[2017-09-27] What Happens to Cryptocurrency When You Die?

[White sugar]

A young man died suddenly in Colorado this year, leaving his family the burden of sorting out his estate. Little did they know their loved one had been investing in Bitcoin, the digital currency that cost as little as $13 in 2013 and recently climbed as high as $5,000.
The grieving family stood to inherit a small fortune—that is, if they could only find and access the cryptocurrency.
Bitcoins are a virtual form of money protected by unbreakable cryptography. This attribute makes it a secure way to store wealth but also creates the risk that when Bitcoin owners die, their digital fortune will be out of reach forever. That’s a major problem for the relatives of tech-savvy individuals who have invested in a market currently worth about $70 billion.
Bitcoins are stored in a virtual wallet. Each wallet uses a string of random characters called a “public key,” visible to anyone, as an address for sending and receiving the cryptocurrency. A separate “private key” allows the owner access to the wallet’s contents.
If a Bitcoin owner dies without passing on the private key, his heirs may discover his wallet only to realize that they will never gain access to the wealth inside. To prevent this, the owner simply has to ensure that someone gets a copy of the private key by writing it down, storing it on a flash memory drive, or entrusting it with a commercial service that manages them.
But some of these methods come with their own perils. Suzanne Walsh, a wills and estate attorney with Murtha Cullina, says executors and heirs may fail to recognize a private Bitcoin key for what it is and end up discarding it—hence the attraction of a commercial service.
Indeed, that’s the reason why the family of the Colorado man will likely be able to recover his Bitcoins, Walsh says. The family discovered the man invested in Bitcoin upon reviewing his bank account, which revealed debits to Coinbase, a popular wallet and exchange service. With documents in hand, the family approached the San Francisco company, which confirmed the existence of a wallet and is in the process of transferring its contents. (Other exchanges also have policies to transfer virtual currency to next of kin but are reluctant to discuss the issue for fear that fraudsters will use fake death claims to steal customers’ Bitcoins.)
But what if you don’t know about the existence of a deceased person’s Bitcoins?
Henry Leibowitz, an attorney at Proskauer, says executors typically use tax filings as a way to locate assets. He likens the Bitcoin situation to a time when people died with stock certificates in shoe boxes—sometimes they would go unnoticed for decades until the corporation that issued them concluded that nobody would redeem them and turned them over to a state government’s unclaimed property division.
Finally, if the Bitcoins are not listed in a will, they are susceptible to what estate lawyers call “probate by truck”—where heirs walk off with property by claiming that “he would have wanted me to have it.” The difference is, instead of a favorite lamp or piece of jewelry, a relative might walk off with the private key to a Bitcoin wallet worth thousands or millions of dollars.

http://fortune.com/2017/09/26/cryptocurrency-bitcoin-death/

[Coin-Keeper]

Many of us here have to deal with planning for this type of event.  Trust is a major issue.  ANYONE with the private key can take off with all the BTC contained in the address.  Where online exchanges are concerned we have seen too many to count occasions where funds just disappeared.  No thanks.  As an ardent collector/hobbyist I will maintain my own wallets and be the only person to possess the keys to access the coins.  Now to plan for the day when I won't be here!

[richardsNY]

Simple, they will remain offline basically for ever. I will never ever allow any entity to have control over my private keys. Maybe this comes from the fact that I haven't got my own family yet, but I am quite strict when it comes to my wealth. It's well known how people change when they have 'easy' access to a lot funds -- initially things might be normal, but when people are in need of money, chances are high that they won't hesitate to backstab you, even if it is your own family.

[Laya Varghese]

If a bitcoin owner dies without being able to share his private key, his heirs may discover a wallet and not be able to access its holdings. Investors are cautioned to share their private keys with loved ones and trusted acquaintances by writing them down in a secure location or saving the key with a commercial service tasked with managing access codes.

[Ben-carson]

There is a crowdsale ongoing i guess called DIGIPULSE,
They are focusing on Inheritance of digital currency when one dies.

I guess it shall be interesting to see how they do that.

[Kprawn]

People should not leave bitcoins on 3rd party services. You can store small amounts on these services, if you do not have any

other options... but make sure you store the majority on cold storage like paper wallets. My family know how much bitcoins I have

and where these paper wallets are stored and how to "cash out" these coins. I will keep "private keys" away from lawyers,

because I do not trust them.  

[SvenBomvolen]

This guy should be wrote all his logins and passwords somewhere, well, mostly everybody do so, cause of human's memory is not so perfect to remind such information. This days I also showed to my wife how to use my wallet, just for "if something will happen to me". Bitcoin is not a toy and fun anymore it is a source of really big money, so it's not a time to make fun of it's storage.

[okae]

I will keep "private keys" away from lawyers,

because I do not trust them.  

Haha at least someone who has brain and use it: P

Why do you go to lawyers or something like that when you have family or friends who can get it if things go bad? obviously not everybody has friends or family to whom leave the legacy but in case you can just let it go or just leave it to the first person who find your "paper": P

[BitHodler]

This days I also showed to my wife how to use my wallet, just for "if something will happen to me".

That's pretty much a very dangerous move. I hope for you that it's not a few hundred thousand dollars in crypto you have shown here how to access, because women can play it very dirty when your relationship doesn't go well.

I know that from experience, so that's definitely something you should keep in mind. No one will ever get to access my coins other than myself, that's something I am very strict about ~ no family, wife, kids, relatives, and so on.

There are certain things in life that you have to keep to yourself, and your crypto wealth is definitely that. If you want, you could just set up some sort of a fund for your kids, but that's just with a fraction of your total wealth.

