Bitcoins – not to be ignored
With the ever-increasing reliance on banking in the virtual world, the risk of funds being lost after the death of the owner is becoming too big to ignore. To tackle this issue, people are being advised to leave a breadcrumb trail for their executors to follow.
A huge number of financial transactions are taking place across the world and Bitcoins and other “e-currencies” are playing a large part in boosting this number further. However, passing these virtual pennies on after death is certainly not as straightforward as dealing with a high street bank account. This is worth bearing in mind when thinking about putting financial affairs in order.
One of Bitcoin’s biggest advantages is the security in which it is stored in its virtual “wallet”. This can be on a USB storage device or even in a cloud type service. The wallets are highly encrypted, and access is gained by use of a complex password, making it virtually impossible to access without the owner’s permission.
It is highly unlikely that family will even be aware that a person holds the e-currency unless they are told, meaning virtual funds would still exist after death, but would be inaccessible and therefore lost forever.
Ensuring executors have access
To ensure executors can gain access to the wallet without compromising security and privacy while a person is still alive can be difficult. Important information shouldn’t be recorded in a will, as this becomes a public document upon application for the Grant of Probate from the Probate Registry and as such security would be severely compromised.
It is important that this information isn’t simply recorded in a “strictly private and confidential” document stored with a will in the house, as this makes accessing such sensitive information all too easy in the event of a burglary.
Creating a separate document
It is advised that executors are made aware in the will of a separate document which they should refer to. That document should be stored securely and only be accessible by a password holder chosen by the deceased. The document can contain information as to the whereabouts of the wallet in the cloud or indeed the USB storage device.
Distributing the document
Probably the most secure method would be to make reference again in the will to the existence of the wallet and divide it into several pieces to be distributed to individual family members, friends or trusted parties such as solicitors or accountants. The pieces can be brought together on death to unlock the wallet and transfer the funds. This all sounds very clandestine and convoluted – but a person’s virtual wealth is at risk if they do not take such precautions.
Other online deposits
It isn’t simply e-currencies that can cause headaches for executors, any type of online deposit for ordinary currency such as accounts with The National Lottery, betting websites and PayPal are all accessible by password and can be overlooked. As with an e-currency wallet, provisions should be made for executors to be able to gain access to these funds and cancel accounts without compromising security while the owner is alive.
If you are unsure about how to put steps in place to assist your executors in managing your affairs once you have died, please get in touch with a member of our private client team.