Leaving Behind Crypto When You Are Gone?

[jerry0]

Read examples of people gone and they never gave their family or relatives their keys to their crypto.  How do most of you handle this?  Now if you have everything in your nano ledger s or trezor or even electrum for example, well you give them the 12 or 24 word seed and they have it.  Now i thought of some issues.  What if they dont know how to operate a computer?  Who do they turn to?  Are there bitcoin services where when someone is gone, their family or relatives go to that service and say this is the code or phrase for the crypto and they mention if its stored in a hardware wallet or exchange or electrum etc and have that service get their crypto for them for a price?  Like it will cost $100 or $500 for the service?  Such as they would then transfer the crypto to the family's own wallet or contact the exchange and have them set up the crypto to be sent to their family member's account?


The other issue comes then is taxes.  Most likely that person who has crypto stored most likely did not pay all or most or any of the taxes assuming they were holding for a long time.  Now if they paid all the taxes, well you could transfer the money to the family member but there is only a certain limit they can transfer a year without taxes i believe right?  This is concerning ppl in the US  Now what if that person paid taxes on some of it or none of it.  Well the family can't just take the money into their bank account since that person didn't pay any or entire taxes of it.  So how in the world would that work then?  Because when you file taxes on crypto, it needs to be written down when was the coin bought and sold and at what prices.  The family or relative wouldn't have a damn clue about it.  They also wouldn't know when they got it and say that person was a trader, they wouldn't have access to say the 500 or 1000 plus transactions that person did etc even if most were basically buying bitcoin and selling it for altcoin immediately since most altcoin you can't go from altcoin to usd or usdt etc.



Does anyone have experience or tips on this?  I think leaving crypto behind in a hardware wallet is the easiest right?  But what if some were in an exchange like bittrex or binance?  Do they contact bittrex or binance about it and then send in the paperwork?  Of course they would need that person's binance or bittrex email address and that person most likely had 2FA.  How does that work then?  I assume coinbase probably would be the easiest to work with?  Now let say that person also had their own wallets in their computer like for example bluecoin or greencoin where its not compatible with hardware wallet and they have some of these wallets on their computer.  Now if their family has the seed or phrase for this, they can claim it but if they have no clue how to do this on computer, are there services that allow this?  So imagine someone has crypto in their trezor or ledger and some in computer like bluecoin and greencoin and some in binance and coinbase.  Are there services that would help them recover all these for a fee?  Thus they would help that family email binance of coinbase assuming that family doesn't even know how to use computer?  Such as that person left behind a paper that says


ledger wallet seed


24 word phrase



binance


email
password



coinbase


email
password



bluecoin wallet

account adfsmskdj
password lkfasdjfsdfas


greencoin wallet


accounta sdfdskjjksda;jasdfj
password aflkdskafjdsjfas;jldf




Are there places where they can bring this to in public like an office or something and that company or business help them recover everything for a fee?  I assume it probably would be like a fee for each place its located?



Then they probably have to contact an accountant with all these accounts right?

[jerry0]

Like to add something to this.  Binance and Bittrex give you a code for your phone for 2FA in case you ever lose your phone device connected to it.  Does the family need to have the codes for both of these to access it?


Of course if someone in the family knows how to use crypto and can do everything themselves and claim it themselves, that would be easier.  But most family or relatives i assume don't.  But even if they do, they have to contact an accountant on this since its going to be a mess right especially if they have no idea if their family member paid entire taxes, some taxes or no taxes on it?



Also a related question.  But if someone has your bittrex or binance secret code, they can't reset your device right or they could just by having that?  Or they need to know at least your email address at least?

[Viron]

Your post is rather thought-provoking.
Most people in my circle wouldn't know how to withdraw any inheritance that I'd leave them, even with me describing the process, hopefully crypto will become more mainstream as time goes on, so that people will be more knowledgeable about these kinds of things.

[joniboini]

Read examples of people gone and they never gave their family or relatives their keys to their crypto.  How do most of you handle this?  Now if you have everything in your nano ledger s or trezor or even electrum for example, well you give them the 12 or 24 word seed and they have it.  Now i thought of some issues.  What if they dont know how to operate a computer?  Who do they turn to?  Are there bitcoin services where when someone is gone, their family or relatives go to that service and say this is the code or phrase for the crypto and they mention if its stored in a hardware wallet or exchange or electrum etc and have that service get their crypto for them for a price?  Like it will cost $100 or $500 for the service?  Such as they would then transfer the crypto to the family's own wallet or contact the exchange and have them set up the crypto to be sent to their family member's account?

