Cryptocurrency and digital assets are one aspect of your estate that you may be worried about, especially when it comes to recording them in your Will. But bequeathing cryptocurrencies and digital assets is a lot simpler than it may first seem. After all, those who hold the private keys own the crypto assets.
Passing on your private keys
When you want to give your cryptocurrency asset away, all you need to do is give a copy of your private keys away. When it comes to leaving the details of your private keys in a will, you might want to take some precautions.
Trust is a big part of deciding who to share your private keys with. Those who have the private keys of a cryptocurrency wallet have access to the cryptocurrency in the wallet. There is nothing to stop those who have the private keys from transferring the cryptocurrency assets into their own wallets.
This means that you may want to leave instructions as to the whereabouts of the private keys in your Will rather than the private keys themselves. This prevents people who you are not bequeathing the cryptocurrency to from accessing it or those that are inheriting it accessing it before it belongs to them.
TrustVerse
If you want a more secure way of leaving your loved ones your cryptocurrency, then you may want to investigate using purpose-built protocol software like TrustVerse. This type of software has been designed to automate the process of ownership and asset transfer from your crypto wallets to those of your beneficiaries.
This solution to passing on cryptocurrency securely doesn’t require you to hand over your private keys. TrustVerse is an example of a protocol for handling digital assets. This includes managing your cryptocurrency and transferring ownership of those assets. The particular element of TrustVerse that deals with legacy planning for cryptocurrency is Pluto.
Once you’ve selected an inheritance design that defines the conditions under which the cryptocurrency assets are to be endowed, a smart contract is created in order to administer the whole process. If the owner of the assets dies suddenly, then all that is needed is for a death certificate to be submitted so that the beneficiary can inherit the assets that are defined in Pluto’s smart contract.
If multiple beneficiaries are to inherit the assets, they must have reached a consensus before the cryptocurrency assets can be unlocked.
Inheritance Tax
Like any other asset, cryptocurrency and assets are also subject to inheritance tax. It is treated as property in both the UK and US law, so the executor of the estate must include the value of the cryptocurrency assets in the estate valuation. There are ways in which you can distribute your crypto assets before you die so that your beneficiaries can enjoy their inheritance without the dreaded tax.
Need help with sorting out your crypto assets? Contact our experts today to see how we can help you.