Advice Admin & Legal A Guide to a Modern Crypto Will

A Guide to a Modern Crypto Will

What is cryptocurrency?

If you’re reading this you probably don’t need us to tell your cryptocurrencies from your coins.

But for those that don’t know. A cryptocurrency is a digital currency that doesn’t rely on external institutions to verify transactions. These digital assets run on decentralised systems that allow for secure online payments and transfers.

Whilst this technology is relatively new, it’s no longer niche. Many of us have now purchased or are thinking about buying some form of cryptocurrency, such as Bitcoin or Ethereum.

What are the different types of cryptocurrency

There has been an explosion of the number of cryptocurrencies available. Many of them have different purposes. Bitcoin has been leading the way in the last decade and the other coins are often considered alt coins (alternative coins).

Some currencies you have probably heard of:

  • Bitcoin
  • Ethereum
  • Binance Coin
  • Solana
  • Doge Coin

How does the way crypto currency works affect how it’s inherited

If you’re mulling it over, you might be wondering about the value of these currencies beyond your lifetime - i.e. what happens to your crypto millions if you keeled over tomorrow? Would they die with you, or could they pass to your loved ones?

You’d be right to give this some serious thought. Inheriting assets can take time even with a legal will and when you’re dealing in GBP and the bank.

Crypto, like Bitcoin and Ethereum aren’t institutions with a call centre and a manager to speak to. These assets don’t have an authority you can go to after someone dies in order to access assets and transfer them to the relevant beneficiaries.

So how can you safely leave Bitcoin to your beneficiaries?

For security reasons, crypto can only be accessed if you hold the private key to the digital wallet that it is stored in. Of course you can simply include the private key to your digital wallet in your will, but it’s a bit more complicated than that. It’s important to understand how crypto is stored before thinking about leaving it to someone in your will.

How is cryptocurrency stored?

Cryptocurrencies are stored in crypto wallets. These wallets have an address (a bit of code) that allows you to send and receive cryptocurrency on a specific blockchain. Each wallet has a public key and private key. Knowing the private key allows you to access the wallet, kind of like important passwords, you should never share this information as it means anyone could access your wallet.

Is crypto currency counted in your assets when you die in the UK?

Yes. Cryptocurrencies are counted as part of your assets when you die.

What happens to cryptocurrency when you die in the uk?

If you’ve left your cryptocurrency in your will to your beneficiaries then your executors will need to be able to locate and access your digital wallets without security concerns. After they’ve done this they will be able to transfer the crypto assets to your beneficiaries.

Unfortunately there are many examples of people being unable to access their loved ones crypto assets after they die. Usually in these cases often nothing can be done and the assets are lost permanently.

Can you create a crypto will in the UK?

Leaving crypto in your will is important as it provides your beneficiaries with the legal right to be transferred ownership of your assets.

Additionally in your will you can leave instructions about your cryptocurrency and private key information, this ensures your security is not compromised.

In the UK there is no specific ‘crypto will’ however you can use a normal will to specify who you’d like to inherit your crypto assets. You will need to take further steps to provide instructions on how to obtain the private key to access these assets. You should not include your private key information itself in case this is hacked or shared.

Some people might write their private key down and then store it in a safe or a vault at a bank. You would then leave instructions to access this safe or vault with your will. Alternatively you may use a cryptocurrency bank or a multi-sig wallet.

In the end the most important thing is to leave clear instructions for your beneficiaries as they may not know or understand how cryptocurrencies work.

Why should you add your cryptocurrency assets to your will?

Cryptocurrencies are an asset, and therefore part of your estate. If you would like to leave them to specific beneficiaries or split them in any way you can do this in your will. Without leaving them in your will, your beneficiaries and executors may not know they exist and they may be forgotten about.

Can you leave NFTs in your will?

Of course. Just like your cryptocurrency tokens, your non-fungible tokens can also be left in your will. NFTs are stored in a cryptocurrency wallet in the same way currencies are and so should be treated in the same way when writing your will.

Leaving cryptocurrencies with Octopus Legacy’s online will

As with your other physical assets you can easily leave any cryptocurrencies you own in our will to your loved ones. In addition to this we believe it’s important to create a guide for the beneficiaries on how to access these assets when the time comes. This guide may have information on where important information is stored or how a wallet can be accessed.

Need a helping hand?

You can ask our expert team who will support you every step of the way.

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