Lawyer analysis, how to safely inherit Crypto Assets?

Even though Cryptocurrency has gradually become a hot trend in investment in recent years, challenges arise in inheritance due to Decentralization and Anonymity. This article discusses how to safely pass on virtual assets, ensuring that family members can inherit smoothly. The article is sourced from an article by Mann Kun Blockchain, compiled and translated by PANews. (Background: Buffett publicly announced his inheritance plan of donating '99.5% to family charity funds,' advising all parents to do one thing before they die) (Additional information: SEC Chairman Gary Gensler: '7 billion people worldwide want to trade BTC,' responding to 11 key questions about Cryptocurrency) Since the release of the first BTC software by Satoshi Nakamoto in 2009, Virtual Money has undergone significant development, withstanding market tests and transitioning from a niche speculative project to a popular investment project. Today, Virtual Money is favored for its characteristics such as Decentralization, Anonymity, and global reach, prompting more and more people to consider adding a portion of Virtual Money investments to their asset allocation. However, the advantages of Decentralization and Anonymity can turn into disadvantages when it comes to inheritance. Precautions — Wallet and Private Key When inheriting virtual assets like Cryptocurrency, early arrangements in life are crucial. In the generally anonymous and decentralized world of Virtual Money, the Wallet and its core Private Key serve as the identification of this world. In other words, by entrusting the Wallet and Private Key, inheritance can be directly completed. The Wallet is the application that manages Virtual Money, with mainstream Wallets divided into PC Wallets, browser extension trap Wallets, mobile Wallets, and hardware Wallets. PC Wallets, browser extension trap Wallets, and mobile Wallets need to clearly communicate the application type of the Wallet to the inheritor, while the hardware Wallet needs to be stored securely to ensure it can be handed over intact. The Private Key is equivalent to a combination of a username and password for accessing the Wallet. When actually used, the Private Key is converted into a mnemonic phrase, which needs to be accurately conveyed to the inheritor. If a password is involved, the method of using the password also needs to be communicated. So how should the Wallet and Private Key be passed on to the inheritor? Inheritance ultimately serves as insurance, and informing the inheritor in advance may lead to some avoidable losses and disputes. 1. Pen and paper transfer You can record information such as the type of Wallet (if it is a hardware Wallet, the location of the Wallet), mnemonic phrase, etc., on paper, and then place it in a safe deposit box, similar to the commonly used paper Wallet in the crypto world. The safe deposit box password can be placed in a will or the paper Wallet can be directly stored in a bank's safe deposit box to ensure that the inheritor can only open the safe deposit box after inheriting the assets. 2. Hardware storage You can also store necessary inheritance information on a USB drive or a portable hard drive, set up password protection, and store the hardware and password separately to ensure that the inheritor can only access the information on the hardware after inheriting the assets. 3. Dead man's switch You can also explore applications like Sarcophagus, built on Ethereum and Arweave. Specifically, you can upload necessary inheritance information in the application, which will encrypt and store it permanently on the network. At the same time, you need to set a file decryption time and designate your inheritor as the recipient. Before the decryption time arrives, you can choose to extend the file storage time or terminate the service; otherwise, the file will be automatically decrypted to the recipient. Each of the above methods has its own advantages and corresponding risks, so choose the method that suits you best to pass on your virtual assets. Aftermath — Centralized platform account If there is no time to leave behind the Wallet and Private Key before death, there is a high possibility that virtual assets cannot be inherited, as Decentralization is an inherent feature of Virtual Money. However, after many years of development, a centralized exchange has emerged in the Virtual Money world, sacrificing some degree of Decentralization and Anonymity in exchange for enhanced security and convenience. If the deceased primarily used a centralized exchange account to manage virtual assets, the inheritor only needs to know the account name to be able to claim the assets through the platform and inherit the virtual assets. The inheritance processes of each platform may vary, as well as the required documentation. This article uses Binance as an example to explain how to inherit Virtual Money in a deceased person's account. Binance has a well-established inheritance claims process. After registering their own account, the inheritor can inform customer service that they are the rightful heir and need to inherit the assets. They can then directly access the inheritance claims page through the AI customer service link. The required supporting documentation is not complex and includes the following three items: - Identification documents of the inheritor and the deceased account holder - Death certificate of the deceased account holder - Legal documents proving the right to inherit, such as a will or inheritance rights notarized documents These three items of documentation need to be notarized or certified by a lawyer and accompanied by an English translation. The most troublesome of these is the third item of documentation, as when it comes to inheritance claims, it is usually too late to leave behind a will to handle this virtual property. If there is no dispute regarding the inheritance issue, you can proceed to the notary office to obtain a notarized document of inheritance rights, which generally requires materials such as the death certificate of the deceased, proof of kinship, personal files of the deceased, property certificates, etc. If there is a dispute regarding the inheritance issue, then you will need to engage a lawyer to handle the inheritance dispute lawsuit, and the final effective judgment will serve as a legal document proving the right of inheritance. By submitting the above documentation and going through Binance's review process, the inheritor can inherit the Virtual Money in the deceased person's account. In conclusion, Virtual Money is an asset with a high threshold for ownership. You may have accumulated a considerable amount of virtual assets while avoiding risks such as market fluctuations, hacking scams, legal risks, etc., but your family may be unaware of Virtual Money. In extreme cases, it may even happen that an investor passes away, and their family, inheritors, may not even be aware that the investor still holds virtual assets. Or they may only know that the investor dabbled in Virtual Money but have no knowledge of the Wallet used or the platform involved. Alternatively, based on clues left by the investor, they may obtain Virtual Money but run into disputes during the withdrawal process. Therefore, effective communication within the family is crucial. Mann Kun Lawyer advises that in your daily life, you should hold more family meetings to explain to your family members the operation principles, value, and management of Virtual Money. Through education and communication, you are not only leaving behind a sum of virtual assets for your family but also your investment philosophy and management skills, which are crucial to ensuring the smooth inheritance of virtual assets. Related reports: What are Cold Wallets and Private Keys? Is the USB drive used by Ko Wen-je really a key piece of evidence for Cryptocurrency transactions? Michael Saylor announces that he will destroy all BTC Private Keys after his death: a contribution to everyone in the world who owns BTC The first BTC tax evasion conviction in the United States! Court orders the surrender of 124 million USD worth of BTC Private Keys and a 2-year prison sentence Lawyer analysis: How to safely inherit Cryptocurrency assets? This article was first published on BlockTempo, the most influential blockchain news media outlet in the dynamic field of blockchain.