How To Pass A Cryptocurrency By Inheritance After Death
At the end of April, Ripple’s market capitalization sharply lost half a billion dollars — at least until someone finds Matthew Mellon’s crypto key. After his unexpected death, hundreds of millions of dollars were stuck somewhere in the depths of the blockchain, and the family of the deceased was desperately trying to find a way to reach them.
The heir to the family of American bankers (and the early investor in XRP) struggled with drug addiction and, apparently, was sent to a rehabilitation center. Somewhere along the way, he decided to try the Ayahuasca’s hallucinogenic drink, and his journey broke off a heart attack. Most likely, this is not the first crypto state dissolved in the air.
Perhaps Mr. (or Ms.) Nakamoto leads a very modest lifestyle, but it is much more likely that the founder of the Bitcoin network left this world, leaving behind millions of unclaimed Bitcoins, not to mention the Bitcoin Cash, Gold mountains attached to them. In most cases, tokens are lost due to carelessness, and not due to hackers. And as early investors become older (and richer), they should think about how their fund does not disappear after their death. Here are some tips for those who do not want to remain as a hodler in the afterlife.
When owners of e-wallets with a massive amount of bitcoins die, lawyers fight over how their bitcoin can be transferred to their relatives of the deceased. The first cases of this kind are the cornerstones of legal practice. With that, it is possible to judge how this part of lawmaking and law enforcement will develop.
There are several cases where young Bitcoin owners die. And their families could not do anything with their savings in cryptocurrency. When the heirs are told that their loved ones kept all the money in bitcoins, they panic or rush. On one hand, it is not clear how to get these savings and on the other hand, in a few years, they could grow significantly.
One of the most recent cases of this kind concerned a guy who died in the US state of Colorado. In 2013, he bought bitcoins for $13 apiece and in 2017, their price rose to almost $5,000.
The grieving relatives became the heirs of a considerable fortune — the question was how to get access to cryptocurrency.
Bitcoin is a virtual form of money that is protected from hacking and embezzlement using cryptographic methods. It increases the safety of keeping the money. As a result, there is a risk of losing bitcoins if their owner dies. There is a chance that a huge fortune in digital coins will be lost by the family forever. This is the problem of the majority of relatives of technically gifted and progressive-minded cryptocurrency holders and this market has tens of billions of US dollars.
Bitcoins are stored in electronic wallets protected by a “public key”, randomly typed with a symbol. It is visible to everyone and is the address of sending and receiving cryptocurrency. A “private key” allows a person to get sole access to their savings in the wallet. If the owner of the state in Bitcoins dies, without leaving a private key to anyone, then his heirs will not be able to get access to his wealth. To prevent such incidents, all wallets owners must create written copies of private keys. The list of private keys to the purses can also be given to proxies, specified in wills.
Not all Bitcoin holders who died expected such incidence and prepared litigation on such issues. So, the relatives of the guy who died in Colorado were surprised when they saw that many of his bank savings had migrated to the Coinbase account. Having collected a pile of documents, armed with the support of lawyers on wills and inheritance, they went to the management of the exchange to collect the money of the deceased relative.
The process of transferring money to the heirs was very difficult. Other exchanges also create a sea of difficulties in returning funds and not from fraudulent or bureaucratic motives. Just the procedure is not yet clear.
What to do in situations where the relatives of the deceased know that he had a lot of money, but after his death, it turned out they could not be found? And if it is not known, does the deceased have a cryptocurrency account at all? In some countries, lawyers look into tax returns.
Experienced investors in Bitcoins fill them in and point out there as a source of income exchange of cryptocurrencies. To make such actions, lawyers highly recommend. Indeed, in the future, unclaimed digital coins can return to the general circulation. So far there is no such practice, but if we draw analogies with the bond and stock trading market, there are such options.
The problem also lies in the fact that some heirs do not want to stir up the deceased’s crypto account. They are not looking for passwords, not trying to access them. They are sure that nothing can be obtained from a couple of hundreds of bitcoins. But if you still try, the effort can be rewarded with a state equivalent to millions of dollars. American lawyers advise their citizens not to miss this opportunity. Indeed, unresolved situations even in the young branch of the cryptocurrency almost never happen.
Most crypto accounts are not well protected, simply because the balance of funds on them is too small for the owner to worry about. But one should not neglect even small things, which some early investors learned from their own bitter experience.
You should share your private keys with your loved ones — of course, if you trust them. With the help of mnemonic phrases from BIP39, you can easily save your wallet data even on innocuous-looking scraps of paper — just make sure your relatives know where they lie.
What should be avoided: Flash drives are not too durable, and how many registries will exist is also impossible to say. If you want your information to be stored for several decades, choose a pen with a paper or steel plate.
Author Bio:
Melissa Crooks is Content Writer who writes for Hyperlink InfoSystem, a mobile app development company in New York, USA and India that holds the best team of skilled and expert app developers. She is a versatile tech writer and loves exploring the latest technology trends, entrepreneur and startup column. She also writes for top app development companies.
Published at Fri, 05 Jul 2019 10:19:00 +0000
