By now, you've probably heard about Bitcoins. They've been in the news regularly these days and the reports range from describing how Bitcoins will replace paper money in many countries to how Bitcoins are being used as a way to pay for drugs, gambling and sex.

Bitcoins are virtual currency that are generated from a computer based network of individuals that manages Bitcoin balances and transactions. They're "mined" from computer networks through the process of solving a complex mathematical problem.

Bitcoins are traded on numerous exchanges across the globe and converted into the accepted currencies in these countries. They are used to pay for products and services, albeit some illegal. The interesting aspect for me is that they are still being "mined" (or created) today, but at some point in the near future the total amount of available Bitcoins will ultimately be a finite number. This may create a huge demand and value for them in the future.

Although the value of a Bitcoin is market based and has been fluctuating regularly, it was around $130 for a Bitcoin on Friday, and Bitcoins can be divided into fractions and decimals.

Are they something to discuss for retirement? Probably not at this point.

However, for those brave enough to take the dive into Bitcoins as part of their portfolio, the reality is that since they have value, there are estate considerations related to the passing of these assets upon death.

As Bitcoins are digital currency, they are stored not in one's physical wallet or investment account but in something called a Bitcoin wallet. Each of these wallets has a specific address (such as mine at 1KNfuUj7jziyqLDdisVN1TJ7DYiZKUB9dv — feel free to send any loose Bitcoin change my way) that makes them unique and this is what you use to execute a secure Bitcoin transaction.

Wayne Parker, who runs a blog about Bitcoins called The Genesis Block, points out that this secure system also creates a concern at the time of a Bitcoin wallet owner's death: "One of the goals of a Bitcoin wallet owner is to secure his/her wallet so others cannot gain unwanted access to it. This security also prevents your loved ones and beneficiaries to gain access to your Bitcoins in the event of your death unless you have planned for it."

I'd venture to say that this concern has probably not even shown up on estate lawyers' radars at this point. But it's clear that the concept of creating a Joint Tenant With Rights of Survivorship account is not going to fly in this new digital world.

Parker goes on to describe the various ways to address the transfer of Bitcoin wallets from the deceased to their heirs in his blog and quite honestly, many of the solutions are strictly for the tech savvy.

One of the methods that I found to be interesting and could be applicable for those with a sense of humor or just looking to frustrate your heirs, was the approach of dividing your Bitcoin wallet into many pieces and as Parker recommends "create a series of books and movies about it."

Parker describes the process as follows: "It is possible to divide a wallet file into N pieces so that to obtain the keys, all N pieces must be brought together. The individual can give out these pieces to people they trust (spouse, children, grandchildren, etc.) and upon the individual's death, the pieces can be brought together to form the wallet. Once fully constructed, the wallet file can be used to transfer the Bitcoins from the original owner to the beneficiary."

I'll leave it to you, dear reader to potentially apply this approach to any estate (cash based or virtual) plans that you have to force your "always fighting" children to work together in order to get the “old man's dough.”

I'd venture to say that forcing this approach on your heirs may provide a smile to those in the great beyond, whether your family is settling your bondholdings or your virtual currency holdings.