Unless you’ve been living under a rock, you’ll have heard about cryptocurrency, like Bitcoin. There are over 1,600 different cryptocurrencies and there’s no doubt it’s here to stay.
If you dabble in cryptoassets yourself, or you’re a serial investor, it’s important you keep up to date with how to incorporate these assets into your Will. Whilst the UK, legal stance on cryptocurrency is vague, it is certainly viewed as a form of property - the be owned, gifted, or inherited.
Firstly, you need to make a list of the digital cash assets you hold in your Will. Digital assets are not like a set of books or a piece of jewellery - unless someone knows they exist, they won’t be located.
However, whilst this information provides awareness that the asset exists – cryptocurrency is stored in digital wallets. Right now, these digital wallets only exist on hardware (and back-ups) - such as a laptops or smartphones. If your beneficiary is not left this hardware, the asset is inaccessible. Remember the Bitcoin trader that lost £300million when his mum threw away his ‘broken’ laptop? Yep, exactly.
So, your beneficiary KNOWS the wallet exists, has been gifted the asset to access it but they also need your security/log in details. You’re going to have to leave these somewhere and keep these up to date.
You must NOT leave these security details in your Will. Once your Will goes through probate (after your death) it becomes public. Leaving your security details in this document is a dream for dodgy scammers and hackers.
The solution? You can leave your information in a Memorandum - a separate document held with (but not within) your Will. This will be stored with your Will (or somewhere else, if you’d like it stored separately), and provided to the right beneficiary on your death. That’s why it’s a great idea to have your Will and Memorandums securely stored if you can. Your Memorandum is not a legal document and can easily be updated as needed.
Don’t assume your beneficiary is as tech savvy as you. The instructions you leave should really be a dummy’s guide to access your assets.
Taking these steps will ensure that your assets can be access after your death - but it isn’t ideal if your assets are sizeable.
Some serious cryptocurrency investors consider putting their investments into a professional trust.
Although cryptocurrency trusts are less mainstream right now, due to their volatility, they do exist. Putting these assets in trust, with someone who knows what they are doing, means that the investment can continue to be monitored, managed, and accessed by someone that has the skills to do so.
It also removes your asset from the probate process - meaning it doesn’t form part of the estate for your Will beneficiaries to manage after your death.
If you are considering a trust, it’s important to get specialist advice.
However, you choose to protect your cryptocurrency after your death, it’s important to create a plan as soon as possible. Whilst cryptocurrency was originally termed a ‘fad’, it is now believed that 1.9million adults in the UK own this type of asset, or similar.