With the rise in popularity and value of bitcoins and other cryptocurrencies, new questions have arisen for Georgia residents who want to get involved with these forms of digital investments. Backed up by blockchain technology and often characterized by anonymity, cryptocurrencies can hold great financial value. As they are personal property, it can be important to account for them during estate planning.
Because bitcoins are encrypted and exist in virtual space only, their security is a major selling point. Private keys are used to manage access to a bitcoin wallet, and there is no way of retrieving the key to either reset the password for the original owner or to grant access to a rightful heir. If a bitcoin owner passes away without giving the private key to another party, the bitcoins are simply lost, and there is no way to retrieve them.
Even when leaving the private key behind in some form for heirs, it can be important to accompany it with instructions and directions to the correct repository or storage wallet. This can be one option and can include storing the actual data in a safe deposit box to be opened after death. Other options for passing on bitcoin include a time-locked future transaction, but this is dependent both on guessing one’s time of death and also being aware of bitcoin accounts for one’s heirs. Another option is to use a specific bitcoin management third party that offers accounts that can be legally accessed by heirs.
In any case, accounting for bitcoins and other digital assets can be an important part of estate planning. These properties can be passed through wills and trusts like physical properties. An estate planning attorney can work with people to develop documents that fully track their digital assets and make life easier for their heirs.