In this time of the new digital gold rush it is easy for the average person to forget about some of the basics of investing. When you open an investment account like an IRA or 401k, you will nearly always see on the account opening forms a place to state your beneficiary information. When you pass away, those "traditional" investment accounts with beneficiary information have a structured process for passing onto your loved ones and even accounts like perhaps an after-tax brokerage account or even bank accounts have a structured way to go through the court system to ensure they are handled in an appropriate fashion to be distributed to your loved ones.
However, in crypto land as of today, none of that exists, even if you put a detailed explanation in your will, signed sealed and delivered by your family attorney, it doesn't matter one single cent. The reasons for this are too numerous to go into but in the end, there is a simple solution that takes care of this.
- Create a will / estate plan
- Show your loved one (spouse for example) how to access ALL of your crypto currency exchanges, wallets, etc...
- Have your loved one write down how to access ALL of those.
- You write down very detailed instructions on how to access ALL of those AND (can't stress this enough) keep it updated on a continuous basis
- Periodically review with your loved one(s) how to access ALL of your crypto accounts.
If you are anything like me, having multiple wallets (still waiting for 1 wallet to rule them all), with some on your phone, some online, some on the desktop(s), AND having multiple exchanges, AND having 2 Factor Authentication, and I haven't even touched on future airdrops you may be expecting and the ICO world (yeah explain all that to your 65 year old mother) you can see how complex this can be for loved ones to figure out when they are already having to cope with your loss.
Do your loved ones a huge favor and spend an hour or two a month reviewing your accounts, how to liquidate (lord knows I don't want my loved ones trying to trade in crypto land) and get funds into the trusty local bank account.