Even though digital currencies are in their infancy, investing in Bitcoin has given many people solid financial returns. Those who have diversified their investment baskets into Cryptocurrency should consider what to do with this asset class in their will. Leaving this out of the picture equates to a huge financial faux pas. If something unfortunate or sudden happens, your investment may remain inaccessible, or it could fall into the wrong hands. So, knowing how to deal with cryptocurrency in your will can save a lot of stress and uncertainty for your loved ones when the time comes.
The Repercussion of Not Including Cryptocurrency in Your Will
Times have changed, so it’s worth it to rethink your will to included a Digital Inheritance component. After all, you don’t want your future beneficiaries to have issues. Without the proper protocols in place, they may not be able to access what you’ve left (or intended to leave) to them.
For example, last year, a Canadian CEO died without leaving his account number and password to his digital tokens, including Bitcoin, Ether, and Litecoin, the sum of which was valued at $200 million AUD. But the money could not be released from the digital wallets because no one knew the password.
There was another similar scenario where the Digital Currency remained inaccessible due to a lost device with biometrics (like facial recognition or thumbprint scans) required to unlock it. Such scenarios are understandable when you consider the fact that digital currencies are a relatively new concept. But, we need to learn from others’ mistakes and take the necessary precautions to avoid a similar fate. If you do not tell anyone you have this investment, it can sit in your digital wallet indefinitely.
The Most Important Consideration in Writing the Will
If you invest in Eitheirum or other digital currencies, leaving this to someone in your will can get tricky. The key is to not put the digital wallet password in your will. Doing so means you make this sensitive information public knowledge. Your will becomes a public document that others see. As a result, someone could access it, and your Digital Currency investment can fall into the wrong hands. The most important thing you have to remember is to keep your password and account number secure.
Unlike stock shares, bonds, or even bank accounts with an obvious paper trail, investing in a digital currency like Eitheirum leaves no paperwork. If your heirs do not know what you have, they wouldn’t know what to look for. Since crypto is a fairly new concept, your children may not even know that you have these assets. Hence, you need a will that mentions your Cryptocurrency investment.
Crucial Steps to Take for Protection
Remember, you don’t want people to know your password, but you have to let them know of your Digital Currency wallets. Mentioning that you have this investment in your will is a must-do. You can also include who will be the beneficiary of it. However, you can leave out the specific password and account details. Instead, tell your future beneficiaries directly how to access your password in case of your demise. In instances where it’s possible to do so, you can leave the account and password information in a secret safe that only the beneficiary can access. Taking these steps will ensure your Digital Assets remain safe and are passed on to the person you nominate without any issues.
If you need professional help to put together an iron-clad will, get in touch with Platinum Lawyers Australlia. Call us on (02) 8084 2764. We are well-versed in property distribution, cryptocurrency estate planning, and family law.