One of the questions we now ask our clients at our initial will meeting is “Do you have any cryptocurrency?”.
Often this is met by, “What on earth is that?”!
Cryptocurrency, often referred to as ‘crypto’, is a digital asset that is secured and traded using ‘Blockchain’ technology. The currency is stored in a digital wallet and private keys keep the crypto secure. You can, buy, sell and trade cryptocurrency for many goods and services.
So why is this important to disclose if you do have cryptocurrency? Well, digital assets do form part of your estate and as such need to be included when discussing your estate.
The Law Society states that “Millions of pounds worth of cryptocurrency have been lost forever because owners have died without leaving a contingency plan. According to a 2020 study by the Cremation Institute, nearly 90 percent of all cryptocurrency owners are worried about what will happen to their crypto when they die, but rarely do they make provision for ensuring it is not lost forever”.
Like all tangible assets, provisions can and should be made within the confines of a will, however, next comes the tricky part …… accessing the cryptocurrency.
We are constantly told not to disclose our pin numbers or passwords to anyone, and the same can be said with the drafting of your will. Private keys must be kept private and therefore should not be written into your will. The main reason being that as soon as probate is granted, your will becomes a public document accessible to anyone who wishes to read it for just the small fee of £1.50. The last thing you would want is for an unscrupulous person to have access to your crypto.
You could leave a separate memorandum of wishes and record the details there. However, we are reminded and regularly prompted to update passwords and pin numbers to ensure maximum security at all times. Unfortunately, it may be that the memorandum is not kept up to date and as such the digital asset is lost.
There has been some progression since crypto was first introduced which perhaps offers a little assistance in legacy planning such as purchasing and storing cryptocurrency at a cryptocurrency bank who manage the keys on your behalf.
We would suggest you seek independent financial advice from a cryptocurrency specialist or contact your digital currency provider directly in respect of estate planning.
This medium is a new concept, very much in its infancy and unregulated unlike other financial products such as saving, pensions and mortgages. Therefore it is more than likely that each cryptocurrency provider will have different rules and requirements for your Executors to gain access to your online assets.
if you have crypto currency and wish to leave this to somebody in your Will, or even if you don’t have crypto currency but would like to discuss your Will requirements contact us to arrange an appointment to discuss.
Visit – www.maxwellhodge.co.uk – for contact details of our branches