Many Canadians wish they had bought cryptocurrency as the value of a single BitCoin rose from $1,229 to $17,618 throughout 2017 (in Canadian dollars). Everyday investors have begun to dive into the Bitcoin craze to make their fortunes even though the cryptocurrency has received criticism financial experts around the globe.
Knowing the importance of including an ‘electronic’ estate trustee.
Owning a significant amount of cryptocurrency can be an exciting endeavour. It was only a few years ago that Canadians could buy hundreds of Bitcoin for only a few dollars. Those who did so are now millionaires with a significant amount of electronic assets—perhaps even a portfolio dominated by them.
Canadians have gone to extreme lengths to protect their financial assets; taking precautions and due diligence when creating an estate plan. When discussing cryptocurrency assets, it’s important to realize that even the smallest detail can often be overlooked.
Cryptocurrency is on track to grow as a part of investment portfolios for Generations Y and Z, rendering it far too valuable to be overlooked in an estate plan. The structure and security of cryptocurrency warrants extra precaution for Canadians planning to pass on or inherit an estate, since overlooking even the smallest detail could render it inaccessible.
Selecting an executor who specializes in technology to maintain and gather your electronic assets has become a best practice. Below, we’ve outlined a few steps to follow when hiring an electronic estate executor to prepare your estate plan.
First, gather your assets.
The first step in securing your cryptocurrencies or digital assets is to make a list of all of your digital-financial holdings. Knowing where your cryptocurrencies are held is extremely important. We recommend including specific details regarding your cryptocurrency wallets or related devices as a best practice.
We stress this because it is extremely easy to misplace or destroy important crypto-related documents. A Bitcoin wallet could be a USB drive left unlabelled in a desk drawer. Similarly, a stray piece of paper might be the only written record of a password.
Those mining cryptocurrencies should also keep a record of the devices they have used. These assets should not be overlooked, as they hold high value and may contain important information.
Before approaching an electronic executor, Canadians should create a list of their assets that include cryptocurrencies or items related to cryptocurrency to form a complete picture of their estates.
Some assets that an electronic executor might include are:
- Cryptocurrency investments (mining hardware, different currency holdings)
- Cryptocurrency holdings (amount, and a physical ledger)
- Cryptocurrency wallet passwords
Knowing what an electronic estate executor can do.
Keeping track of tools, software, and accounts we use on a daily basis is difficult. Even updating them on a monthly basis sits near the bottom of most Canadians’ to-do lists.
“Individuals must ensure this knowledge also makes its way to the electronic estate trustee — Bitcoin has no central registry, so a forgotten password and backup sadly means a huge loss.” – Matthew Urback, FinancialPost.com
Many cases have shown that Canadians unknowingly damage their own personal assets due to lack of knowledge. This includes writing important passwords in their will or throwing out important documents related to their assets. Electronic executors will let you know what must be saved for your estate and then help you store that information securely.
Electronic Estate Executors can provide you with some of the following services.
- Keeping passwords, accounts, and wallets up to date throughout your estate plan.
- Creating a detailed estate plan that includes your cryptocurrency.
- Provide knowledge, insights, and advice regarding cryptocurrencies and related digital assets.
- Keeping your cryptocurrency assets updated and aligned with service policies.