Cryptocurrency on its own is an advanced digital disbursement scheme not subject to bank verification. It works as a peer-to-peer system which generally facilitates payment transactions from anywhere around the world, this online method of sending and receiving monetary value exists only as digital entries in correspondence to an online database instead of physical cash, but can be converted to other non-digital currencies which will eventually erupt to a greater cash value.
What happens to my cryptocurrency when I die?
Have you thought about what might happen to your cryptocurrency when you pass away? Basically, digital currency uses advanced coding encryption which makes it one of the most secure digital systems in the world hence it becomes almost impossible for third party access, so unfortunately your digital currency stays unrecoverable after your death and that’s something you definitely do not want to happen since you have beneficiaries whom you would delegate to take over your estate when you are no more.
Your crypto-wallet has so much security attached which is almost like a fingerprint lock, no one can access the block-chain account except the owner and regardless of how much have you have stored up in your virtual-wallet, the moment you pass away the pass-key goes with you except peradventure you handed over your private key to your beneficiary before your demise.
A private key is an unalterable passcode generated upon creating a new crypto exchange wallet. Each wallet has indiscriminate typescripts referred to as a public key which is obvious to anyone, this public key is an address for receiving and sending digital-currency.
Leaving my cryptocurrency in a trust
A trust is a lithe estate planning tool that can be created whilst still living or reformed for its purpose through your will after your demise. For instance, in a possible scenario, a businessman who owns a trust may act as a trustee of his own trust hence’ managing it on his own after assets have been transferred to a trust.
Eventually, if he dies at a certain point, the appointed successor named in the trust automatically takes over the trust, so the fate of the trust now lies in the directories given by the trust owner which must have been documented already. For example, the terms of the trust may be to allocate assets to its beneficiaries immediately or the successor may be directed to carry on in the management of trust on behalf of its legatees. Below are a few benefits of leaving your cryptocurrency through a trust:
- Your cryptocurrency will be traceable by your beneficiaries and eventually accessed if you provided the private key at an earlier time
- Safekeeping your cryptocurrency details in a trust ensures the privacy of your records and will only be available to your successor trustee
- Using a trust can be a great relief for your beneficiaries, basically, your successor will provide all the help they will need with managing the cryptocurrency they inherit even if they are not tech-savvy
- Using a trust avoids the process of probate hence relieving your beneficiaries of extra expenses and extra time in accessing the digital coins you left behind
How can I transfer my bitcoin to trust?
Transferring your bitcoin to trust isn’t the same for cash or investments because bitcoin is a cryptocurrency that operates on a shared public ledger technology but can only be accessed by the owner. However, the purpose of leaving your cryptocurrency through a trust is to ensure it is discoverable by your beneficiaries but on the flip side if the private key to your crypto wallet is not accessible then your stored cryptocurrency is good as gone. So in other to include your bitcoin in your trust it has to be stated in writing so your successor is aware of the existence of a crypto wallet to your name.
Estate planning for my cryptocurrency
Before including your cryptocurrency in your estate planning, first, you need to understand the challenges you will encounter because unlike other assets in your estate, cryptocurrency is a virtual asset with an anonymous structure hence there is no personal information linked to the e-wallet owner.
This poses a challenge when including your digital currency in your asset portfolio, for instance, when creating a living trust a trustee can allocate assets to its beneficiaries under the supervision of a successor trustee who oversees the distribution of assets according to the dictates of the Trust owner who may have passed away at the time.
The reverse is the case when it comes to cryptocurrency because there is no legal information, statement of account, or certificate of ownership, the only purpose to including your digital currency statement in your estate plan is to ensure it doesn’t go unnoticed.
In conclusion: Your cryptocurrency seems like a volatile and high-risk investment type which is operated virtually although, at the disadvantage of third party access, you should include it in your estate plan and ensure your private key can be accessed by a trusted person in case of your demise.