Cryptocurrency is an increasingly popular method of online payment. It is best understood as a form of currency that exists as a digital asset, with no paper or coins. One of the main benefits is that it is secured in such a way that it is near impossible to forge or double-spend.
Cryptocurrency, the most well-known is Bitcoin, operates within blockchain technology. Blockchain is a method of ensuring the integrity of the data, essentially decentralising the storage of the data in a way which means that no single organisation or individual (like a bank) can have overall control.
While digital currencies are relatively new they still form part of your estate when you die. They’re classed as digital assets similar to frequent flyer points or gaming credits so you want to make sure they’re included in your Will.
There are two key things to consider about this digital legacy.
1) You will need to properly define Bitcoin or any other digital currency in your Will if you want it to pass in a specific way. If you already have a Will you will need to check and make amendments if they are not covered.
2) The other important factor to consider is how your beneficiaries are going to access your bitcoins.
Passing on digital currency is more complex than passing on money stored in a traditional way such as a bank or savings account. Instead Bitcoins are stored in an encrypted electronic wallet. This wallet can be accessed only by an electronic key or password.
Unlike banks and building societies, cryptocurrencies do not store names and addresses against the electronic wallets, so aside from the electronic key there is no way to identify who a wallet belongs to.
It’s vital then to make sure that you keep a secure copy of the key for your executors. Without it, it will be virtually impossible for them to access the wallet and the money will be lost.
You could consider entrusting the key with a secure storage service, in a safety deposit box or with your executor or a trusted family member. The main thing here is that it needs to be someone you trust as you are handing them access to your money.
Services from legalmatters during Covid-19 pandemic
Here at legalmatters, we continue to do everything we possibly can to service our existing and new clients during these very difficult times.
Our ability to provide remote services makes us stand out from the crowd. With legalmatters, your will, power of attorney, probate, trust and tax advice, conveyancing and legal services for business owners, can all be dealt with over the phone, by video conference or by email and documents are sent to you by post. We are also advising our clients on signature processes bearing in mind social distancing measures.
Meanwhile, the office continues to operate with minimal skeleton staff for the protection of our staff, clients and visitors, enabling us to still process physical documents for our clients. If you do find that you need to call into the office for instance to have documents witnessed when it is otherwise difficult for you to arrange that with family and friends then do please get in touch.
Speak to one of our expert Will writers about including a digital legacy in your Will. Call us on 01243 216900 or email us at firstname.lastname@example.org.