It’s a common worry among those making out their will that their assets might not go where they want them to. Now, with the advent of cryptocurrency and blockchain technology more and more people are asking the question: what will happen to my digital assets after I pass on?
If you are planning ahead, we know that making arrangements with funeral homes and cremation services can be enough to worry about. That’s why we’ve created this guide to help you make an informed decision about the crypto coins and digital assets you wish to bequeath.
Protect your private key.
Whether your assets consist of Litecoin, Ethereum, Bitcoin cash, or another popular cryptocurrency, they are kept safe through the use of a private key or a secret phrase. If you wish to give your crypto savings as an inheritance or a donation, then that third party will need to have access to your private key.
Remember that if this is lost, not even the most advanced mining software could retrieve it. We understand the fear of granting easy access to your private key to hackers, this is why you do not want to put the key directly in your will. If you consult a lawyer or a financial advisor about your financial investment decisions, then you should ask them how to keep the secret phrase safe in a PO box or secure bank lockbox.
Remember, just because you’ve made arrangements for a funeral service and a cremation service, does not mean that you need to stop investing. However, you might want to switch to a more conservative strategy and find a crypto exchange to help you do it. If you have a large store of Litecoin, for example, then the best Litecoin exchange will explain cryptocurrency exchange rankings for bitcoin in layman’s terms on their mobile app and charge a very small commission fee.
Invest in cold storage.
Cold storage (sometimes called a cold wallet or a hardware wallet) is the best way for you to protect your crypto, NFT’s, and all other digital assets. If this is your first time hearing about a cold wallet, don’t worry, the process is relatively simple, and some of the best crypto exchanges offer tutorials on how to do this.
Using an external hard drive is the best way to prevent the interference of any third party because they do not have access to your variety of coins like Altcoin or Ether since they will no longer live online once you have put them into cold storage. Much like the access key, a cold wallet can be kept in a PO box or a bank lockbox so that you are sure that your funds go where you want them to go. Once the desired parties receive the hard drive they will have access to the funds you have bequeathed them with.
Leave clear instructions in your will.
Although it might seem logical to leave your private key or secret phrase in your will for the sake of simplicity, we strongly urge against this. The main reason for this is that anyone who reads your will could take the key, log onto an exchange platform in your name, and begin to exchange cryptocurrencies. If this happens, any user of the platform could exchange the crypto for a fiat currency, and it would be gone forever.
To ensure that the loved ones or organizations you have chosen actually receive the digital assets you desire, we strongly recommend using a bank or a PO box as a middleman to help you with the business intricacies of this process and to provide security.
Instead, we advise you to leave clear instructions in your will as to who will be receiving the envelope with the secret phrase or the cold wallet. You can then leave instructions with the bank and your lawyer to ensure that both your assets and your legacy are in good hands.