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Cryptocurrency inheritance describes the process of passing on your digital assets, specifically cryptocurrency, to your beneficiaries after you die. In traditional inheritance, individuals leave their physical assets, such as real estate or cash, to their loved ones, but in the case of cryptocurrency, the process is more complex.When someone dies, their digital assets, including cryptocurrency, are transferred to their heirs or beneficiaries through their will or trust, just like any other asset. However, the process of accessing these assets can be more complicated than accessing physical assets because cryptocurrency is not held by any centralized authority, such as a bank.To ensure that the cryptocurrency is passed on to the intended heirs, individuals can include specific instructions in their estate planning documents, such as providing their private keys or recovery phrases to their beneficiaries. Alternatively, some individuals choose to use cryptocurrency custodians or trusted third-party services to manage their assets and ensure that they are passed on to their intended beneficiaries.As you’ll discover, though, each of these solutions comes with its trade-offs that must be factored in.<h3 id="life-after-dex">Life After DEX</h3>Given that its earliest adopters skewed predominantly young and male, Bitcoin OGs have some way to go before hitting old age. They are, at most, 14 years older than when they first discovered crypto. Odds are they’ve still got many more years to go before thinking about inheritance. But without being morbid, the truth is that death can occur at any time, and when it does, it’s often sudden. It pays to plan ahead.Several of Bitcoin’s most famous original users are no longer with us. Hal Finney, the recipient of the first BTC transaction, has departed, while its sender – the pseudonymous Satoshi Nakamoto – is also presumed dead. Planning your crypto inheritance while in the prime of your life isn’t being a doomer: it’s being considerate of your loved ones to ensure they’re provided for by the satoshis you’ve stacked in this life.Crypto inheritance might be a novel concept, but it’s an easy one to grasp: one day you won’t be around to spend your crypto, so there needs to be a means for a family member or friend to access your coins when you’re gone. The tricky part is determining a fool-proof system that will ensure your coins aren’t claimed until you’ve finally departed.Writing down your seed phrase and handing it to a friend for safekeeping – no matter how trusted they may be – goes against everything crypto stands for. Cryptography means you don’t have to trust: you can verify. So how do you verify that your digital assets reach their intended recipient when you’re gone?There are a number of approaches, each with their pros and cons, but crypto inheritance ultimately comes down to two words: smart contracts.<h3 id="crypto-inheritance-as-a-service">Crypto Inheritance as a Service</h3>In recent years, several companies have emerged proffering crypto inheritance products. They invariably work around the same core concept: place your assets into a smart wallet. In the event of your demise, your estate can produce a certificate of death that will, once ratified, trigger a smart contract to transfer assets from the decedent’s wallet to the descendant’s.Crypto inheritance solutions of this nature include <a href="https://serenityshield.io/" rel="noopener noreferrer nofollow">Serenity Shield</a>, which promises to “protect your investments so they will carry over to the recipient of your choice and not become permanently lost due to untimely demise or death.” There’s also <a href="https://inheriti.com/" rel="noopener noreferrer nofollow">Inheriti</a>, developed by Safe Haven, which can transfer tokens including NFTs. It offers a number of products including one designed to bequeath assets to family members and close friends. <a href="https://keys.casa/" rel="noopener noreferrer nofollow">Casa</a> also provides crypto inheritance, but is designed for HNW individuals; its premium service costs around $5k per year.Thankfully, there’s no obligation to spend a single cent on inheritance services if you don’t want to. But developing a proprietary solution that will see your crypto assigned to its rightful inheritor calls for some ingenuity.<h3 id="bespoke-inheritance-solutions">Bespoke Inheritance Solutions</h3>Entrusting your private key to any one individual is unwise. But what about entrusting duplicate portions of the key to multiple individuals? In theory, this ought to provide redundancy in the event of one entity losing their key share. In practice, it risks over-complicating an already complex system, and there remains the chance, no matter how slight, of individuals colluding to steal the funds prematurely.A better implementation of this scheme is to utilize a 3-of-5 multisig. This means that only three of the five entities trusted to care for your private keys are required to sign a transaction. You could also layer a system that ensures these entities are only made aware of one another’s existence after your death.Once again, though, you can see how a concept that’s relatively simple to grasp can quickly become layered with complexity. And we’ve not even discussed the fact that your wealth is likely to be on more than one network. Smart contract-based solutions may be well and fine on Ethereum, but what about your Bitcoin, whose parent network lacks this capability?When it comes to the matter of crypto inheritance, this much can be said for certain: don’t keep putting it off. It’s never too early to start planning what will happen to your digital estate when you pass on. Attending to it now, and periodically reviewing your inheritance arrangements, will take care of your loved ones when the time comes, freeing you to focus on living this life to the fullest.

Planning Ahead: What Happens to Your Crypto When You Die?

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