Cryptocurrency - what happens to my digital money when I die?

Cryptocurrency - what happens to my digital money when I die?

Cryptocurrency – what happens to my digital money when I die?

by | Inheritance

Digital money is already 10 years old!  Cryptocurrency uses digital encryption technologies to allow funds to be generated and transferred quickly and cheaply, often cutting out the middleman.  These money services also allow you to transfer money without giving any personal information – which leads to some interesting questions when considering your digital currency legacy…..

  • How do you know if someone owns cryptocurrency?
  • Does it impact your inheritance/death tax obligation?
  • What happens to your digital money if you die without a will?

Cryptocurrency accounts are extremely secure and without knowing the access information, the money is unreachable.  A number of digital money management sites now have transfer of wealth policies in place, but others do not.  Be sure to let executor’s know that you have a digital money account and act in life to ensure it can pass in death.

The wealth contained in these accounts is considered part of your estate and therefore liable for tax if your estate is taxable on death.  As of January 2018, for UK domiciled individuals, HMRC included these values in IHT liabilities.

What happens if you don’t act in life to ensure your digital wealth can be inherited?

QuadrigaCX; a Canadian cryptocurrency exchange platform which allowed the trading of Bitcoin, Litecoin and Ethereum, ceased business in January 2019.  Why?  Because CEO Gerald Cotten died unexpectedly at the age of 30.  He had the sole access to the 115,000 customers digital wallets containing more than 180million Canadian dollars.  This money has gone with Gerald to his grave, impacting not just his loved ones but every customer of his company.

If you have digital currency, start planning how it will pass on your death now.  Don’t take it to your grave.

Contact us now for advice on will planning, digital or analogue!

 

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"It was a pleasure to work with Cindy and her team! Even though planning for one’s own death is a project we all can easily put off, it removed an area of stress in my life. I no longer had to wonder if certain people would be taken care of, or where my money would go. Cindy and I worked through the process and she asked a lot of thought provoking questions. The first draft helped me think a second layer down, and made the will more complete. We finalised with her lawyer, signed, witnessed and put away in a safe place, letting my executor know exactly where to find it. I do not hesitate to recommend Cindy’s services."
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