Ever thought about leaving Bitcoin in a will?
And is it even possible? Can you leave Bitcoin in a will? And how do you do it?
Let’s dig into it.
Bitcoin is a relatively new asset. Many questions remain about best practices in managing cryptocurrencies and other digital assets.
A major issue for example is:
What happens to your Bitcoin when you die?
Bitcoin has become an integral part of our society. The use cases of Bitcoin and blockchain have also increased dramatically.
Cryptocurrencies are no longer an invisible toy for geeks or a part of a social experiment. They have become a common means of payment, to play online games for example or to invest in gold and precious metals.
More and more institutions are accepting Bitcoin as a regular way to pay for services or for goods. Even if shops or merchants aren’t accepting Bitcoin as a payment, there are plenty of debit cards available to pay with crypto without the merchant noticing. such as the debit card of Binance, Crypto.com or FTX.
So, how can you safely manage your digital assets today and in the future? How can you leave your precious Bitcoin in a will?
Below, we will explain how to make a proper estate plan. It’ll show you how to safely leave Bitcoin in a will so your loved ones can access your funds if you happen to pass away. (Hint: it’s much safer and easier with Inheriti® than anything else).
Too often Bitcoins get lost forever
There are many stories about how someone lost a massive amount of money by losing access to their Bitcoin.
Many early adopters bought Bitcoin out of curiosity or to experiment. Over time they maybe lost interest or even worse: their personal computer crashed or got hacked.
As Bitcoin rose in value, the owners naturally regretted it. Some of them even went as far as to search for their old hard drive at recycling parks.
So it’s obvious. Without a proper backup (of your private keys), you can easily lose access to your Bitcoin if something happens to your computer.
What happens to your Bitcoin wallet when you die?
Well, actually not that much. Your Bitcoin wallet is and will always be stored on the blockchain / public ledger.
It’s the access to your Bitcoin wallet (= your private key) that should be protected at all costs.
Having your hard drive crash or losing access to your computer shouldn’t be that big of an issue if you manage to have a safe backup of your private keys.
But, what if your computer is fine and something happens to you? How can you make sure that your private key doesn’t end up in the wrong hands?
The answer is that there’s no single right answer. It all depends on the precautions you took yourself.
There are both old-fashioned and decentralized solutions. Albeit one safer than the other.
Make your Bitcoin wallet inheritable
[Bad] The old-fashioned way to leave Bitcoin in a will
Let’s start with saying that this not the way you should leave Bitcoin in your will nowadays. This is the most centralized and vulnerable way.
You probably already know this, but it is important to realize that Bitcoin is built on a blockchain. That’s a decentralized and public ledger. Every Bitcoin holder is part of this blockchain. Also, in the world of blockchain, there are no intermediaries such as brokers, bankers or notaries.
Of course, you can still appeal to these classic intermediaries and leave access to your Bitcoin directly in your will.
For example, it is possible to create a document on which you write down the private key of your Bitcoin wallet. You can then have this included in your will.
You can also choose to keep this document in a safe. Access to the safe is then under the control of the notary, who ensures that everyone included in the will is present at the time the safe is opened.
Even without a notary you can make certain arrangements. For example, you can hire a lawyer or other trusted person who will have instructions for your beneficiaries on how to access your Bitcoin after you died.
But how safe is this? What if someone gets hold of your private key? Or someone takes a picture or is able to copy the document?
What if the person you’re giving the responsibility to take care of your will isn’t that trustworthy after all?
There should be better and safer ways to give you a peace of mind, right?
[Good] The decentralized way to leave Bitcoin in a will
None of the centralized solutions -with middlemen- above are ideal and run somewhat counter to the philosophy of cryptocurrencies.
After all, they are still centralized solutions. You write your private key on a piece of paper and give it to someone.
However, what happens if the wrong person gets hold of this piece of paper? Or what if it gets lost?
In other words, you are dependent on external and centralized factors. While the philosophy of cryptocurrencies is precisely to eliminate external factors and middle men.
For example, in the open public ledger of transactions on a blockchain, everyone can see what transactions are happening.
Such transparency should also be possible for inheritances, without revealing your private key in advance..
A decentralized inheritance plan
The only 100% decentralized and thus secure solution is to create an “Inheritance Plan” through Inheriti®.
Inheriti® makes it possible to transfer sensitive data after your death, without anyone else being able to access it in advance or without your consent.
Simply said: Inheriti® does this (amongst other things) by encrypting and splitting data into secret shares.
Important to note here is that you never directly leave your Bitcoin in your will or inheritance plan. Instead you leave your private key, the access to the digital wallet where your assets are located on the blockchain.
The necessary data to access your Bitcoin wallet (guidelines, private key, …) is encrypted and split into shares. Your beneficiaries then keep the data on a cold storage device such as our own SafeKey.
Beneficiaries can recover the data by putting all the encrypted shares together via Inheriti®. Inheriti® will do the rest.
If you want more information, or if you want to create your own inheritance plan and leave Bitcoin in a will, be sure to check out all features of Inheriti®.
This gives you a safe and secure solution where heirs can’t scam each other. Even without the need or involvement of an intermediary such as a notary, banker or lawyer.
Isn’t that what crypto and decentralization is all about? To remove all middlemen?
Never worry about your legacy anymore
The purpose of using Inheriti® is to make the private key of your Bitcoin wallet accessible after your death only, and not having to share it while you’re still alive.
Using Inheriti® is simple and easy. By using a wizard, you choose a number of beneficiaries or heirs as part of your inheritance plan.
Furthermore, you can also designate a few backup shares. They are used in case the primary beneficiaries are no longer alive. Or if a beneficiary loses his cold storage device.
Once you have entered all the data, Inheriti® adds the inheritance plan to the blockchain. It’s important to note that by encrypting your data and splitting it into different shares, Inheriti® never stores or even is able to read your data.
You can choose the moment when the so-called “dead man switch” becomes active. This is the trigger for releasing the encrypted data and access to your Bitcoin wallet to your heirs. If you die unexpectedly, one of the heirs can launch a trigger to activate the dead man switch, provided it is validated by the other heirs.
If someone wishes to access your wallet while you are still alive, you will receive a notification for this so you can intervene.
Setup a decentralized Inheritance Plan
The user-friendly user interface and the transparency of your inheritance plan make it that Inheriti® offers you a great and reliable standard.
It’s the only safe and 100% decentralized solution to securely backup your seed phrase. And we have multiple patents in different jurisdictions around the world.Back to wiki