[Iranus]

If someone stores their gold in a safe and then buries it in a secret location which they never tell anyone and then they die, what happens to the gold?  It isn't found until someone digs it up.  Pretty much the same thing could happen if someone has a paper wallet.

Basically, it's the person's choice what they do with the private keys and the storage of it can be handled pretty much in the same way as any other asset.  You keep it somewhere safe, and then you say in your will that you want it to go to person X when you die.

You could make some sort of scheme to make sure that no one except the intended future owner finds out where it is at any time, but I don't see why BTC necessarily has to be any different.

Bitcoins are stored in a virtual wallet.

This is where the article gets lost.  The BTC is stored in the blockchain.  If you have a software wallet on your computer, what it stores is the private keys required for the blockchain to know that you have the right to spend those coins. 

[Marry Finch]

Now really lost and will continue to lose a lot of crypto currency due to the loss of access to the secret key of the wallet. The amount of money lost in this way will be enormous. However, in fact, the crypto currency is not lost, it remains encrypted in the block-chain block-chain. I think later, when the level of technology will go a long way, and the rate of bitcoin and other crypto currencies will soar very high, instead of the current mining, the business of decrypting private keys of purses, to which access has been lost, will thrive. Therefore, someday, almost all of the lost crypto currency will return to us.

[franco123]

Many of us here have to deal with planning for this type of event.  Trust is a major issue.  ANYONE with the private key can take off with all the BTC contained in the address.  Where online exchanges are concerned we have seen too many to count occasions where funds just disappeared.  No thanks.  As an ardent collector/hobbyist I will maintain my own wallets and be the only person to possess the keys to access the coins.  Now to plan for the day when I won't be here!

Yes and to add to that, you can never tell when accidents will happen. You need to trust someone your password. Someone who you also shares your other wealth with. Your children, wife or parents. At the end of the day, you really are saving not only for yourself but for your family.

Another way is by using a safe at banks and securing a code that can be given the heirs when something bad will happen to you. In this way you can keep in the safe a piece of paper with the Bitcoin address in it together with your other personal belongings like jewelries.

[imsotiredofmoviereboots]

This is going to be hard for me. Bitcoin is still not popular here on my country but only few and I'm worried about my family's reaction about this because it could end up in a bad way which is they think of it as a scam. I have all my password written in notepad in my pc so I hope they will figure it out in case that happens to me.

[1Referee]

I have all my password written in notepad in my pc so I hope they will figure it out in case that happens to me.

That's pretty much a noobish mistake. Never leave anything of importance on your system that's vulnerable to all sorts of threats from the web. This way, potential hackers will far likely have moved your coins to their wallets by that time. Just write your passwords and such on a piece of paper, offline - everything is better than having them stored in your PC.

Other than that, people could choose to 'cut' their private keys into three or four parts, and hand each *encrypted* part to a different family member. Or for those who are already familiar with how everything works, then multisig is a great option to set up beforehand, in case you expect something to happen. Either way, I am quite sure that the far majority of the currently circulating coins will end up being 'left' in their wallets, which will only contribute to more coins being kept off the market (of course assuming that people don't have them stored online). I don't see much of a problem here.

[tweetbit]

It is a hard truth about being a bitcoiners. Without our family’s knowledge about bitcoin it is a burden we should be ready of in case deaths happened accidentally. That’s why we must be prepared to teach and to give instructions to the one we love about this Wallet thing and private key.

This a story that needs to be told to everyone in this community for it might helped us acknowledge that we are not alone and those we hold can also be a big help to our family when we’re gone.

[jekjekman]

This is going to be hard for me. Bitcoin is still not popular here on my country but only few and I'm worried about my family's reaction about this because it could end up in a bad way which is they think of it as a scam. I have all my password written in notepad in my pc so I hope they will figure it out in case that happens to me.

Do you have a big amount of Bitcoin in your holdings? and are you dying soon or have any threat in your life? it seems to me that you are endangered. This topic is a great topic since the Bitcoin's boom and to those holders that have a serious sickness and dead already as their Bitcoin will become a dead coin as they vanish.

I really believe that there is a company that will make a technology about this and create a something like last will testament in real life to be digitally enable in the future, maybe some finger print to open one's Bitcoin address will be good or a well trusted company that will secure the Bitcoins.

[nithin@123]

I will share my private key with my loved one

[ALT67890]

A sad story to read but a lesson to learn for every bitcoin holders that is human and obviously we are, that death is a destination that all of us will soon be going. So before that happens and time will be late for us to regret, everything we have must be shared at this time to our love ones. Money/bitcoin can’t buy life but can make one life a better one. So better we be the one to initiate this things before we die.

[buwaytress]

This isn't the first time it's been brought up, but I still see no trustless solution being proposed to solve this issue of inheritance and legacy. I'm now starting to think that if it's possible to somehow create a smart contract or a time lock transaction that requires the owner to always access the coins every fixed period... and if this condition is not met for say, consecutive periods, for an additional rule to trigger that would send the private keys (unencrypted) to a specified person? This assumes that if the owner is unable to access for an extended period of time, it could only mean he/she has passed on.

So far, even multisig solutions with a legal firm requires trusting someone or some party.

Not the most technical person here, but would something like that work?

[maronk]

I also thought to share a Private Key with my closest people but have not done it yet.  I just tell them how to pick it up in the future if something happens, introduce what and how the other bitcoin and crypto include token ether in myether wallet to the nearest person or people who won my trust. So basically they just access or check my computer when something happens because I have stored all the data they need later to take it