Most people have never thought about what will happen to their bitcoin, ether, and other crypto-assets if something bad happens to them.
Even if you do understand the concept of passing your crypto-assets to your loved ones, actually doing the work to make it happen is often a daunting prospect. It’s one of those tasks, without a hard deadline, that gets pushed to the end of your to-do list, repeatedly. Most people don’t know where to start and there are very few resources available to help guide you through the process. But it doesn’t have to be that way.
You might not know this but Third Key Solutions helps people build crypto-focused estate plans both from the tech side (which wallets should I use?, where and how should I back up keys?, etc.) and the legal side (how can I make sure my step-child or domestic partner can inherit these assets?). Complex assets and family situations usually require help from experts, but no matter what your situation is, you can start planning today. Below is a template that some of our clients customize to let their loved ones know how to access these assets. You can use it, too. It’s a good way to get you thinking about the practical aspects of how your bitcoin, ether, classic, z-cash, monero, and other cryptocurrencies could pass to your heirs.
Using the Template
To use the template search for {} and fill in the blanks. It really is a template and will require significant customization to be useful by your heirs; be sure to delete sentences that don’t apply to your situation and make other changes as necessary. It’s most important to explain the kinds of assets, key locations, and access controls you’re using for security. Access controls are things like PINs, passphrases, multisignature or timelock requirements.
Avoid stating values in terms of local currency (e.g. US dollars), as the value will change by the time anyone reads the letter and that could cause confusion and conflict among heirs because they will expect the valuation in the letter to be correct.
Also avoid stating exact numbers of assets (e.g. 12.08975632 bitcoin) as these numbers will likely change too. The exception, of course, is long-term storage, as these amounts shouldn’t change too often and you can develop a habit that every time you modify your long-term storage you also edit your letter.
Letter Logistics
Ideally, you’ll print your letter on old-fashioned paper and store it with your will or trust, in a safe. You should only store the editable version of this document on digital storage that is secure, such as an external encrypted drive. Keeping this document online and unencrypted may provide a hacker, computer-repair tech, or anyone with access to your computer systems with a roadmap to find and steal your assets.
Steps to use the letter:
- Copy this letter into an editor
- Modify it to your needs
- Print it out (consider printing more than one copy)
- Store the paper copy in a secure location (or multiple secure locations)
- Copy the digital copy from your computer to a secure digital location, or encrypt it.
- Securely delete the unencrypted local copy from your computer (search for “secure delete” to find out how)
If you do not know how to do the above or don’t feel comfortable doing it on your own, hire an expert or simply hand write your letter on a single sheet of paper.
Source/More: Letter to Loved Ones: a template for your crypto estate planning