1. If you know about crypto, and you have a family that you trust, then start with educating them about cryptocurrency and basic stuff about computer. It is not that hard to teach them how to manage seed imo.
2. If there's no relative who can operate a computer, and it is not possible to teach them how to do it, then the best option is to cash out your crypto once in a while and transfer the money to their account.
3. I think there are some services like that, but I personally won't trust anyone outside my family except if we can use multi-sig. Unless you can access a store vault in Swiss which values privacy and personal matter a lot.

The other issue comes then is taxes.  Most likely that person who has crypto stored most likely did not pay all or most or any of the taxes assuming they were holding for a long time.  Now if they paid all the taxes, well you could transfer the money to the family member but there is only a certain limit they can transfer a year without taxes i believe right?  This is concerning ppl in the US  Now what if that person paid taxes on some of it or none of it.  Well the family can't just take the money into their bank account since that person didn't pay any or entire taxes of it.  So how in the world would that work then?  Because when you file taxes on crypto, it needs to be written down when was the coin bought and sold and at what prices.  The family or relative wouldn't have a damn clue about it.  They also wouldn't know when they got it and say that person was a trader, they wouldn't have access to say the 500 or 1000 plus transactions that person did etc even if most were basically buying bitcoin and selling it for altcoin immediately since most altcoin you can't go from altcoin to usd or usdt etc.

Can't comment regarding taxes as it differs in each country.

Does anyone have experience or tips on this?  I think leaving crypto behind in a hardware wallet is the easiest right?  But what if some were in an exchange like bittrex or binance?  Do they contact bittrex or binance about it and then send in the paperwork?  Of course they would need that person's binance or bittrex email address and that person most likely had 2FA.  How does that work then?  I assume coinbase probably would be the easiest to work with?  Now let say that person also had their own wallets in their computer like for example bluecoin or greencoin where its not compatible with hardware wallet and they have some of these wallets on their computer.  Now if their family has the seed or phrase for this, they can claim it but if they have no clue how to do this on computer, are there services that allow this?  So imagine someone has crypto in their trezor or ledger and some in computer like bluecoin and greencoin and some in binance and coinbase.  Are there services that would help them recover all these for a fee?  Thus they would help that family email binance of coinbase assuming that family doesn't even know how to use computer?  Such as that person left behind a paper that says

You should never leave your crypto in exchange in the first place. If it were me, I'd always withdraw all crypto from exchanges, saves all seeds/password etc in a safebox with key and I'd tell my wife or kids how to manage it. But if such case like that happened, then your best best is to contact exchange support and proving that the original owner is dead (good luck with that).

Also a related question.  But if someone has your bittrex or binance secret code, they can't reset your device right or they could just by having that?  Or they need to know at least your email address at least?

They can access your 2FA. If they know your password & 2FA code plus email address (+its password), they can reset it. But I believe some exchange also requires SMS verification on top of this (depends on your settings tho).

IMO all of your issue is easily solvable if we can:
1. Teach our family about crypto and computer, at least on how to use it to manage crypto asset.
2. Prepare the backup/key/seed and save it in a safe place for them.

[Bitinity]

Your post is rather thought-provoking.
Most people in my circle wouldn't know how to withdraw any inheritance that I'd leave them, even with me describing the process, hopefully crypto will become more mainstream as time goes on, so that people will be more knowledgeable about these kinds of things.

So you need to start to teach them about crypto, at least the one who you trust more than others. We do not know how long we will stay in this world, so preparation for the worst case is better especially if we are dealing with huge amount of money (in crypto assets).
At least we should have one person to cover, in this case I trust my wife. I teach hear everything that I know, I give her all credentials that I have related to my crypto assets.

