The emergence of Bitcoin has reshaped our idea of storing value as we witness the birth of a brand new asset class. In the last decade, Bitcoin has been the best performing asset appreciating well over 9 million percent in that time, and many experts claim that it can continue on as the world adopts an internet native currency.
If you are a strong believer in the future of Bitcoin and would like to hold the asset for years to come, you also need to prepare for the unfortunate events where you could no longer be alive to access or spend those Bitcoin. Passing on your digital assets to your loved ones is a relatively new concept but one that will grow in importance as Bitcoin continues to appreciate in value.
To ensure your loved ones can inherit your Bitcoin, you should consider the following:
- Add your Bitcoin in your will
- Include information about your wallets used in your will
- Create a memorandum to your choice with passwords, private keys and PINs
- Include a step-by-step guide to explain how your beneficiaries can access your cryptocurrency.
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List cryptocurrency in your Will
Probably the most obvious step would be to update your will or create a will that includes your Bitcoin. If something is not explicitly referenced in your will, it falls under your estate as catch-all property along with other miscellaneous accounts and items deemed to be under your ownership.
Physical ownership tends to be easier to track down, having paper trails like receipts and certificates of ownership. However, Bitcoin doesn’t leave much of a paper trail–if any–and it’s almost impossible to discover if you don’t know where to look.
List cryptocurrency in your Will
Probably the most obvious step would be to update your will or create a will that includes your Bitcoin. If something is not explicitly referenced in your will, it falls under your estate as catch-all property along with other miscellaneous accounts and items deemed to be under your ownership.
Physical ownership tends to be easier to track down, having paper trails like receipts and certificates of ownership. However, Bitcoin doesn’t leave much of a paper trail–if any–and it’s almost impossible to discover if you don’t know where to look.
To avoid your beneficiaries missing out on what could turn out to be life-changing value, ensure that your Bitcoin is added to your will.
List Your Digital Wallets in Your Will
Adding the fact that you have Bitcoin in your Will isn’t enough; you also need to add details on where it can be found. You will need to state what wallets you are using, exchanges you have accounts with and where it was purchased. Let beneficiaries know if these are custodial or non-custodial services, so your loved ones know where to look and who to contact.
Let them know if you’ve stored your Bitcoin on the main-chain, in cold storage, hot wallet, if you’re using side-chains like L-BTC or the lightning network or if you have any wrapped Bitcoin on third party chains like Ethereum.
Create a Bitcoin Access Guide
You may be comfortable using cryptocurrency, but your beneficiaries might not be, nor will they have all the expertise to recover funds from the various storage options you use to keep your Bitcoin safe.
Even if they are familiar with Bitcoin, it still pays to leave plain language instructions that will help remove some of the stress and frustration of trying to figure out how to recover the funds.
The guide may make sense to you, but it’s important to run a test to recover funds. Take them through a practical walkthrough of these instructions. This could be through a script or a video tutorial, which will ensure that you included all the information your loved ones need to access your cryptocurrency.
