The future of Digital Inheritance
Why is Digital Inheritance becoming more important?
An asset is any item or property regarded as having value. The vast majority of assets are physical, some examples are precious metals, art, land, person belongings. However, as our world becomes increasingly digital, new forms of assets have emerged that exist entirely within cyberspace.
These assets, referred to as "digital assets", can include cryptocurrencies, NFTs, online accounts, documents, photos and more. Many of these assets have become valuable enough for people to pass them on in their Last Will and Testament.
If you've ever wondered what would happen to your computer, mobile device, online accounts, email address, or cryptocurrency when you've passed away, you've thought about digital inheritance.
The difficulty of Digital Inheritance
Compared to traditional assets, managing inheritance for digital assets is more challenging. This is because anyone who is supplied the data to access the asset, has immediate access to the asset.
Consider this scenario: You have an online account you'd like someone to have access to after your passing. How do you ensure this?
You could share the password with your beneficiaries, but this grants immediate access to the account and would also requires you to update them each time you change the password. Writing the password into a Will isn’t feasible, as anyone who reads the Will could log into the account. Moreover, each time your account’s password changes, you’d need to update the Will.
Alternatively, you could store the password in a secure location known to your beneficiaries or executor. This would require setting up a secure place and trusting your beneficiaries not to access the data prematurely or forget its location over time. If the storage location changes, you’d need to update your beneficiaries. In unfortunate events like a house fire, both you and the stored password could be lost.
In summary, options are limited. However, without a method for getting the password to you beneficiaries at some stage, you risk them never having access to the account if anything happens to you suddenly. In some cases, a beneficiary can contact the service that account is for, explain the situation, and be given access. But this isn't guaranteed, and in the case of Cryptocurrency, is not possible.
What solutions are available and being used?
Cryptocurrency has significantly influenced the development of digital inheritance solutions. The public has resorted to ‘DIY’ options for managing their digital inheritance. For instance, Hal Finney, an early Bitcoin pioneer, had to store his Bitcoin in a safety deposit box, ensuring his children could access it if necessary.
"Discussions about inheriting your bitcoins are of more than academic interest. My bitcoins are stored in our safe deposit box, and my son and daughter are tech savvy. I think they’re safe enough. I’m comfortable with my legacy."
While safe deposit boxes were once among the few options available to protect assets, they are now discouraged due to safety concerns.
New solutions have emerged from the cryptocurrency realm, targeting crypto users. These options may utilise an app, hardware devices, or cryptography to function.
However, these new options have several drawbacks. They often require technical expertise for proper setup and don’t easily integrate into an individual’s Will. They can also be complex to explain to beneficiaries and Will executors. For legal professionals serving as estate executors for multiple clients, it could be cumbersome if each client used a different system for their digital assets. There’s also a considerable risk of the digital assets becoming irretrievable if beneficiaries or the executor lose the recovery data they’re supposed to store.
How Cryptie Inheritance benefits professionals and the general public
Most digital inheritance systems have primarily focused on creating solutions for the end-user. We believe a more effective approach is to equip professionals with the tools they need to expand their service offerings to clients. Professionals like solicitors and wealth managers often make the best executors of a Testator’s Will. When firms are able to handle digital inheritance for their clients, Testators won’t need to set up their own DIY systems.
Cryptie Inheritance, unlike other DIY methods, is designed to be user-friendly for everyone involved, ensuring even non-technical individuals can use it without difficulty. It offers security on par with, if not superior to, alternative options. Furthermore, it significantly reduces the risk of asset loss due to beneficiary or executor errors, a common issue with DIY options.
The maturity of digital assets can be gauged by their acceptance in pre-existing societal facets. We’ll know we’ve made significant progress when a solicitor can confidently answer ‘Yes, we can help you with that’ to a client asking about including digital assets in their inheritance.