This is an opinion piece by Konstantin Rabin, a writer specializing in finance and technology.
Death is not something many people like to talk about too much, but it is crucial to sit down and think carefully about what will happen to all your earthly possessions when the inevitable finally happens.
Despite its importance, a 2021 study found that less than half of all adults in the United States have a will set up at all. While many are too scared to think about it, a large number of people simply feel they lack the know-how to create one or want to wait until they have children before they feel the need to sort out their afterlife.
Over the past year or so I’ve decided to have this “will” discussion with myself, and after much thought and many hours of research, the answer for the best method of inheritance to establish in my own will seemed obvious: Bitcoin.
As things stand in today’s world, you may find yourself in trouble if you don’t write a will. Let’s say tomorrow you’re stoned with no established estate plan. The first thing that could happen is that all your assets could be frozen until the courts take their time to examine every detail of your estate. This alone can take anywhere from several months to several years, depending on where you live and what assets are in your name. If you were married and died intestate (without a will), your spouse might end up having to find an executor, which often costs a lot of money, and then come the months of paperwork and infighting with long-lost relatives who might suddenly start showing up at your door. With all that drama might come the taxman, ready to act as the grim reaper for the assets you leave behind, often taking huge percentages of your savings.
With all of this in mind, making your will with BTC can solve many problems for those you leave behind in the land of the living. I’m going to go through some of my thoughts on this and explain exactly why I decided to set up my will with Bitcoin.
Advantages of Bitcoin over traditional assets
For me, it all came down to two aspects, the first being accessibility. With physical assets, you end up having to do more than paperwork when transferring your ownership after your death. Whether it’s gold bars, an investment-grade whiskey cellar, or expensive paints, it takes a certain level of expertise to move these items from place to place and then to take care properly.
Bitcoin solves that for me. Here you have an asset that doesn’t need anything else than a long combination of 256 bits accessible worldwide, without your loved ones having to wait months to access frozen accounts. This combination can hold all the value I want to convey, without the need for a fancy temperature-controlled room or a two-ton safe. This way, value can easily be transferred and accessed by beneficiaries across the world without the need for intermediaries.
The other aspect of BTC that makes it good to use as a heirloom device is its privacy aspect. We all know Bitcoin’s blockchain technology is as secure as possible, eliminating any security risk, but what about privacy? Sure, it might be possible to find out who owns the BTC if you know who owns a wallet, but like most of us HODLrs, we tend to keep things low.
So, BTC offers security, accessibility, and privacy, but it also occurred to me that there might be issues with this system, so I had to list them and think about each one.
The Challenges and Risks of Bitcoin Transfer
Security seemed like a no-brainer when it came to keeping my stash of coins secure for those I want to leave it to, but again, how do I transfer said coins or pass on a wallet securely? Setting up a smart contract that will run when you die seemed like the perfect solution, but then Elon Musk started these human trials with his brain implantsso this idea could still take a few years.
So you might be thinking, go old school and get a safe deposit box from a normal bank to leave your private key in a well-protected place, and include instructions in your will that will clarify the situation for those you have left. But even then, some technical skill will be required for your beneficiaries to navigate the intricacies of Bitcoin ownership.
Using BTC just got a whole lot easier than it used to be back in 2010, but it still requires a level of technical understanding that can pose a challenge for heirs who may not be familiar with cryptocurrencies. The solution here is obvious: educate your people on the glories of Bitcoin before you find yourself six feet under.
Value and distribution
Bitcoin Price Fluctuations might be something that might scare people away from even viewing this asset as a store of value that can be passed on, but there’s no doubt in my mind that one day even a single satoshi will be worth a pretty penny.
The problem is that while I’m still alive I want to continue using crypto exchanges to trade and add to my bitcoin supply. So how can an ever-growing stack of bitcoins be evenly divided after I die? Well, it’s really very simple, just allocate a percentage of your coins to each beneficiary. This way, you can keep growing your nest egg, and no matter how many coins you have or how volatile the market is, the right percentage will make it into the right hands.
Tools for Bitcoin Inheritance Planning
OK, so in my dive down the BTC-will rabbit hole, I’ve managed to find some tips and tools that should come in handy when planning what happens to your stuff once you enter eternal rest. . Let me briefly touch on two:
This one is perfect for those who are afraid that someone close to them is trying to scam others or something. One way to use multi-signature wallets may be that your attorney and your beneficiaries must each authorize a transaction for it to occur. This extra layer of security can be an easy way to set up your will without too many technical issues. For me, this multi-signature wallet approach is a fantastic idea that I have already implemented.
Bitcoin Estate Planning Services
Believe it or not, I wasn’t the first person to think of it. Specialized bitcoin estate planning services exist and offer solutions to safely manage and transfer bitcoin holdings after your last breath. These services can help a ton by providing expert advice and reducing the risk of loss or mishandling of bitcoin by those who are not too knowledgeable about blockchain technology. While I personally see the value in these services, it’s just not my cup of tea.
Whichever route you choose to implement a BTC will, one thing that should always accompany your last will is a complete documentation folder giving clear instructions on all your wishes. Clear documentation is essential, and the more concise the instructions, the less room there will be for interpretation and beneficiary arguments.
Impact of Bitcoin as a Legacy
For me, it all comes down to building a legacy and playing a part in Bitcoin’s future, even from beyond the grave. Democratizing Wealth is the perfect way to help advance ideas for a better world through blockchain technology and BTC, and by incorporating it into my will, I feel like it helps this cause .
I always aim to promote financial inclusivity and would like to empower my heirs to be exposed to a transformative asset that has already and will continue to shape the world into something glorious. Supporting Bitcoin in this way also aligns with my belief in the potential of decentralized technologies to reshape the future of finance and society as a whole.
By choosing Bitcoin as my legacy, I hope to, at the very least, spark conversations about digital assets, educate my heirs, inspire them to explore the opportunities presented by emerging technologies, and allow them to confidently approach the financial landscape in evolution.
This is a guest post by Konstanin Rabin. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.