[pooya87]

cryptocurrencies don't really have to be any different than any other assets you own, you just have to prepare a will and then in that will you should include all the necessary information that you think is needed for you next of kin to be able to have access to anything you might have. how you do it, can also depend on the size of your "wealth". having 0.5 bitcoin you can just write the private key down on a piece of paper! but having 10000BTC requires some more precautions because you don't want to reveal the keys that can be stolen before you pass on!

as for taxes it depends again on the size and on the country you live in. the tax laws are very different in different countries and you have to consult a professional for this.

[r1s2g3]

If i was smart and had money I would do that, unfortunately from my experience most other crypto enthusiast especially with funds don't trust their wives.

In some cases wives do not think their husband is sane , accumulating the BTC when all world is paying in fiat. They can refuse all the discussion regarding it.

[alisafidel58]

If you say you're from the US then most people there know how to use a computer except the elderlies. You should teach your wife or younger family member how to use a computer and the basic of cryptocurrency and how to operate one like logging with a username and password. Eventually, from the basic, they will slowly understand how cryptocurrency works.

[Kakmakr]

I would rather create a template and give one half of the template to the family and the other half of the template to the lawyer that deals with your estate. Neither one of them can do anything with one half of the template and they might not even know what they have in their possession. 

I will also keep a 3rd copy of this in a secure location, if anything happens with any part of the two templates. I then leave a clue in my Will for the beneficiaries to figure out. <Example : Hide a time capsule type device on top of the pets grave and leave a note with the Pet's name.  >

[Haunebu]

If i was smart and had money I would do that, unfortunately from my experience most other crypto enthusiast especially with funds don't trust their wives.

In some cases wives do not think their husband is sane , accumulating the BTC when all world is paying in fiat. They can refuse all the discussion regarding it.

Lol. This is true only if such wives don't have any sort of knowledge regarding BTC or crypto in general in this case. In this scenario, the better choice would be to educate your parents or siblings(Whom you trust completely) in this regard and help them learn how to access the coins in the worst-case scenarios.

[Trofo]

I am happy with my current setup. Don't plan to be gone soon but in case something happens my wife knows location of ledger device as well as seed phrase. I have also printed out private keys for some other coins. She doesn't know enough about crypto/computers to use it on her own but I also left her a list of family friends which should have no problem accessing it and I trust them enough.

I believe she would be able to access about 95% of my current portfolio. Only some small amounts on exchanges and some shitcoins would possibly be lost.

I am also thinking of writing some dead men script, which would send my private keys to few trusted friends or distant relatives in case I don't stop it once every 6 months and let them fight over it. 

[pushups44]

Charles Hoskinson has mentioned that this is one of the issues cryptos will have to tackle in the coming years - passing custody after a death. I imagine there will be a more seamless process for this as the infrastructure is built. We need more options with custodial services and insurance.

[avikz]

Read examples of people gone and they never gave their family or relatives their keys to their crypto.  How do most of you handle this?  Now if you have everything in your nano ledger s or trezor or even electrum for example, well you give them the 12 or 24 word seed and they have it.  Now i thought of some issues.  What if they dont know how to operate a computer?  Who do they turn to?  Are there bitcoin services where when someone is gone, their family or relatives go to that service and say this is the code or phrase for the crypto and they mention if its stored in a hardware wallet or exchange or electrum etc and have that service get their crypto for them for a price?  Like it will cost $100 or $500 for the service?  Such as they would then transfer the crypto to the family's own wallet or contact the exchange and have them set up the crypto to be sent to their family member's account?

This kind of situation will start arising very soon! People have have made a fortune in crypto activities, will need to save it somewhere so that it can be passed to their next generation when he is gone! Pretty much same as a legal will kept with their lawyer! It is also possible that the next generation may not know what is crypto and how to operate them, so they may require a professional service who will set everything up for them and pass the cryptos to their own account, against a fee!

The other issue comes then is taxes.  Most likely that person who has crypto stored most likely did not pay all or most or any of the taxes assuming they were holding for a long time.  Now if they paid all the taxes, well you could transfer the money to the family member but there is only a certain limit they can transfer a year without taxes i believe right?  This is concerning ppl in the US  Now what if that person paid taxes on some of it or none of it.  Well the family can't just take the money into their bank account since that person didn't pay any or entire taxes of it.  So how in the world would that work then?  Because when you file taxes on crypto, it needs to be written down when was the coin bought and sold and at what prices.  The family or relative wouldn't have a damn clue about it.  They also wouldn't know when they got it and say that person was a trader, they wouldn't have access to say the 500 or 1000 plus transactions that person did etc even if most were basically buying bitcoin and selling it for altcoin immediately since most altcoin you can't go from altcoin to usd or usdt etc.

