It seems that the media is increasingly talking about cryptocurrencies (which, in short, are online-based units of currency using cryptography for security). One of the most well-known forms of cryptocurrency is Bitcoin. This article is not going to explore the pros and cons of cryptocurrencies or offer any kind of financial advice in any way but rather will point out the importance of recording the whereabouts of online assets and some of the implications of inheriting online assets.
A few years ago, I wrote the article “Inheriting Assets in the Digital Age – What you need to know” and being aware of how to inherit digital assets is increasingly important because more and more people are banking and investing online generally. With digital assets becoming ever more prevalent, it really is essential for such assets to be recorded. Let’s look at an example of what can happen if assets are not properly recorded.
Justin invests £10,000 in Bitcoin (which, at the time of writing this article, is worth 1.274 Bitcoin). Justin does not mention to anyone he has invested in Bitcoin, makes no recording of his investment, and receives nothing in the post about Bitcoin. Justin then dies with everything in his Will passing to his partner Claire. Claire will know nothing about her late partner’s holding in Bitcoin and so will be unable to inherit her late partner’s Bitcoin.
If Claire, however, knew about the presence of Justin’s Bitcoin holding, Justin ought to have made her aware of how to access it and any digital wallet in the event of his death; for example, any digital keys, passwords or codes would need to be available for Claire to access in the event of Justin’s death.
With cryptocurrencies like Bitcoin and online assets becoming increasingly widespread, make sure you have made a Will and let your beneficiaries know exactly how to access your assets (online and offline) upon your death. Making a Will is highly recommended (whether you own digital assets or not) and digital assets can be specifically included in a Will should you wish but the wording must be drafted correctly.
It is also important to note that because fraud is commonplace, only allow people you absolutely trust to have access to your private information enabling access to your online assets so that it is possible for these to be dealt with after your death.
Furthermore, anyone who deals with an estate of someone who has died leaving a cryptocurrency like Bitcoin should also be aware that that would be an asset falling into their estate like any other asset when considering the Inheritance Tax position of the estate.
This article was written on 25 January 2018.
This article aims to supply general information but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek specific advice.
Capron & Helliwell Solicitors offer a range of legal services at the firm’s Stalham and Wroxham offices near North Walsham and Norwich in Norfolk. The firm specialises in areas including family law, conveyancing and private client law including wills and probate. Capron & Helliwell Solicitors offer initial fixed fee family law appointments – please call 01692 581231 for further details or to make an appointment