This is a very common question that has been raised by almost all bitcoin users. The very mention of death curls people. The uncertainty and the fear of what happens next fog our minds. The feeling of disillusionment is momentary, but finding the resolve to this becomes very important for securing your property.
What happens to your bitcoins after you die? This is a question with many answers. When it comes to property i.e. stored digitally it accounts for a load of things like social accounts, online banks, and of course cryptocurrencies such as bitcoin.
Since you are dealing with bitcoins you will face a different challenge upon death. As it only exists virtually and is encrypted for security, it gets difficult to pass on. The bitcoin owners are given a private key, which is the password to their digital wealth. It is unfortunate that there is no central body to track your private key so that your digital wealth can be retrieved by a potential heir.
In the events of you passing away without leaving your key to anyone, henceforth your bitcoins will become worthless. This means that your digital wealth will get lost in the algorithm causing an increase of bitcoin value. Bitcoins are designed in such a way that the algorithm that creates it limits the supply of bitcoin, hence when it is lost, the supply that remained in the circulation will boost in value due to scarcity.
There are different instances in which your digital asset can get lost. Suppose, you give away your private key without giving a proper explanation it can stay lost. This is similar to a key leading to a safe, but without any material description or identification. However, in this case, the banks once in a while clear out the safety deposit box to take back the safety box. But, nobody will come to reclaim digital space, especially when there isn’t any incentive to it.
How Can The Wealth Be Passed On Safely?
There are plenty of methods for how you can make your rightful heir aware of your digital wealth. One among those is being completely old school and giving them your private key now so that they can access it in the future. Or just leave it in a safety deposit box or equitant locations that can be later accessed by your heirs. You can make a will that will allow them to access this safety deposit box after your death. However, you could always leave it in a flash drive or just write it in a piece of paper.
But the challenges are many, you will have to think through everything, a paper can get lost and a flash drive gets affected. In these situations, you need to access deeper. If you make a significant amount of investment, there is a chance that you could choose through alternate methods for ensuring that your heir gets what is rightfully theirs. For example, the bitcoin fortress gives you some of the unique ways to secure your wealth and pass it on safely.
There is a way to use your bitcoin as a vehicle. You can set up a time-locked transition if you want. This will ensure that after a given number of years your heirs will be able to use your private key to access your digital asset. The perks of this plan are that you might not be actually dead when this happens; this will open you up to liability of theft without knowledge.
There are third party operators who offer vaults that you can choose for keeping your private key safe. This third party application offers you a physical vault where your private key will be kept securely. This originally is a joint account with your heir, where the key can be transited both rapidly and smoothly.
Being Careful is the Secret to Smooth Transfer
Make sure that you have an estate plan, be it an established trust or a simple will. Making your wishes known is a risky process. There can be someone in the list of relatives who might know about bitcoins, they can disappear with the entire wealth, without anyone knowing that they are being victims of theft. Hire an attorney who will help you through the process of distributing your online wealth effectively.