How to Build Cryptocurrency Succession Plan?
Developing a cryptocurrency succession plan is something that is often overlooked, but as we’ve all come to realise — things can change fast and it.
Developing a cryptocurrency succession plan is something that is often overlooked, but as we’ve all come to realise — things can change fast and it is good to be prepared.
Sometimes you may have to ask yourself a tough question, which is difficult to envision, but what if you were incapacitated and couldn’t access your cryptocurrency? Do you have a plan if this situation arises?
In light of current events, it may be beneficial for you and your loved ones to include your cryptocurrency assets in your general contingency plan.
Why should you develop a succession plan?
A succession plan is important to make sure that, should something happen to you, someone that knows:
- What cryptocurrency assets you hold
- How to access those assets
- What you want to happen to those assets
There are many sufficient ways of doing this, but a good start would be to write down instructions for your family or friends should your digital assets outlive you. This is a delicate process, but it is an added responsibility to being your own bank.
Since there is no centralised authority present to recover your funds for your family, would your crypto earnings be lost forever if you passed away?
Now, with that out of the way – let’s move on to how to create your plan.
How to build a cryptocurrency succession plan?
Now that you have thought how important a succession plan is for your digital assets, here’s the guide that might help you to prepare the future of your cryptocurrency.
- Make sure that someone knows about your cryptocurrency assets
If you have a Will, your Will should set out what cryptocurrency assets you hold, and where they are stored.
For example, if you have a Jaxx hot wallet, a Ledger hardware wallet and accounts with Binance and Kraken, make sure your will sets that out, so that the executors of your estate know where they should be looking to find your crypto assets.
- Make sure that the right people can access those assets, if needed
This is obviously critical, as there’s no point telling people about your assets if they can’t access them! The key idea of having a cryptocurrency succession plan is to allow a trusted associate to have a backdoor into your cryptocurrency wallet.
Now, assuming you’re a highly safety-conscious individual (as most of us are in the crypto world!), it is imperative that this backdoor is only in the hands of someone you thoroughly trust — someone who has your legacy in interest and not your wealth.
Easy Crypto would recommend placing this responsibility in the hands of some of the likes of a family friend, spouse, oldest child, childhood friend or another trusted family member. Once you’ve chosen your successor(s), sit down with them and ask if they would be willing to take on this responsibility. Provided they agree, (and if they don’t it may be for the best), it is now time to create your backdoor access by passing on a copy of your private keys to your successor.
You can add extra security to this process by splitting the access instructions across more than one person. For example maybe your lawyer has half of the backup phrase for your wallet, and your children have the other half. Be sure to avoid having a single point of failure, for example if your spouse has one half of the private key for your wallet and your children have the other half, what happens if your spouse passes away at the same time as you?
While this is something that we may prefer not to think about, it’s important to make sure you have a succession plan that is robust, if you want to be able to pass your assets on.
- Set out what should happen to those assets
Your cryptocurrency succession plan could include all sorts of instructions like donating it to charity, setting strict instructions on how long it must be held or something more personal catered to your unique situation or environment.
Whether you chose to pass it on to your loved ones or donate it to a good cause, having a solid protocol is the only way you can ensure that your crypto doesn’t leave this world with you.
As mentioned above, you have several good options for what your plan may behold, and your plan should be built to cater to your unique environment or circumstances.
My personal plan is to pass my crypto on to my loved ones, with a strict rule that no crypto shalt be sold for 30 years. If you have any questions, don’t hesitate to reach out and contact us.