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Why shouldn’t you keep your cryptocurrency key secret?

On Behalf of | Feb 24, 2022 | Estate Planning |

Secrecy and security are crucial to cryptocurrency’s rising popularity. If you store money under the bed, someone can break in and steal it. If you keep it in the bank, fraudsters could access it. If you put it in cryptocurrency, no one need ever know you have it. What’s more, even if they know it exists, they cannot get their hands on it.

That is fine while you are alive, but what about when you die? Many families have found themselves in the unenviable position of knowing their deceased loved one had money they would want to pass on to them but forgot to make it possible.

You cannot access cryptocurrency without the passcode

You write in your will that your kids can split your cryptocurrency 50:50. Since you were an early investor, it is now worth a considerable amount. Yet they cannot access it if you do not give them the means to do so.

You have two choices to cater for cryptocurrency in your estate plan 

First, you could tell the kids your passcode. That is fine if you are sure you can trust them not to touch it until your death.

Second, you could pass the details to a fiduciary. Again, you need absolute faith in that person’s honesty.

Even if you trust the people you give the codes to, you need to be sure they can safely note the code down somewhere no one else can find or force them to disclose. Codes are generally 64 digits, not the sort of thing you can store in your head.

Cryptocurrency is just one of many things you need to consider when creating your estate plan. Seek legal help to find out the best way to handle the unique needs of each type of asset you hold.