Bitcoin’s price has soared to around $40,000 today and it would not be a wonder if the rise in its worth continues. On 17 December 2017, Bitcoin shocked the world by reaching $20,000 in worth. Those who were then unaware of its existence began to investigate this virtual currency. As a result, Cryptocurrency’s popularity grew, and there are now about 10,000 Cryptocurrencies in use throughout the world.
For many people, Bitcoin is the currency of the future, yet it is difficult to administer. Bitcoin is a digital currency that is not supported by state authorities. Bitcoin’s value varies rapidly, often within minutes.
Transactions are recorded on a Blockchain using a digital wallet address that can be anonymously used, making this digital money incredibly difficult to monitor. It’s unfortunate that so many people are still unaware of the need for long-term planning for this monetary asset.
Although sudden incapacitation and death are unavoidable, planning ahead for your Bitcoin can aid you and your family financially and allow quick access to your Bitcoin Wallets and Exchange accounts. Let’s have a look at the options for Bitcoin planning.
Make A Record Of Sensitive Details
Write down the data of your Bitcoin accounts on paper, which you can then put somewhere safe where your family can access them. The Cryptocurrency Industry employs a variety of transaction tools; let’s have a look at some of these tools:
- A Centralised Exchange System is comparable to a banking system in which customers deposit their funds with a third party, in this case, an Exchange, which controls the transactions and the safety of the funds. The login details allow users to access their accounts in these Exchanges. If you choose this technique, you must write down the Exchange platforms where you have accounts, as well as their login data, on paper and store it somewhere secure, such as a bank locker(for large holdings). The same mechanism can be used to maintain the details of a Custodial Wallet, in which the Exchange holds the private keys.
- Decentralized Exchanges allow two parties to transact directly without the need for an intermediary. This means that the owner of a Cryptocurrency account has complete authority over it, and a Non-Custodial Wallet enters the picture, with the holder of the Crypto account carrying the private keys. The simplest approach for your family to gain access to the details of your Non-Custodial Wallets is to write down the names of every wallet you use, as well as their recovery phrase(a human-readable representation of private keys), and store them safely. Then create another list with your Wallets and the different sorts of Cryptocurrencies they contain.
Make a Trust or a Will
You can always make a Will, mentioning your Bitcoin and other assets, and determining how all of your assets will be dispersed among family members. A Bitcoin Trust can help you avoid Probate while also keeping the specifics of your accounts and wallets confidential.
Majority of the time, a person’s Digital Assets are hidden from the public eye and online accounts of a deceased individual can never be accessed if login details are unknown. Also, it is a major deal to know about every account the deceased person had.
Planning your Digital Estate is the most effective approach to provide financial and emotional support to your family when you pass away.