(This post is contributed by Eve, a Kenyan Blockchain Lawyer. Email: [email protected])
Cryptocurrency investment is an emerging trend and the passing down of these digital assets is somewhat an unexplored domain. In most cases, digital assets may be overlooked and unclaimed, especially if loved ones are not aware that the assets exist.
There are privacy laws that protect unauthorized access from these assets, and failure to let your loved ones know about them may consequently result in losing the assets forever.
Unlike traditional money (cash), cryptocurrencies have no physical form making them only applicable virtually.
To ensure privacy and security, owners are provided with private keys immediately after opening an account with an exchange or digital marketplace. Private keys are simply defined as secret numbers that act as passwords to allow access and management of digital assets by the owner.
However, the question still remains on how these assets can be inherited by the owner’s beneficiaries.
Some states like Kansas and Texas have passed the Revised Uniform Fiduciary Access to Digital Assets Act which provides that the fiduciaries of an estate can access a deceased’s digital assets and ensure that they ultimately pass to his/her loved ones.
The Act allows owners of digital assets to use online tools that allow them to designate a fiduciary to access their assets. Upon the death of the owner, a beneficiary can apply for a court order compelling the custodian of the assets for disclosure for the administration of the estate.
Kenya does not have crypto-specific laws that provide for the succession and administration of an estate. Therefore, to ensure one’s beneficiaries can access his/her digital assets, one can either list the assets in a will and have a multi-signatory wallet for the executor and beneficiaries, or enlist for the services of a company that provides digital inheritance services.
An asset owner can:
List the assets in a will
Stipulate which beneficiaries get what type of asset
Have a guide on how the loved ones can access the assets through the multi-signatory wallet
It is also critical that the owner takes into account that the beneficiaries may have a difficult time navigating the process of accessing the assets. In this case, the owner should ensure that the executor of the will has the technical skills necessary to guide the beneficiaries claim and access the assets. This ensures that the assets are safe and secure as they cannot be transferred without the authorization of every beneficiary and executor.
Several companies have come up offering crypto investors secure ways of passing down their digital assets, such as TrustVerse.
Trustverse offers digital inheritance services which are vital since most investors do not worry much about the next stages of life. It relies on smart contracts to enable the predecessor to set preconditions for the contract to be met, hence giving investors a platform for succession planning.
Bitcoin, alternative cryptocurrencies, Non-Fungible Tokens, and other digital assets have a high potential of increasing in value. Therefore, one should make a detailed plan for their loved ones to gain from these assets by relying on the aforementioned options.