.png){kind=logo}
- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
- Insights
- Cryptocurrencies
- Stocks
- White Papers
- Industry
- Geography
Death isn't something we like to think or talk about too often, but it's important to plan for all eventualities, especially if you've invested in crypto.
According to data from blockchain analytics company Glassnode, estimates are that more than 10% of bitcoin's circulating supply is lost forever. Why it's lost, nobody really knows. However, one assumption is that it's lost because people hadn't given enough thought to Arizona probate or had adequate measures in place for after they've passed away.
If you've not thought about the future and want to ensure your loved ones receive your crypto and it's of value to those you leave behind, here are the things you need to do.
Before you start worrying about how best to secure your crypto assets securely, the first step is to decide who to tell about them. It's not as easy a decision as you might think because it's not just a case of who you trust. The person you tell also needs to be tech-savvy because they'll need to understand how to access your crypto-based wealth.
If the person has no idea how to use a hardware wallet or an exchange, they'll have to either find or employ another person to help them or try and learn how to use crypto platforms and devices themselves.
This can be a security risk because sending crypto to the wrong address is very easy as is getting locked out of devices or withdrawing assets using the wrong token standards.
Something else to consider is how much information should you divulge? You've got to disclose enough information for someone to be able to access your crypto holdings. However, should you trust that information to one person or divide the instructions among a few trusted people you know? Only you know the answer, but it is something you'll need to consider.
Once you've decided on the person or persons who will be the beneficiary of your crypto funds, the next step is to outline the procedure for locating and claiming them.
Your instructions should include the physical location of any hardware wallets you own and what hot wallets your crypto is stored in.
If you keep your assets in several places, such as DeFi pools, centralized exchanges, or non-fungible token marketplaces, now might be a good time to consolidate them into crypto wallets that support multiple types of assets.
Make a list of all the passwords, private keys, and seed phrases for your crypto wallets, email accounts, and exchange accounts the beneficiaries will need to access your funds.
If two-factor authentication is switched on, you'll also need to provide the location and password for the device where the app is stored.
If your accounts are set up to receive SMS security messages, you'll also need to include the details for the location and password or your current mobile device.
You might feel that it's necessary to include steps on how any beneficiaries should handle or liquidate your assets. For example, you might specify which exchange is best to use or outline a brief walkthrough guide on how they can set up their own wallet and transfer funds across.
Something to think about is the fact that platforms can come and go over time. In addition, security breaches may force you to transfer funds to new wallets. What this means is that you need to keep your instructions up to date.
Writing seed phrases on post-it notes and sticking them to the fridge or sending the information via email is not the smartest thing to do.
Ideally, you should copy the information down on paper and make several copies. Each copy should then be stored in different locations to remove any single point of failure. For example, say you kept only one paper copy on a bedside table and your house caught fire. Your beneficiary would never be able to access the funds.
If you want to maximize the security of your sensitive crypto information, there are companies that provide storage for seed phrases and passwords on metal plates. This provides additional protection against water damage, house fires, and most other things that could potentially damage a paper copy.
One final point is that you shouldn't include the list of your crypto information in your will. This is because any information contained within the will, including crypto passwords, becomes legally available to the public once you've gone.
One of the biggest advantages of a crypto wallet is that no one can get into it while you're still alive. However, this is not so great once you're dead.
Now you know what steps to take to ensure your cryptocurrency goes to the right people you can sleep at night knowing your loved ones will be taken care of.
The information posted in the article is for educational purposes only. By using this, you agree that the information does not constitute any investment or financial advice. Do conduct your own research and reach out to financial advisors before making any investment decisions.
