Have you ever thought that what will happen to all your cryptos and NFTs once you will be no more? Investing in Crypto is a trend but thinking about the future of this investment is equally important. Death isn’t a good topic to talk about, but it’s important to plan for every eventuality, especially inheritance planning, also known as estate planning. To make sure that all of your assets, both physical and financial systems, will be passed on to your loved ones after you die. Here’s what happens to crypto when you die.
What Will Happen With Your Digital Assets After Your Death?
When someone dies, they usually write a will and put their money, gold, or a house somewhere. Then, someone usually gets the money, the house, or the gold. It’s not clear what happens to crypto-assets once a person dies, though. The answer isn’t as simple as that.
It’s riskier to lose or misplace assets with cryptocurrencies than with traditional assets, like stocks and bonds. When you die, your crypto and non-fungible-tokens (NFTs) aren’t going to go away with you. We’ll show you how to set up your digital wallets so your loved ones can get to them safely when they need to.
What happens to crypto after you die – No Keys, No Crypto Assets
About 4 million Bitcoins have been out of circulation for good because people died and didn’t give up their private keys. A private key is like a password, but it doesn’t have to be written down. You get to your crypto wallet with a string of letters and numbers. There, your crypto coins and NFTs are kept safe.
People have died and their family members or close friends haven’t been able to get their crypto assets from their wallets. This means that billions of dollars worth of cryptocurrencies will never be found again.
As of 2018, Matthew Mellon, who had $1 billion worth of XRP, died. It was gone for good. QuadrigaCX CEO Gerald cotton died in 2019. He was the only person who could get to $190 million worth of Aetherium that he had when he died in 2019.
So in both of these cases, only people who died could get their hands on the cryptocurrency. With them, they lost all of their money.
This means that your crypto wallets are built on blockchain technology, which stores digital assets in a way that makes it impossible for someone to get their hands on your private keys.
If you don’t have the private keys, you can’t claim ownership of any crypto assets you buy or sell. If you don’t have private keys, you won’t be able to get court orders or any other kind of legal paper.
The planning of the Crypto Estate
Before we talk about how to protect your crypto assets, it’s important to think about who will be able to see your digital assets.
It’s not just about trust when you give someone access to your crypto wallet. You also need to choose someone who is technologically savvy and knows how to get a crypto wallet back.
Sending crypto to the wrong address, getting locked out of devices, or withdrawing assets with the wrong token standards. Another thing to think about is how much information you should give out. There are two options: can you trust only one person with your crypto assets, or can you spread the information out among a group of other people?
As long as you have the right people, it is a good idea to spread your bets out across a group. An individual would not be able to get your money or steal your money, but listing multiple people makes the whole system fall apart if one person loses any of the information.
Steps to follow
Thinking about what happens to crypto when you die? The first thing to do before making a will is to move all of your crypto assets to a hardware wallet, which is where they will be safe. The easiest way to set up and use an online wallet is to do it online, but they are also the most vulnerable to cyberattacks. One way to keep your cryptocurrency safe is to keep it in a hardware wallet instead of an online wallet.
Putting your private keys in a hardware wallet, is one of the best ways to protect your cryptocurrency, is one of the best ways to do. As a bonus, they can’t be infected by computer viruses, which makes it almost impossible for hackers to steal your coins.
Take steps to make it easier for your loved ones to find and get into your crypto wallet, so they can use it. Write a step-by-step guide that shows you how to get your cryptocurrency. It’s important to keep the information you’ve given somewhere safe on a password-encrypted hard drive so that it doesn’t fall into the wrong hands.
Instruction To Get Back Crypto Account:
If your recipient doesn’t know anything about cryptocurrency, write the instructions as if they don’t know what it is. How to do this is shown here.
- Your cryptocurrency’s name is on the crypto exchange where it is stored. (WazirX, Binance, and so on)
- Steps to log into your account: a user name and a password
- For physical wallets, the private keys to your wallet.
- To get back into your account, you need a 12- or 24-word secret seed phrase.
- It’s possible that you have two-factor authentication (2FA) turned on. If you can either give the location and password of the device where the Authenticator app is stored.
- The location and password of your current mobile device should be included if your accounts are set up to receive OTP’s on mobile phones.
- Make a password or write it down on your hard drive so that you can get in.
After you have finished the list, you should go over these instructions in detail to make sure that you have included all the information your loved ones need to get your virtual currency.
What happens to crypto when you die – Have a will drawn up
Then, call a lawyer and write a will that says who will get your crypto assets after you die, so they can get them when you die.
It goes into the “residue” of your will if you don’t put crypto in there. People write down what they own that isn’t in their will. These things include your clothes, subscriptions, and any other things that you own. Finally, in your will, make sure to say where to find your cryptocurrency.
The Bottom Line
That’s what happens to crypto investors when they die. We hope you understand how to prepare your investment for the future so your loved ones can access it securely. Bequeathing cryptocurrency to your loved ones takes a lot more planning and work than giving them traditional assets. As soon as possible, before it’s too late.