Whether you have a major stake in Cryptocurrency, or you are just dabbling with the relatively new concept of cash, you should ensure you have thought over what you would like to happen to your investment when you die. Not only should you think about who you would like to inherit your cryptocurrency you should consider how they will access it when you have died.
Unlike other assets such as life insurance policies, Cryptocurrency does not allow you to nominate a beneficiary. Therefore, the only way to ensure your Cryptocurrency goes to the person(s) you want it to, is to make a Will.
Cryptocurrency is unlike traditional assets, which will usually be discovered by going through your bank statements and correspondence once you have died. However, unless you have indicated in your Will or informed your beneficiaries beforehand that you have cryptocurrency, they are most likely never going to know about it. There is no paper trail.
Experts contend that nearly £3million in cryptocurrency has been lost because of lost keys and poor estate planning.
Accessing cryptocurrency requires a number of passwords and keys and to the lay person is a complex procedure. Each investor will have different places they keep their cryptocurrency and beneficiaries will need to be guided as to how to find, access and trade any cryptocurrency.
It is therefore not enough to just reference your cryptocurrency in your Will.
You should consider whether you want to leave your cryptocurrency to anybody specifically. Perhaps you have a particular tech savvy relative that would be better placed to deal with the cryptocurrency going forward. Alternatively, you may just want your cryptocurrency to form a part of your estate and pass along with your other assets to your residue beneficiary(s), these are those who will inherit the remainder of your estate once any other gifts have been made.
It is also wise to consider whether there is anything specific that a beneficiary would need to access your cryptocurrency and consider leaving that to them in your Will. For example, if your cryptocurrency can only be accessed from a specific computer, consider leaving that computer to whoever shall inherit your Cryptocurrency.
If you think that it would be easier for your beneficiary(s) to receive the value of your cryptocurrency instead of the cryptocurrency itself, you can put this in your Will. Your executors would need to be able to exchange the cryptocurrency for cash but if needed they can hire a professional to do this for them.
Cryptocurrency Access Guide
Your executor(s) and beneficiary(s) need to know the fine details of your Cryptocurrency to make sure that they can access and distribute it in line with your wishes. It is well known that Cryptocurrency is at great risk of theft. Your Will will become a public document during the probate process and so it is not advisable to put any information in your Will that would enable the theft of your Cryptocurrency.
The best way to ensure that your executor(s) and beneficiary(s) have access to the information they need without giving that information publicly is to produce a cryptocurrency guide in the form of a memorandum, that will accompany your Will. The memorandum will not become public after your death and should include the following information;
- Detailed list of your cryptocurrency and any wallets;
- Passwords and pins
- Step by step guide to explain how to access the cryptocurrency (it might be useful to include a print screen of each step)
For more information on Wills and Probate advice please call 01473 229200.