Five years ago, 26-year-old Matthew Moody was killed as the result of a tragic plane crash in California. Moody, a prolific Bitcoin miner, left behind what is likely a small fortune.
“My son was actually one of the earliest people to mine it,” said his father, Michael Moody, in a Bloomberg interview detailing the family’s struggle to unveil and recover the lost funds. “He used his computer at home to mine Bitcoins when you actually could do it that way and he had a few we think.”
Moody, a retired software engineer, began seeking to recover his son’s cryptoassets three years ago. He discovered that his son had used Blockchain’s web wallet, but this information did him little good without the decryption password or the wallet’s private keys.
This, of course, is by design. One of the core philosophies behind the invention of cryptocurrency was the belief that individuals should retain complete control of their money, or, in common parlance, “Be your own bank.”
Custodial “wallets” exist, but — by necessity — they require users to entrust their funds to a third-party. To cite another cryptocurrency proverb, “Not your keys? Not your coins.”
Despite otherwise embracing this responsibility wholeheartedly, however, many cryptocurrency users neglect to consider how to pass their cryptoassets to their heirs. This is not entirely surprising. The largest share of cryptocurrency investors are millennials, and research indicates that fewer than 25 percent of millennials have wills.
However, Pamela Morgan, an attorney who specializes in cryptocurrency, has written extensively about the need for investors to take steps to ensure that their heirs have access to their cryptoassets when they pass away.
“[W]ith self-controlled assets, ignoring our own mortality comes at a cost to our descendants, dependents, community groups, and political causes because our keys, and therefore access to the assets, could die with us,” she wrote in a blog post last year. “Humans die. Cryptocurrencies don’t.”
Morgan, who is currently authoring a complete estate-planning guide for cryptocurrency investors, has published a handy “Letter to Loved Ones” template that investors can use to help heirs, including those without experience using cryptocurrency, access these assets and, if desired, liquidate them.
Though not a substitute for a will or testament, this drafting one of these letters is an important first step toward ensuring that your heirs can access your investments after you pass away.
Featured image from Shutterstock.