passed on to your spouse or children after your death, the best route to take would be to specify it in the will and provide them with all the necessary information. Of course, every care must be taken to ensure that the information is passed on in a secure manner, leaving no room for a security breach.
It’s early days yet, with the government still grappling with setting up laws and regulations in place concerning cryptocurrencies. When it comes to cryptocurrency and estate planning, the only way to go about it is to explicitly state your wishes in your will and provide the intended heir with the passcodes/keys to gain access to your cryptocurrencies. Failure to do so might meant that the cryptocurrencies will be lost forever, left unclaimed in the vortex of the digital world.