Death and taxes are two things that cannot be avoided. But if we can still argue with the second (hello, crypt!), the first poses a serious question: "What will happen to my digital assets after I'm gone?".
Imagine the situation
You are a successful crypto enthusiast. In the portfolio - Bitcoin, Ethereum and some Stacks for the soul. But here's the paradox: your physical wallet, stuffed with hryvnias, will get to your heirs faster than the private key to a crypto wallet. The reason is simple – traditional law is not very friendly with digital assets.
Legal loophole
Cryptocurrency does not have a physical medium, so it cannot simply be "written" into a will. But you have to pass on your wealth to the next generation. This is where the game begins: if your loved ones do not know the private key, your wallet turns into a digital museum that only the blockchain can access.
How could it all go wrong?
1. Loss of access. If you didn't leave any instructions or clues, relatives can only guess if you had Bitcoin or if it's just a "family legend".
2. Tax. Ukrainian legislation requires the declaration of inheritance. But try to explain to the notary what a private key is.
3. Fraudsters. If information about your assets becomes public, there will always be someone who will try to "help" your heirs.
The solution: a crypto will
No, this is not a separate document that will be prepared for you at any registry office. This is a plan that will allow you to keep access to assets for your loved ones.
1. Multisig wallet. This is a wallet that requires multiple keys to access. You keep one key for yourself, and give the others to trusted people (lawyer, relatives).
2. Private key in the safe. Securely store the key in a physical safe and leave a document with instructions at the notary.
3. Legal consultations. Some countries have already begun to recognize digital assets as part of heritage. Find out how it works in your jurisdiction.
Will the IRS be able to get to your vault?
If your Bitcoin is stored in a cold wallet, the government is unlikely to find it without your help. But if you held assets on the stock exchange, be prepared that KYC information will become the basis for collection of inheritance taxes.
Visnovok
Cryptocurrency gives financial freedom, but with it comes responsibility. Creating a plan for transferring assets is not only about taking care of your loved ones, but it's also a way to make sure your digital legacy doesn't get lost somewhere on the net. Because the last thing you want is for your Bitcoins to remain a "golden treasure" accessible only to the blockchain.
