What is cryptocurrency?
Cryptocurrency was developed after the 2008 financial crisis by Satoshi Nakamoto. This 12-year-old cryptocurrency is called Bitcoin. Over the years other cryptocurrencies began to emerge which are referred to as altcoins. Bitcoins or altcoins are not a physical object and they are not backed or regulated by governments like traditional “fiat” currency. They need to be held in a digital wallet and can be exchanged for goods and/or services in the digital arena. Cryptocurrency can be transferred directly from person to person without using a bank or third party.
How can people get cryptocurrency?
There are several ways people can get cryptocurrency which include:
- Gifting: Someone can give you cryptocurrency in a similar way they would gift you cash. Instead of receiving the physical coins or notes the money will be added directly to your digital wallet.
- Purchasing: People can buy cryptocurrency using their credit or debit card.
- Receiving payment: Someone can pay you for a goods or service using cryptocurrency.
Should owners of Cryptocurrency include them in their wills?
Research estimates that up to 3.8 million Bitcoin, worth £22.8bn has been lost as a result of the deceased not informing their beneficiaries of how to retrieve the currency.
David Janczewski, CEO of Coin Cover, a cryptocurrency Will maker, said:
“Cryptocurrency is one of those odd things which is very private for a lot of people. If you acquired yours early, you might actually have a substantial amount of money. You might be worried about your personal security.
“And nobody thinks they are going to die. Nobody plans for that eventuality. And therefore, when that happens, maybe you haven’t told your family members exactly how they should recover it.”
If you have cryptocurrency that you want to include in your will you will need to provide the following information:
- Details regarding your digital wallets
- Create a memorandum to the Will which contains passwords and PIN numbers
- Include a step-by-step-guide to explain how your beneficiaries can access the cryptocurrency
This information can be kept separate to your Will but it is important that the Will itself confirms the existence of your cryptocurrency and how to access the above information when required.
What happens if the beneficiaries don’t want cryptocurrency?
Cryptocurrency isn’t for everyone. Some people would rather have the physical cash whilst others would just want to have the currency in their traditional bank account. This can be achieved but you will need to ensure that the executor has knowledge of how to use cryptocurrency and how to exchange it for physical cash.
Our Wills & Probate Solicitors can assist you in drafting the additional information required in your Will to protect your cryptocurrency and ensure that it is not lost upon death.
Contact us today on 01282 422711 or email firstname.lastname@example.org