More than ever, people in the crypto sphere are considering their options in light of COVID-19.

Trying to retrieve bitcoins from a deceased relative may be challenging or even impossible. If the bitcoins are deposited at a mainstream exchange or hosted via a third-party, then you may be able to use an estate lawyer to prove that you are the new account owner. -Michael Vogel

For most people, it does not have to be complicated. Here is what I think the main steps are to have a basic plan in place:

Begin with a document that details your crypto assets. It should be available quickly, ideally together with your will. Your heirs will appreciate the simplicity of it all, and knowing the amount involved will help them prioritize the handling of your estate by asset class. Here is the information you should provide for each of the cryptocurrency you own:

Last updated : The date when you last updated each line item

: The date when you last updated each line item Asset ticker : This official ticker symbol of the cryptocurrency

: This official ticker symbol of the cryptocurrency Asset name: The official name of the cryptocurrency

The official name of the cryptocurrency Quantity : How many units of each coin you own across the different wallet types: custodial, non-custodial, hot, cold, etc..

: How many units of each coin you own across the different wallet types: custodial, non-custodial, hot, cold, etc.. Location(s) of access credentials: Depending on your situation, store the credentials needed to access your funds at a minimum of two sites outside your home.

Depending on your situation, store the credentials needed to access your funds at a minimum of two sites outside your home. Location of all of your tax-related documents: Ideally, you will use a cryptocurrency specific tax software or a spreadsheet if you mostly hodl.

A second document should contain detailed instructions on how to gain access to the assets. As you can anticipate, gaining access to that document does give access to your coins unless you exclusively make use of multi-sig wallets. Split your coins accordingly. Let’s look into this in more detail.

Hot wallet.

Many people have their hot wallet installed on their phone. Here is the information you need to document: phone number and model, telco provider, phone password, apps name and password of the crypto wallet, and the 24-word seed. You may need to document your access credentials to Google or some other cloud account as well. The crypto amounts involved should be insignificant relative to your overall wealth. It is not worth the trouble to make it complicated to access these small amounts. A sealed envelope, let’s call it a package, containing your document at each location, should suffice.

Custodial wallets

A custodial wallet entails that the wallet is hosted on your behalf by another entity, which also has control of your cryptos. You first need to document how to reach the wallet or the custodian, depending on your specific situation. Most often, it will be via the web site of a custodian or an exchange. You also need to document the credentials for accessing the site. Nowadays, most custodians and reputable exchanges will also have implemented some form of two-factor authentication (2FA), which often runs on a phone. Include the following info in your document: phone number and model, telco provider, the backup key for restoring the 2FA, should it need to be restored, and the password to your account. If more credentials are required, include them as well. You may need to document your access credentials to Google or some other cloud account as well. The amounts involved could be substantial. Please consider splitting the information into two or more separate packages so that access to any single document does not compromise your funds. Upon your death, your heirs should require the proper paperwork and personal identification to access those documents and initiate the transfer. In more sophisticated cases, the custodian will also perform additional checks. Make sure your estate has the necessary documentation to finalize the transaction with the custodian.

Cold wallets

Single-signature wallet: Include in your credential package a working copy of the hardware device and optionally the PIN and the 24-word seeds should there be a need to restore the keys on a new device. Include a link to the user guide for the device. Document what application to use and on which computer or smartphone. Again, use the same approach of splitting information across multiple documentation packages. I suggest deploying a working device with each package but with only part of the information. Two or more packages will be needed to operate or to restore the device. This setup works best with a single heir, which can collect, upon obtaining the proper authorization, the packages and proceed with recovering your funds.

Multi-signature wallet: Should you have multiple heirs, this is one of the most sensible solutions. Provide the contact details of the other signatories to execute the transfer of funds to your heirs. On a 3 of 5 signature model, you could have to document the access to an auto-signature service, a law firm, a custodian, and your own signature. I presume that your heirs would already have access to their own signature information. Upon your death, your heirs, together with two of the other external parties, could recover the funds and transfer them according to your will.

Conclusion

Take the time to document and communicate your plan to your heirs. They need to understand the process, and you need to address their technical limitations. The wallet solutions available today make it much more comfortable than before for newcomers to manage their funds. Show them the way, and they will move forward in life, managing the funds you gave them with confidence.