2016-03-14 Mon

Can your family access your bitcoin, altcoins and asset-tokens after your death? That’s an answer everyone wants to seek. The fact is that without passwords, passphrases, and key locations , your crypto-assets will be inaccessible and your family will never be able to inherit them. Since virtual currency has become more and more popular and has been used for millions of venture capital funding, losing these assets can be a costly affair.

With assets like bitcoin, it’s a matter of technology, not will. Without access to private keys, no one can claim the bitcoins that they have inherited. You can give access to your successors, but that would give them equal control, with the power to take the assets at anytime or your accounts could get hacked. Using a combination of multi-signature addresses, hardware wallets, open source software wallets, and policy controls, systems are being designed which can provide complete control to the individual but divided control in case of emergencies - like death, coma, or brain injury.

Designing Your Plan:

Step 1: Figure out what you have and what you need to protect. Make a list of your total current holdings, where they’re held (wallets, exchanges, etc) and the corresponding current value.

Step 2: Separate your assets into tiers. Decide how much you want easy access to, and how much to keep in long-term storage.

Step 3: For each of the tiers, develop a plan with the technology, people, and process that ensures a careful balance between security, ease of use, resilience (backup), and survivability (estate planning). Don’t make things too complex and find a good balance between security and ease of use.

Step 4: Decide who will inherit which tier and exactly how that will happen. Unless you make a plan that considers e state laws, your plan may end up being thwarted by the courts. Using technology alone, even with advanced transactions like CLTV, may not be enough to ensure your wishes are respected.

Consider questions like, do your heirs understand this technology? Can they create and provide their own addresses for transfer? Or will the assets be liquidated to fiat currency that will be distributed to your heirs? Regardless, who will help your heirs through the process?

Step 5: Test your plan. Test each tier using a very small-value transaction to initialize and simulate a recovery-from-backup. Ensure you can actually execute your plan as designed. Test from the perspective of your heirs too.

Step 6: Implement your plan. Move the remaining assets into your selected tiers. Keep testing your plan once in 6 months at least.

Step 7: Store backups. Store your backups in geographically-diverse, secure, access-controlled locations. Don’t store all of your backups in the same place or with the same people. Never store backups from the same multi-signature address in the same place. Store a copy of your estate or succession plan too.

Also delaying for new features, lack of time or pure disinterest means delaying forever.

Make sure your assets don’t die with you, start planning right now!