A question that is being asked more frequently these days, is what happens to your cryptocurrency when you die? What if that’s your main asset—not real estate, or physical money?
Bankless Times recently reported in the article, “What happens when your estate is cryptocurrency?” that cryptocurrency like Bitcoin is stored in virtual wallets.
A wallet has a combination of random characters called a “public key” required for sending or receiving the currency. There’s another key, called the “private key,” which is like a password you’d use to access your account.
Imagine that a cryptocurrency owner dies, without divulging their “private key.” This could mean the heirs will have a tough time gaining access to the funds. They would actually never get to it.
That is why it’s so important, as part of your estate planning, to put your “private key” details with your estate planning documents like you would access to your digital assets. Another option is to put the “private key” on a flash drive, so it’s in physical form. However, there are also risks with this, like the “private key” being deleted. There are third-party exchanges that many Bitcoin investors use which act like banks. They keep the “private key” for the customer.
You should also tell your family that you have cryptocurrency in a wallet, because a third-party service won’t announce to your next of kin that you have cryptocurrency.
Handling your estate when you only have cryptocurrency can be tricky, but there are ways for you to do it.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: Bankless Times (March 6, 2018) “What happens when your estate is cryptocurrency?”