What happens to bitcoin after a bitcoin holder expires?
Admiration for bitcoin is next level and increasing even more. The market cap of this digital currency is sky high because many investors want to get involved in bitcoin. There is no government regulation in the crypto world. But even though bitcoin is a new investment for investors, they need to take it as a long-term investment. Do you ever wonder where your money goes when you buy Bitcoin? If so, this is where the money goes when you accept Bitcoin.
That includes getting ready for what will happen to your digital investment when you die. All bitcoin transfers happen independently of this technology. Since they are decentralized, you must mention them in your estate plan. You must choose a person you trust to carry out this plan. Or it may be impossible for your loved ones to access bitcoin when you are gone.
Why is it important to include bitcoin in an estate plan?
Just like your property and other valuable assets, bitcoin is also a valuable resource. This means that this asset must go through probate before it is legally transferred to your loved ones after you pass away. By having the housing plan, the whole procedure will be easier for each person involved. It is also important to consider that even a reputable bitcoin exchange does not support the process of adding beneficiaries to your bitcoins, such as payment to death account.
Also, bitcoin is not centralized; it has some high-level security issues that are not issued by government authorities. Although bitcoin is digital, you must treat this digital currency as a tangible asset of immense value, like gold. Any person who gets access to your bitcoin can practice it for any purpose. So if you die without giving anyone access to your bitcoin keys, they will be lost forever. Therefore, you need to plan for your bitcoin assets and have clear instructions regarding the people you want to transfer them to.
Best ways to transfer your bitcoin holdings!
Name a beneficiary in the estate plan!
A beneficiary is a person from whom you want to inherit your assets after your death. It is important to ensure that you list all of your bitcoin assets in this estate plan. It is also important to name a separate executor to protect and preserve your bitcoins. To make this process more manageable, consider nominating an executor who knows about bitcoin. Since the laws are constantly changing, you should revisit your estate plan in time to ensure that your executor has all the necessary equipment to access your bitcoin investment and facilitate its transfer to the chosen beneficiary without delay and unnecessary costs.
Document where your bitcoins are stored!
It is important to mention all the details about where you store your bitcoin. Your executor and beneficiary can only retrieve your bitcoin depending on how they can access it. If you keep bitcoin in a custodial account at any exchange, the executor can contact them directly to facilitate the bitcoin transfer. To start this procedure, they will require your death certificate, probate documents and a signed letter to the executor stating what they have to do with the bitcoin in the said account.
But if you keep bitcoin in a cold box, access to your coins after death will depend on how you document your assets. Therefore, it is important to document the location of your bitcoin wallet. Also, it would help if you also mention your keys for each wallet. This information is also important to mention if there is any other PIN or seed recovery phrase. All these things are very necessary to access your bitcoin wallet. It is your choice where you store this important information. But you might consider keeping it in the safe. Don’t forget to include the information about this safety deposit box in your estate plan. You can also consider entrusting any lawyer or family member for this purpose.
The world of bitcoin is evolving rapidly, so it is important to have an estate plan to protect your bitcoin funds after you pass away. Bitcoin is decentralized, so the responsibility is yours to keep them mentioned in your estate plan. You should give clear instructions to your executor and beneficiaries even when you die.
