Wills and Crypto Currency – Who’d Have Thought?
Crypto currency and crypto assets are a haze for people over a certain age. Correct? Maybe not based on what we’re seeing.
While most people are aware crypto-assets are highly risky and speculative we have been surprised at the number (still relatively small) of people we have recently met to discuss their Wills who have invested. They are by no means all Millennials or Generation Z’s.
Can crypto assets be willed? The simple answer is, like any other asset, they can. For the past several years we have included a clause along the lines below in our standard Wills:
“I AUTHORISE my Trustee to access, handle, distribute and dispose of my digital assets (including but not limited to all digital rights, accounts, assets and device content) and my digital assets which are not otherwise the subject of a bequest shall form part of the residue of my estate.”
As this is an area of law in its infancy it is not all plain sailing. Apart from inheritance tax considerations, a number of other issues come into play including exactly what is the relevant jurisdiction (most often it will not be Ireland) what inheritance laws apply and, crucially, how to ensure access for your successors?
The implications of missing lost cryptocurrency passwords has been central to the controversy surrounding the death in 2018 of Gerry Cotten, owner of Canada’s largest cryptocurrency exchange. It has been claimed he died without leaving access to some C$250 million in bitcoin owed to investors. As the access argument rumbles on the affair has become the subject of a Netflix documentary “Trust No One: The Hunt For The Crypto King”.
What you need to do to protect Digital Assets
At a minimum you should:
- Include your Digital Assets in your Will. Your Will should clearly outline how you want your executor to handle and distribute such assets.
- Inform a trusted person (e.g. your executor) where you keep the details of your cryptocurrency accounts, including the private keys. You might consider using a Digital Wallet. Similar to a banking app, a digital wallet is an app that stores and holds on to your Cryptocurrency. Depending on the wallets features, it may include a death-management process.
- In addition to a digital wallet, you could consider holding specific instructions and private keys in a safe deposit box or fireproof safe. You might also consider using password managers, which can store your account information, including logins and private keys, and then share the master access password with your executor (not all password managers allow this) or store it with your Will.
