Bitcoin is a new virtual currency that was created in 2009. Transactions are made with no middle men – meaning, no banks! Much of the hype is about getting rich by trading it.
Some people just buy bitcoins as an investment, hoping that they’ll go up in value.
Bitcoins are essentially a digital payment network stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money.
Bitcoins are protected by powerful cryptography, a secure way to store your wealth but it ultimately creates the risk that when you die, your heirs will not have access thereto.
A “private key” allows the owner access to the digital wallet’s contents. Unless your heirs have your private key, they will be unable to gain access thereto when you die.
How To Ensure Your Bitcoins Are Transferred to your Heirs
To ensure that your Bitcoins can be transferred to your heirs upon your death, it is advisable to entrust a copy of your private key with your financial advisor or attorney who can ensure that your heirs receive it.
Although the Bitcoins do not form part of the physical assets of your Estate, it would be advisable to bequeath your Bitcoins in your Last Will and Testament and to identify the person who has a copy of your private key.
This will ensure that there is no uncertainty whom you wanted to gain access to your wallet after your death.
We at Schwenn Incorporated Attorneys and Conveyancers have an Estates Department that would be willing to discuss this issue with you. Give us a call to set up a meeting to draw up your Last Will and Testament and to discuss your Bitcoin portfolio in the process.