Securing Crypto Assets After Death

Demo Bug

Contributor
This is something I've worked on for some time but I can't work out a solid solution.

Assume (these are the MUSTS in the criteria)
I can store crypto securely offline. I have backups that are secured as well.
I manage and trade crypto for a group of ten people and we each own a portion.
We will hold up to 20 tokens, making changes depending on solid news.
They entrust me with ALL private keys so trades can be executed quickly and so they can go about their daily lives
For simplicity, we only use 1 wallet per currency and pool all money together.
Everyone owns different percentages and each token's volatility is unique.

How do I safely distribute these assets in the event of my own death?



My two solutions that just have slight flaws to them

1. Entrust a law firm/bank to send a sealed letter (containing the master password) to a specific member of the group upon receipt of the death certificate. The law firm doesn't know what they have, they just have instructions with an envelope with a tamper proof seal. Assume this would work
Issues: You can't entrust one single person as the backup key recipient because it hypothetically incentivizes them to kill the primary key holder and run off. So that's no good.

2. Law-Firm method above but each person would receive their equal share via that mailed card. So the assets are equally divided in cold storage. This means if we have 10 currencies and 10 people, we will have 100 wallets. Every trade executed will require 10+ trades to redistribute as each wallet will have to be accessed. Yikes.
Issues: Moving crypto and executing trades will be near impossible with 100+ wallets. Selling 1 currency for another means up to 40 transfers every single time you want to get money into the exchange, then out. Quickly exiting If your country suddenly bans crypto, you're pretty much ****ed trying to get 200 wallets emptied and back to dollar.


Has anybody thought this out and figured out a real solution to utilize a trusted third party?
 

The CC Forums

Admin
Staff member
This is something I've worked on for some time but I can't work out a solid solution.

Assume (these are the MUSTS in the criteria)
I can store crypto securely offline. I have backups that are secured as well.
I manage and trade crypto for a group of ten people and we each own a portion.
We will hold up to 20 tokens, making changes depending on solid news.
They entrust me with ALL private keys so trades can be executed quickly and so they can go about their daily lives
For simplicity, we only use 1 wallet per currency and pool all money together.
Everyone owns different percentages and each token's volatility is unique.

How do I safely distribute these assets in the event of my own death?



My two solutions that just have slight flaws to them

1. Entrust a law firm/bank to send a sealed letter (containing the master password) to a specific member of the group upon receipt of the death certificate. The law firm doesn't know what they have, they just have instructions with an envelope with a tamper proof seal. Assume this would work
Issues: You can't entrust one single person as the backup key recipient because it hypothetically incentivizes them to kill the primary key holder and run off. So that's no good.

2. Law-Firm method above but each person would receive their equal share via that mailed card. So the assets are equally divided in cold storage. This means if we have 10 currencies and 10 people, we will have 100 wallets. Every trade executed will require 10+ trades to redistribute as each wallet will have to be accessed. Yikes.
Issues: Moving crypto and executing trades will be near impossible with 100+ wallets. Selling 1 currency for another means up to 40 transfers every single time you want to get money into the exchange, then out. Quickly exiting If your country suddenly bans crypto, you're pretty much ****ed trying to get 200 wallets emptied and back to dollar.


Has anybody thought this out and figured out a real solution to utilize a trusted third party?
My situation is different. I simply wrote explicit instructions along with all the necessary information and placed copies in 2 secure locations as well as in my bank safe deposit box.

Perhaps leave instructions that all paperwork and wallets must be opened and distributed with all other parties present in the same room?

I can’t think of anything else that you haven’t already considered. Interested to see what others come up with though.
 

Demo Bug

Contributor
My situation is different. I simply wrote explicit instructions along with all the necessary information and placed copies in 2 secure locations as well as in my bank safe deposit box.

Perhaps leave instructions that all paperwork and wallets must be opened and distributed with all other parties present in the same room?

I can’t think of anything else that you haven’t already considered. Interested to see what others come up with though.
Wow... That's actually really effective.. The best method I've seen so far by far! I wonder what else people have come up with.
 

CryptoTC

Crypto Fat Cat
Staff member
Wow... That's actually really effective.. The best method I've seen so far by far! I wonder what else people have come up with.
If you put it all in a will but don’t let the lawyer know what’s in the paperwork, it should be fine. Wills and trusts are handled by lawyers all the time without stealing funds.

OP. What about creating a trust that specifies exactly what each member is entitled to? Just agree to update the percentage ownership numbers each week and specify in the trust what happens to each persons money at time of their death?
 

Old Man Crypto

Expert chainblocker
I missed this until now. I had never thought about any of this.

In the US it probably should be included in your will to prevent legal problems later. If someone just suddenly had a lot of bitcoin money after your death, the IRS or other legal trouble could follow. Unless you are really good at hiding it and the person receiving it knows a lot about what to do quietly.
 

alexp

Contributor
I know that Bitcoin and cryptocurrencies in general are regulated as both currencies and as a security under U.S. law. Within the U.S. many states are also pursuing legislative/regulatory efforts to cover crypto instruments. They are regulated as a virtual asset by the FinTech Law. So I'm pretty sure that the inheritance of financial resources is well regulated there.
 

Sandra

Contributor
My best guess is that money pours into crypto during the first 2 quarters of the year as people get their tax returns and invest in projects they like. During this time I expect a significantly rising overall "market cap". I think it will cool off some during the summer and pick back up around the holidays as families and friends get together and reflect on 2018. During this time I believe we'll see periods with bitcoin gaining faster than alts, followed by times where alts are more profitable. The smart, stress free investor is hedged into several crypto projects as opposed to "all in" on one or frequently switching back and forth between alts and bitcoin. The market will likely remain volatile but I believe with QUALITY cryptos, highs will be higher and lows will be higher.Those with patience who've only invested money they can afford to lose will likely outperform most "traders". I think changing tax laws in first world countries will further embolden the HOLD mindset, as (in the US) there is a huge benefit to investors holding assets over a year, much higher taxes for assets held under a year. I think these changing tax laws will also encourage investors to look harder at projects they are comfortable Holding for over a year, so some of the pump and dump energy will fade.

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