Money never stops moving, but people do pass away. It motivates us to leave a legacy, and traditional methods help transfer assets to loved ones. However, investors need to plan for more than just digital assets like cryptocurrencies since they comprise a significant portion of portfolios.
Digital assets add a new challenge to succession planning. Avoiding the topic and postponing tasks like writing a will is common. Many people need help figuring out what to do, and deciding who gets what can be difficult. Additionally, Studies show that only 23% of investors have a plan for their digital assets in the event of their death.
Moreover, Even after dealing with these common challenges, there is the problem of figuring out how to include digital assets. Unfortunately, many people need help with this and leave their digital assets behind with a clear plan.
Andrew Mellon, who came from a well-known banking family, needed a clear plan for passing on his assets to his successors. He left almost $200 million worth of cryptocurrency was left in cold storage wallets that no one could access.
Blockchain-Based Wills: The Future of Cryptocurrency Planning
Blockchain tech can transfer digital assets to beneficiaries without an attorney. But many investors don’t have a plan for their digital assets in case of death. A blockchain-based will with a grace period can help solve this problem. Users can specify transfer details in a DAO with a multi-sig mechanism for security.
Blockchain-based will ensure complete decentralization and security of assets transfer. The user designates the heirs’ wallets and trustees, and the system cryptographically stores all data in smart contracts on the blockchain. So, The heirs confirm the user’s death by voting in DAO, triggering the execution of the will.
It’s also easy to update details by changing the information stored in the DAO without requiring any interaction with attorneys. Blockchain technology has become the standard way to pass on digital assets in the future.
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This article conveys general information, and the opinions expressed should not be considered personal advice for any individual or specific security or investment product.