Those who bought or mined cryptocurrencies like bitcoin in its early years now have hundreds of thousands or millions of euros in this asset . There are few who have been lucky enough to become crypto millionaires, but many others have made money with these cryptocurrencies even if they did not catch the initial hit. However, what happens to them when they die?
Cryptocurrencies have revolutionized the way of sending money anonymously through the Internet and in a decentralized way. This, however, brings with it some problems, such as the pollution associated with its mining due to its high energy consumption or its use for illegal activities. As they are not regulated by a central bank, their legal interpretation as money means that their inheritance is not regulated by law.
Access keys: “key” to inherit cryptocurrencies
When we die, all our property and assets pass to our heirs, or to the State in the event that there are no heirs. However, with cryptocurrencies it is more complicated. To begin with, the wallets or the accounts of the exchange portals where they are stored are private, and a password is required to access them. Without it, those assets cannot be transferred or accessed by another person.
To access them, it is necessary that the heirs have access to the passwords or keys to be able to access those assets. The most comfortable thing is to tell him in life, or, if not, to do it through a will in which it is explained how to access those keys. However, this option is quite dangerous, since a third party may have access to our keys to steal our cryptocurrencies and move it between addresses until the trail is lost. And, after that, recovering it can be very difficult or even impossible.
Some portals allow inheriting
For this reason, some cryptocurrency exchange portals are integrating the possibility that heirs can prove that a person has died and thus receive cryptocurrencies in their accounts. To obtain it, it is necessary to have the death certificate, the certificate of Last Will and Testament and the will. In the latter case, the declaration of heirs can also be presented.
cryptocurrency exchange
The most popular platforms for buying and selling cryptocurrencies, such as Coinbase and Binance , accept these documents as proof that an account owner is deceased. However, this procedure, being legal and considered as an inheritance of money, will force the recipient of the cryptocurrencies to pay the corresponding Inheritance and Donation Tax , which varies depending on the Autonomous Community .
Due to the volatility of cryptocurrencies , the payment of this tax may vary depending on the value they have at that time. Therefore, the value of the inherited cryptocurrencies would be that of the day and time on which the previous owner died. If this process takes months, there could be a situation where many more taxes are being paid with respect to the current value of that asset.
In short, the most comfortable thing is to allow someone access to our portfolio while we are alive, or alternatively, store the information on physical media, such as a pen drive. With this, we will make sure that no third party can access our wallet and steal our cryptocurrencies.