Cryptocurrency is rapidly emerging as an alternative to traditional forms of money. Bitcoin, Ripple and Ethereum are just three of the currencies that have hit the headlines in recent months.
As with any other kind of asset, cryptocurrency can be passed on when you die. If you have a will, you can leave your assets to whoever you like. It’s then up to the executor of your will – the person you designate in your will to carry out your instructions.
However, one big problem faced by the executor is getting access to your cryptocurrency.
With a conventional bank account, the executor would simply get in touch with a bank, providing evidence such as a death certificate, to be granted access to your account. But a cryptocurrency has no overarching organisation behind it. What’s more, the data connected with your holdings isn’t stored in one location but is spread across the internet. There is no one to contact.
What Is A Safe Place for Keeping Cryptocurrencies?
Cryptocurrency is also designed from the outset to be secure and requires a password to access. It’s always prudent to keep passwords private, so this would prevent anyone else from accessing your account.
Fittingly, there’s a technological solution to this conundrum. Recently, a company called Digipulse announced a service that stores crypto wallets in what it calls a “decentralised vault”.
Digipulse estimates that 23% of all bitcoins have been lost because their owners can no longer access their digital wallets. The value contained within them can never be used by anyone else.
To get around this problem, Digipulse continuously monitors your account. If there’s no activity after a set period of time, the service will send details of how to access your vault to a named recipient.
However, it’s worth saying that while the value of bitcoin and some other cryptocurrencies have seen spectacular gains, they’ve also had spectacular falls. If you haven’t previously invested in cryptocurrency, we strongly recommend you take financial advice.
If you do use a service like Digipulse, it’s still worthwhile naming a beneficiary of your cryptocurrency in your will. That way, if there was a dispute, at least you have the peace of mind of a tried and tested technology.
The irony: old technology – a Last Will and Testament – with hundreds of years of Law and legal history may help ensure your new technology assets go where you want them.