Citizens of Wisconsin may be surprised to know that when bitcoin made its debut in 2009, few people were paying attention to this budding technology, and there were plenty of naysayers who wrote off the cryptocurrency trend as a hoax. Nevertheless, the meteoric appreciation in price that bitcoin has witnessed over the past couple of years has made even the most ardent skeptics admit that this technology may be here to stay. However, as with any technological advancement, regulation is still lagging and has a lot of work to do to catch up.
For instance, bitcoin does not lend itself easily to the issue of estate planning. For one thing, bitcoins are a lot like safes: In order to access them, the owner needs to have a special key. Unlike safes, should an owner's key get misplaced, there is no method of 'cracking the safe" and retrieving the bitcoins. Simply put, in the event that an owner loses a private key, forgets where they stored the bitcoins or passes away without giving anyone else their private key, the cryptocurrency will be lost forever.
With that said, there are several methods for insuring that an individual's bitcoin account will get passed on to the proper individuals. One of the methods is to arrange a 'time-locked" transition, which is another way of saying that the bitcoins will be programmed to transfer to the proper heirs at a specific time of the owner's choosing. Naturally, the simplest method of passing on bitcoins is to pass on the private key as well as the location of the bitcoin account, which can be done directly or happen through a secure intermediary such as a bank, a cryptocurrency exchange like Coinbase or a lawyer.
Regardless of how the bitcoins get transferred, it is important to remember that it is not enough to give one's heirs access to a digital wallet; estate plans have to be made to ensure that everything gets divided up fairly and according to the owner's wishes. Any individual with a sizable investment in bitcoin may want to reach out to a professional estate management attorney who may facilitate the process and ensure that the will is carried out.