' Laura Kirtley | MTTLR

Don’t Bury your Bitcoin! Estate Planning for Cryptocurrencies

From the transferability of social media or email accounts to maintaining online accounts linked to a client’s virtual assets, estate planning issues regarding digital assets have existed for some time. But, now that blockchain based assets such as cryptocurrencies are more commonplace, there is an increased need to plan for the disposition of these digital assets. Estate planning for cryptocurrencies raises unique concerns and the blockchain technology behind cryptocurrencies might provide potential solutions.   What are cryptocurrencies?   Cryptocurrencies, such as Bitcoin, are forms of digital assets that are encrypted and typically decentralized across a large number of computers so that they are very difficult to counterfeit. Other valuable assets based on blockchain technology exist as well.   A basic understanding of the technology behind cryptocurrencies is helpful to understand some of the estate planning challenges posed by cryptocurrencies. A blockchain is a database that stores “blocks” of information. Blocks are records of information bundled together. Each block has a unique code called a hash. Hash codes connect blocks together in a specific order. So, if one block is altered, the hash is changed, and the enormous amount computing power required to recode all the hashes and restore the chain precludes hacking. The blockchain is shared across a network of computers. This results in the records stored in the blockchain being very difficult to tamper with or change.   Additionally, in order for an individual to access or transfer their own cryptocurrency, they must use their key. A key is essentially equivalent to a password, and usually takes the form of a seed phrase, a randomly generated list of...