It may not be the cheeriest topic, but it’s an increasingly important one: what happens to everything you have online when you die? Research by the Dutch program Radar shows that 64 percent of the more than 18,000 people surveyed have thought about this at some point.
However, a full 85 percent have arranged little to nothing regarding their own digital legacy. Notably, younger respondents in particular are concerned about what they leave behind online. And of the people who have had to handle a digital inheritance, more than half indicate that it was far from easy.
In this article, we’ll explore how you can sensibly arrange your crypto inheritance before you’re unexpectedly no longer able to do so yourself. We’ll also include insights from expert Joey Moerings, a senior lawyer at Wille Donker advocaten, who previously gave us an extensive interview on the subject.
Lots of Thinking, Little Action #
Of all respondents in the Radar study, 64 percent occasionally think about what they will leave behind digitally when they die. This also means that 36 percent never think about it. Furthermore, a whopping 85 percent of participants have not arranged everything, or even anything at all. Moerings told us:
“The biggest mistake is actually that people arrange nothing at all. And that’s the case for inheritances in general, so not just for crypto specifically.”
We live in an increasingly digital world, which is why it’s not only important to think about your digital legacy, but especially to actually arrange it. Because let’s be honest: have you ever considered how you will make your access codes for crypto available to your loved ones?
Crypto on Exchanges: Ensuring Access for Your Heirs #
Crypto held on an exchange, such as Bitvavo, Kraken, or OKX, is only accessible if someone has your login details and two-factor authentication (2FA). Without this information, no one can get in, which is why it’s important to record it properly.
Start with an overview of all exchanges where you have an account, including the email address you use. Then store your passwords and 2FA backup codes in a safe place, like a safe deposit box. You can also add a short note explaining how to log in and how crypto can be withdrawn.
Of course, it’s important that someone knows this safe deposit box exists and how it can be opened. You can share the code or access information with a trusted person now, or you can choose to have it released only after your death. This can be done, for example, through a notary, who only provides the safe deposit box code or instructions to your heirs when it is necessary.
Remember well: if the heirs do not have the details, they are left with a complicated process through the exchange’s customer service. This requires them to submit documents such as a death certificate and a certificate of inheritance, which often costs a lot of time.
Offline Crypto: Ensuring Access for Your Heirs #
If you store your crypto yourself, for example via a hardware wallet like a Ledger or Trezor, your ‘seed phrase’ is the key to everything. Without this recovery phrase (a password of 12 or 24 random words), heirs can never gain access, even with the device itself.
Therefore, write down your seed phrase physically and store it in a safe place. You can also add a simple explanation here of how the wallet works and how the crypto can be recovered.
Again, it applies that someone must know where this information is located and how it becomes accessible after your death. You can share the location or access now with a trusted person, or arrange it through a notary, for example. Without the seed phrase, the crypto is permanently lost, so clear instructions are essential.
Handling a Digital Inheritance Often Goes Wrong—and Costs Money #
The Radar study shows that handling a digital inheritance is often difficult in practice. A third of respondents indicate that it was not possible, or not fully possible, to handle everything properly.
Of the group for whom it succeeded, it rarely went without effort: slightly more than half say it was not easy, or even not easy at all.
It is also striking that 21 percent of the more than 18,000 participants indicate that settling a digital inheritance has cost them money. In this, Radar looked at the entire digital legacy, not just crypto, but also things like access to bank details and other online accounts.
The most important tip from expert Moerings: ensure that someone you trust can access your codes, at least your heirs after death. So make sure this information is current and remains so. Only then can you prevent an inheritance from turning into a worthless digital safe.