The details can be fetched through the trading history of the crypto exchange. If that person used to trade offline/physically, then it wouldn't be possible to guess the profits he has made unless he maintains a record for the same. If no record is available, then a good faith payment needs to be made based on the existing volume of the cryptos as per the IRS suggestions. This is how the situation can be tackled.

[Ipwich]

I don't have to worry about the tax matters since in our country bitcoin is not yet properly regulated.

I am just more concern on the safe guard of my assets, yes alone we can safeguard but it's not that safe, like in we pass away and no one knows how to access our money, then no one would benefit it. We have to ensure that members of our family knows the code to access it, of course tho whom you really trust. Also, since I am not fan in storing my coins online, so I just hide my hard wallet in my house, but what it unforeseen event like fire or big flood will strike and will destroy it, that's a complete wipe out of our money.

We should have a lot of options, and must anticipate the possibilities or risk in the future.

[Trofo]

Also, since I am not fan in storing my coins online, so I just hide my hard wallet in my house, but what it unforeseen event like fire or big flood will strike and will destroy it, that's a complete wipe out of our money.

You know your coins are not actually stored on your hardware wallet. HW is just another way to access those blockchains. Actual coins are just data in their respective blockchains.
If you own ledger it is enough that you save your seed phrase and you can always buy new ledger and recover all funds. Should work without ledger as well but didn't research that aspect enough. Should be same with all types of HW. I have the phrase stored in 3 different locations and that should be secure enough against natural disasters. Of course with the phrase in 3 locations actual security is a bit compromised but you can't guard efficiently against all types of attack/disasters. It is always a balance between security and ease of access.

[r1a2y3m4]

There is something you need to remind yourself before you leave those passwords and username to someone you know. You need to make sure that they know cryptocurrency. I'm not expecting me to leave this world so early, but we don't know when that thing will happen so we need to prepare on everything. This is why I am teaching my brother how cryptocurrency works and I have a notepad in which all my accounts from different exchanges was typed on that notepad. And it's just on the desktop of my PC.

[Zadicar]

I have given hints to my wife for my password for my trezor and i own an extremely small amount. anyone with a serious amount should have a passcode to a set of metal plate in their house that spell out a private key to their funds. If i was smart and had money I would do that, unfortunately from my experience most other crypto enthusiast especially with funds don't trust their wives.

Even myself dont trust up my wife when it comes to big amounts of crypto inside on my cold storage,not to be selfish but im protecting those funds for future use.You wont even know that someday your wife would able to access those funds without your knowledge since she know everything about PK and other related informations of your storages then probability of that kind of situation might happen and it would really give some headache.

[bhabygrim]

Read examples of people gone and they never gave their family or relatives their keys to their crypto.  How do most of you handle this?  Now if you have everything in your nano ledger s or trezor or even electrum for example, well you give them the 12 or 24 word seed and they have it.  Now i thought of some issues.  What if they dont know how to operate a computer?  Who do they turn to?  Are there bitcoin services where when someone is gone, their family or relatives go to that service and say this is the code or phrase for the crypto and they mention if its stored in a hardware wallet or exchange or electrum etc and have that service get their crypto for them for a price?  Like it will cost $100 or $500 for the service?  Such as they would then transfer the crypto to the family's own wallet or contact the exchange and have them set up the crypto to be sent to their family member's account?


~snip~

For me it would be a good thing to leave a flash drive with a guide inside and all of your wallet or crypto related stuff in it,
So in case anything happen they could still use your crypto and it wouldn't be useless and lost forever.

[Ucy]

The Bitcoin services you are asking of would probably be centralized. This is a problem and why no core bitcoiner has considered it. Such services could be developed for those who don't care about decentralization.
The only services may be a little safe is a third-party service that sends alert and private keys of hardware wallet at owner's home to his/her next-of-kin  he/she dies.

[hxtop]

The subject of digital inheritance is still not solved in many areas, not only for bitcoin. This issue should be addressed comprehensively and systematically and quickly resolved.