Estate planners – let’s work together!

1. Do nothing – the worst possible approach.

The client’s assets will disappear into the ether upon their passing, unless they have previously shared the critical information required to access their assets with their beneficiaries.

Moreover, family members may not even know that their loved one owned cryptocurrency, how it was stored, and where it was stored. A traumatic treasure hunt scenario is likely to play out, without a happy result.

Even in the scenario that a family member can identify that their loved one owned cryptocurrency and likely stored it with a cryptocurrency custodian, unless the family members are (a) aware of the exchange where the client held cryptocurrency, and (b) have clearly been named as beneficiaries in the individual’s will – then the assets will remain locked and inaccessible forever.

2. Client can share their wallet details and private key with a trusted beneficiary.

Better than doing nothing, but still a number of flaws and a high risk that beneficiaries may not be able to retrieve the assets.

Even where a client has shared their private key credentials with a loved one, it is still possible that they may not be able to access the assets. There may be additional steps to take to access the wallet, such as requiring access to a specific device or devices, 2-factor authentication requirements which may also require a specific device – which in turn may also require a password or code. Unless that information has been shared, and the individual has access to the devices and clearly understands what needs to be done and what steps need to occur, the assets could remain locked.

In addition to the aforementioned issues, for individuals not familiar with cryptocurrency, there is an extremely steep learning curve, and a very high risk that a mistake will be made in retrieving the assets, even where they can access the wallet. If a clear roadmap and guide to retrieving the assets hasn’t been shared, the risk of error is extremely high.

Additionally, there is another risk that bad actors could steal the assets where the individual is not familiar with the security measures that should be taken when accessing wallets.

3. Client can consider a dead man’s switch solution, where they have found one they deem reliable.

A dead man’s switch is another name for a semi-automated solution, whereby the individual needs to confirm they are still alive with a software application at regular intervals. Where their confirmation does not occur, the application assumes proof of death and executes a smart contract, transferring their assets to the desired wallet.

Sounds good in theory, but not without flaws in practice. There could be many legitimate reasons that an individual who is still alive may not be able to respond to the application. Additionally, will their beneficiaries sufficiently understand what has occurred once the transfer has been executed. Refer to 1 above regarding the steep learning curve associated with cryptocurrency.

Moreover, there are an extremely limited number of solutions that exist. Those that do exist may only function for a specific cryptocurrency, and they have not yet passed the test of time. Clients should proceed with this solution approach with extreme caution and should consider alternatives.

4. Client can prepare a beneficiary access guide which will clearly detail all required information to access the assets [Recommended]

This is Willsentry’s recommended approach. We have untangled the complexities of cryptocurrency beneficiary guide creation, so you and your clients don’t need to.

Blockchain and cryptocurrency are complex subject matters, even for those individuals that own cryptocurrency or are familiar with it. Inheritance planning for cryptocurrency is even more complex.

Clients can store their cryptocurrency via a plethora of manners and combinations. Many lawyers may not have the required understanding of cryptocurrency and the associated security precautions that should be considered when preparing a beneficiary access guide. Moreover, intended beneficiaries may not have any understanding of cryptocurrency whatsoever, placing the secure transfer of inheritance at risk.

Studies have also demonstrated that a high percentage of cryptocurrency owners are reluctant to engage with lawyers/attorneys to prepare their beneficiary access plan, due to the intrinsic and critical requirement to ensure private key credentials remain private at all costs.

We can help! We’ve untangled the complexity of cryptocurrency inheritance planning, so you don’t have to! We can partner with you to help your client create their beneficiary access plan, which is the most critical artifact that must be prepared for cryptocurrency estate planning to be possible. Without a beneficiary access plan, your clients assets will remain inaccessible, forever.

Once the clients beneficiary access guide is created, we recommend the client works with you, their lawyer, to incorporate a provision in their will, referencing the beneficiary access guide.

We’d love to work together to deliver a great customer experience for your customer. Contact us to find out more.

Each individual client will have their own wishes regarding how they desire their estate to be handled, and that should be recorded within a client’s will, as you would any other asset. However, it will also be critical to reference the client’s beneficiary access plan, it’s location, and any required associated devices, in order that the beneficiaries will be able to access their inheritance.

Once we have facilitated a beneficiary access plan for your client, we will also provide them with recommended copy to incorporate within their will.

Willsentry offers a B2C offering, whereby clients can engage us directly to assist in creation of their beneficiary access plan. This is a fixed price of $59.99. However, we also partner with lawyers, attorneys, and estate planning businesses of all sizes, offering bespoke rates for referred clients, and we can facilitate an agreement whereby you may bill the client directly. Please contact us to discuss further.

In order to ensure that their assets can be retrieved by their beneficiaries, individuals must share:

• Details of their means of storage – this can range from relatively simple, e.g. with a custodian online web wallet such as via Coinbase, Coinspot, or Bitstamp, to many more complicated means of storage like a hardware wallet with additional credential requirements, or a web/mobile wallet with 2-factor authentication requirements, a desktop wallet, a paper wallet, or a multisignature wallet, where multiple parties are required for funds to be released.
• The location of the asset.
• Specifics of how to access the assets – again, this could range from relatively simple, to more complicated access requirements and combinations of credentials/devices required to access the assets. Private key credentials.
• Wallet backup details and location.