How can I start with my crypto legacy planning?

What happens to your accumulated crypto assets after death? Most investors have not yet considered what happens to their crypto assets upon their death. Your heirs can inherit your crypto assets, but how do they gain access to these funds?

Crypto lost after death

There are numerous stories about individuals who pass away while in possession of crypto assets, without their heirs knowing how to inherit these assets. Often, access to the crypto is not clearly described, or the heirs do not know what actions to take.

One of the more well-known stories is that of Gerald Cotton, the deceased CEO of QuadrigaCX, a Canadian exchange. After his sudden death, he left no instructions on how the exchange could access the cold wallets, to which he alone had access. As a result, 115,000 people were affected.

Key considerations

To invest in crypto assets without worries, it is wise to consider what is needed to ensure your assets safely reach your heirs after your death. The following points are important to make crypto inheritance possible:

• Include crypto in your will: Clearly describe how your heirs should gain access to your crypto assets. Without clear instructions, an heir will not know where and how the crypto assets are stored. It is also advisable to involve a legal advisor or notary in the process to ensure the crypto will is legally valid and complies with applicable laws. Consider aspects such as children's inheritance rights and inheritance taxes.
• Document your access information: Ensure that all necessary information to access your crypto assets is well documented. A critical consideration in this case is security. The information and keys must be carefully stored in a reliable location.
• Choose a reliable confidant: Consider appointing a confidant who is familiar with your crypto assets and knows how to access the funds. This could be a family member or a legal advisor.
• Educate your heirs: Ensure your heirs are aware of the basic principles of cryptocurrencies and how they can access your assets. This prevents confusion and loss of assets after your death.
• Maintain documentation of purchases and transaction history: It is important to keep a detailed record of all your purchases and transactions. Although the regulations surrounding cryptocurrencies are still developing, it is strongly recommended to carefully maintain such documentation. This can be crucial in the future to prove the origin of your crypto assets and comply with any legal or tax obligations.

Solutions for crypto inheritance

To prevent heirs from facing difficult situations, there are various options to arrange the inheritance of crypto:

• Notarial custody of keys and documentation: A notary can securely store the private keys and other important documentation. This ensures that the heirs have access to this information at the time of death. But be aware that private keys will provide full acces to the funds. One consideration could be to use multi-signature wallets; multiple parties must approve a transaction, adding an extra layer of security.
• Automatic transfer systems: Some technologies and services offer solutions where crypto assets are automatically transferred to pre-designated heirs upon verification of death. These solutions can utilize complex technological concepts that may not be easy for everyone to use.
• Inheritance management via crypto service provider: There are platforms, including Blockrise, that specialize in managing and transferring crypto assets after death. These services ensure a secure and controlled transfer to the heirs.

Professional support for crypto inheritance

There are many matters to be arranged concerning managing a crypto inheritance. Pre-arranging the inheritance with a will and clear instructions can save the heirs a lot of complications and stress.

At Blockrise, we offer support in documenting the origin of your crypto assets, ensuring a complete dossier is available for the heirs when requested by banks or the tax authorities. Additionally, we provide secure storage for cryptocurrencies such as Bitcoin and Ethereum, allowing you to invest in the future with peace of mind.

The information provided in our articles is intended solely for general informational purposes and does not constitute (financial) advice.