What Happens to Your Crypto When You Die?
| — As an increasing number of people own cryptocurrencies, the question “What happens to your crypto when you die?” is becoming more common. And it’s a concern worth taking care of.|
— While the crypto inheritance process bears some similarities to other traditional assets, it requires more than just a will and an estate lawyer who knows about your assets. Upon your demise, the beneficiary should be able to access private keys and recovery phrases to be able to inherit your crypto assets.
— To do that, you must plan ahead of time. Thankfully, multiple crypto inheritance services such as Safe Haven, Casa, and TrustVerse have products that securely pass on your crypto wealth to any family member(s) of your choice.
— In this article, we discuss why you need to plan ahead of time for crypto inheritance and what services can help you pass on your assets securely.
Confused about what happens to your crypto when you die? Then this article is a must-read.
Between 20% to 33% of the total bitcoin supply is considered lost. FOREVER. Forgotten passwords, lost private keys, and the death of owners are a few of the several reasons for that.
We’re sure you’d not want your Bitcoin and other cryptos to face the same fate. And say, if you were to die someday unexpectedly, would you rather have your cryptos be lost forever or passed on to your family members so they can benefit from your efforts? The latter, right? That’s why it is so critical to plan your crypto assets’ inheritance ahead of time.
Had it been traditional assets — land, stocks, commodities, etc. — it wouldn’t have been impossible for your family members to recover them if you were to die under unforeseen circumstances. Besides, people often have a will in place to transfer their traditional wealth in the case of their death or disability. The same can’t yet be said for crypto assets.
Why is recovering lost crypto almost impossible
It is a feature, not a bug.
Cryptocurrencies are designed to offer you ultimate financial freedom and true ownership over your assets. To achieve this, cryptocurrencies are based on a decentralized network called blockchain that secures your assets. On this decentralized network, you own a private key and a recovery phrase that make you the verifiable owner of your assets and allow you to use those assets.
The private key and the recovery phrase are the only ways you can access your crypto assets, and the best part is that neither of these is stored by any central entity, making you the one true owner of your assets. So, as long as you securely store your key and recovery phrase, no other person or entity can ever access your assets. And that’s very unlike fiat currencies stored in bank accounts, where banks have the ultimate control over your funds.
This ownership, this freedom that cryptos offer is exciting and much-needed, but it comes with great responsibility. As no one else can access your keys or funds, your cryptos may never be recovered by your family members if something were to happen to you under unforeseen circumstances. To prevent that from happening, you must plan ahead of time.
Your crypto when you die
You’re probably confused right now. We’ve often told you not to share your private keys or recovery phrases with anyone. And now, we’re telling you, if you die without one of your family members knowing how to access your cryptos, they will never be able to inherit them.
So, how do you do it? How do you pass on your crypto legacy? Do you write your recovery phrase down on a sheet of paper and share it with the most trusted member of your family? Or do you just store your recovery phrase in a flash drive and store it inside your secret safe in hopes that one of your family members will discover it after your demise and recover your assets?
While that choice is for you to make, we have a more advanced and more secure solution for you.
Surely, having a will can help notify your family about the cryptos you own, but it won’t help them access it without the private key and recovery phrase. Thankfully, there are now various crypto inheritance services that you can use to make sure your crypto assets are passed on to your family members without you having to disclose your private keys or recovery phrase beforehand.
Let’s dive in and find out what services can help you do that.
Inheriti by Safe Haven
Safe Haven is a digital asset management platform that claims to have built the first 100% decentralized digital asset inheritance service called Inheriti. This solution encrypts critical data such as your private keys and recovery phrases and stores them on a decentralized storage system. You can then select a beneficiary to whom you want the data to be disclosed in the event of your demise. The beneficiary can then share the required legal documents to release the keys and recovery phrase to gain access to your crypto assets.
To learn how you can use Inheriti to safely pass on your crypto wealth, read their step-by-step process here.
Covenant by Casa
Covenant is a dedicated Bitcoin inheritance service by Casa that comes integrated with its crypto custody service called Diamond. The service uses a three-of-five multisig standard for securing your Bitcoin and you can also choose to have a sixth key to share with your estate lawyer. Upon your demise, Casa takes the responsibility of guiding the beneficiary of your choice and transferring your Bitcoin to them while ensuring every process follows a legal approach. You can learn more about their services here.
Be a person with a plan
The fact that you have invested in cryptos shows that you are a person with a plan. So, why not plan the last bit of it? Why leave out the inheritance of your cryptos in the hands of fate? Go on, take out some time, put together a plan, take the help of one of these emerging crypto inheritance services, and rest assured that your crypto assets, your legacy will be securely passed on to your family.
For more tips on how to keep your hard earned crypto in the right hands, check out our School of Block episode on keeping your assets safe.