The key to digital inheritance
Do you know the password key to your other half’s cryptocurrency investments? The Hustle website posed this question recently, as the number of investors in bitcoin, etc., continues to increase.
The website cited the example of a 32-year-old IT professional in California who’d taken a tumble while carrying out repairs on his roof. The man had realised afterwards that if the fall had killed him, his wife would have had no way to access his $77,000-worth of cryptocurrency.
The wake-up call resulted in him noting down the passkey – a 254-bit long alphanumeric string and details on where the account could be found and storing it in a safe place in his home.
No central regulatory authority
Traditional assets such as savings accounts are relatively easy for estate executors or administrators to access. However, cryptocurrencies and non-fungible tokens do not have a central regulatory authority and are nigh-on impossible to access without the account details and passkey.
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Numerous cases in recent years prove this. Gerald Cotten was only 30 when he died unexpectedly in 2018. As the CEO to a crypto exchange company, he held the private keys to $250 million in clients’ cryptocurrency. Another businessman, Matthew Mellon is supposed to have turned a $2 million investment into more than $500 million, but he died without telling anyone where his private keys were stored. When the 26-year-old bitcoin miner Matthew Moody died in a plane crash in 2013, he left no way for his relatives to access thousands of dollars-worth of bitcoins.
Figures suggest that some 20 percent of bitcoins are lost, i.e. the wallets containing them have not been accessed in more than five years, a significant percentage of which is attributed to investors dying without leaving a pathway so that their beneficiaries can access the accounts.
No plans in place for inheritance
The Hustle’s survey of crypto investors revealed that 40 percent of respondents did not have a plan in place for how to pass on their cryptocurrency assets. This is partly thought to be due to the demographic of crypto investors, who tend to be male millennials, who have not given thought to wills and how inheritance works.
Erin Bury set up a company called Willful a few years ago inspired by the example of her uncle-in-law who died without leaving a will, making the process of locating his assets a nightmare. Willful was designed to make the inheritance process easier, and the company’s services have been much in demand recently from younger investors who want to pass on their crypto holdings.
Ms Bury recommends investors write a detailed list of all crypto assets, where they’re located, and how to access them and store this information in a secure place. They should also assign a digital executor, whose job it will be to access and distribute the cryptocurrency and that the will is specific about who gets what. Many investors have chosen to do this the old school way – writing the details down on a piece of paper, storing it in a safe and informing relatives of where it is.
This article was submitted to be published by Finders International as part of their advertising agreement with Today’s Wills and Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills and Probate.