Planning for Bitcoin Inheritance – Why it matters?
It’s no secret that humans die, but Bitcoin doesn’t. That means you’ll leave your Bitcoins behind upon your death. Therefore, whether your loved ones can inherit your digital asset depends on your inheritance planning or the lack of it.
Unlike conventional assets, your heirs need passphrases, passwords, and keys to access your Bitcoin. That means if you die without disclosing this information, your beneficiaries won’t access and inherit your Bitcoin. Thus, your Bitcoins will remain inaccessible forever. Essentially, your family requires a guide to access and inherit this treasure.
Why Bitcoin Inheritance Planning Matters?
Before Bitcoin and other virtual currencies acquired their value, their inclusion into the estate plan wasn’t a big deal. However, the current valuation of this virtual currency makes it a virtual component of any estate plan. Losing Bitcoins worth millions is no not an acceptable outcome for the owner and their heirs.
However, estate planning is equally not fun. You can easily ignore the decision of who gets which assets upon your death. Many people don’t even want to think about such things. Unfortunately, Bitcoin is not like traditional assets that a bank can hold, and the court can order it to transfer them to the estate executor for distribution purposes. Also, Bitcoins are not easy for the court to give to the named heirs directly.
Essentially, a court order can be meaningless with digital assets. And this doesn’t happen because the assets are not in the legal system but the need for private keys to access them. Ideally, inheriting Bitcoin could be more about technology than a will.
Passing Bitcoins to an heir requires you to provide them with access to private keys and digital wallets. However, doing this gives the beneficiary equal control and the power to transfer the asset at any point. It could also mean exposing your tokens to hackers, meaning you and the heir could lose the digital assets. Consequently, you require a better way to plan your inheritance.
How to Plan for Bitcoin Inheritance?
Ensuring that your heirs access and benefit from your Bitcoins upon your death requires careful inheritance planning. Here’s how you can plan your Bitcoin inheritance.
- Disclose your Bitcoin holdings: Create a list of all Bitcoin holdings and their locations. That means including digital wallets and crypto exchanges with your tokens. Also, include their corresponding value. If your money is on Bitcoin trading app like www.bitcoinsystem.app then include that as well.
- Create tiers for separate assets: List the amount you want to be easily accessible and what to have in long-term storage that you might not touch for a long time.
- Develop a plan: Use technology, processes, and people to create a plan for the tiers. That way, you can maintain a balance between resilience, survivability, ease of use, and security.
- Decide what your heirs will inherit: State and national laws in every jurisdiction govern estate distribution. Therefore, follow these laws to determine what your heirs will inherit. Also, work with an experienced attorney to ensure that you do things the right way.
- Test your inheritance plan: Use a small transaction value to simulate the inheritance plan. That way, you will know whether your inheritance plan is executable. Ideally, test the technology, process, and people.
- Implement the plan: Check the inheritance plan continuously to see if anything has changed. Also, keep backups like fireproof safes, bank vaults, and attorneys.
If you think you don’t have the necessary skills or experience to plan your Bitcoin inheritance, talk to an expert. That way, you can ensure that your digital assets don’t die with you. Therefore, start planning your Bitcoin inheritance today.
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