“Cryptocurrency is now a major force. However, there are still some discrepancies in relation to its overall impact as a currency.”
Secrecy is the key to bitcoin or cryptocurrency. It’s invisible, so there’s some degree of mystery surrounding this new type of money.
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 into your will. This is safer that making a note of it somewhere, which could easily be discarded and lost forever.
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.
Reference: Bankless Times (March 6, 2018) “What happens when your estate is cryptocurrency?”