Most seek advice in estate planning after major events like marriage, childbirth and the loss of a loved one. According to Pamela Morgan, CEO of ThirdKey Solutions LLC, the number of clients seeking estate planning services has skyrocketed, following the still rising price of Bitcoin.
But digital currencies do not necessarily have to represent most of your wealth. to benefit from estate planning. Since a small property originally can be worth a lot more when prices go up, "every digital currency holder should worry about it," Morgan said in an interview.
Do not use the switch of the dead
The change of a dead man, in which cryptocurrencies are automatically transferred to the account of the deceased. heir to his death, has long been a popular solution for inheritance issues involving digital currency. However, Morgan says that in real life, this strategy does not work as well as one could imagine.
According to Morgan:
"(automated transfer) requires all heirs to be able to manage his private key.You can not generate their private keys and give them that. It is not a good security practice, but more importantly, they will have to hold these keys, for an indefinite period of time. "
Morgan points out that cryptocurrency neophytes often lose their keys. Not only that, but whenever a person bought, sold or moved his property, she had to continually update the keys of her heir.
"And you" re talking about "Oh hi grandma, here are three new keys", that does not work in the world real. "
If everyone involved in the transfer is well versed in cryptocurrency, according to Morgan, most people who inherit property will not be able to handle it.
Apart from the practice, since activating a switch of a dead man requires that the owner does not access the network, "writes Morgan in his blog
Notwithstanding human factors, intelligent contract technology that allows the automatic transfer of funds today must be tested more thoroughly "Many people look at the Ethereum platform, probably because it is the oldest platform, at the mature age of three years. This is a child. We have not sufficiently tested the technology on the scale and long enough so that I can trust the money of my clients, or so that I can say 'you know what, I am going to put my money in this smart contract. "
The Ethereum Blockchain was split in two after the hacking of "The DAO", a decentralized company built on the Ethereum Blockchain.
Morgan said that reliable technology should not be just one of the many blockchains, but a widely accepted protocol.
"In reality, it usually takes at least two years to see the protocol upgrade, before it is available at the consumer level. industry, we were very impatient. "
Bitcoin, the oldest cryptocurrency based on Blockchain, was created in 2009. It only began to be welcomed by the media in 2017.
Keep Your Keys
What about the old-fashioned way in which customers put their assets in the trust of a lawyer? Morgan's advice is clear and simple: whatever you do, do not give away your private keys.
Crypto-currencies eschew traditional assets in the fact that lost funds can not be recovered. When a third party has access to private keys, he can spend the currency. Since cryptocurrency transactions are not reversible, funds, unlike funds from a bank, are impossible to recover.
Giving private keys to a lawyer means that private keys could end up in a legal document. Morgan warned.
And writing private keys in the will can result in a loss of funds when the will becomes public, as happens in many jurisdictions, Morgan said.
"Many people postpone (crypto-currency planning) because they think they should engage a lawyer.They think they have to trust a third party.And this is wrong. "
A good planning
The key to l & # 3939; Cryptocurrency legacy is to ensure two things, says Morgan, make sure your heir knows what you have by giving them an inventory update of your digital resources, and make sure your heir knows how to access it .
The process, detailed in Morgan's blog, is to do a self-check for security, and teach your loved one how to access your digital.
Morgan also wrote a Letter to the Beloved to help the process.