More than 50% of the adults in the US do not have a Will. Most assume that that they do not have enough assets to bother with one, or that they will write one when they are older. Yet dying without a Will results is going to result in the person’s assets being divided in accordance with the state’s laws rather than the person’s own wishes. As a result, not having a Will leads to delays, expenses, and family battles, not to mention hours of headaches and paperwork..
From bank statements to business cards, it’s no secret that the world is going paperless. Yet most Wills remain written on paper, because the legislation has not caught up with the practical developments. In the United States, only the State of Nevada provides for an acceptance of an electronic Will. The rest of the States currently require a paper copy of the Testator’s signature. Yet this status quo is likely to change soon, as more and more of our world is transitioning moving documents to digital formats, and legislatures across the country are considering various options to regulate these.
As with anything, there are benefits and downsides to electronic Wills. Benefits include ease of creation, modification, and storage. Downsides include risk of tampering, risk of theft of private information, and risk of computer failure (which would erase the electronic copy if not kept in the cloud) or loss of password to a program that is keeping the electronic copy of the Will. Barring that, the biggest downside to date is that that an electronic Will is not getting accepted as a legal Will by most courts in the United States. Nonetheless, despite this lack of acceptance, CryptoWills may still be used to pass down your electronic assets.
Crypto-Wills are a very recent invention, set up on still developing platforms. Crypto-Wills use blockchain : technology that stores information in a decentralized form where information is parceled up in blocks. This decentralized distributed ledger is so attractive because of its transparency, security, and resistance to modification, transparency and security. If anyone tries to change an entry, the attempt is flagged by the system and the authenticity of the attempt is verified.
A testator can make a Crypto Will by listing his assets, beneficiaries, and the desired execution process. Everyone on blockchain knows about the Will, thus it cannot be lost or modified. Yet the Will is also private – both the Testator and the beneficiaries are represented by a crypto-address, so no one except for the beneficiaries will be able to decrypt Testator’s crypto-address.
Crypto Wills bring a solution to the problem of lost digital wealth. It is estimated that over 4 million bitcoins have been lost after the deaths of their owners, because these owners did not share the private key with the beneficiaries. In a Crypto-Will, an owner is able to list both his electronic assets, including bitcoins, and the private key. Since the information in the Will is private, no one except for the beneficiaries will be able to access this information. Simultaneously, the nature of blockchain makes hacking almost impossible, at the time of this writing. Postmortem, the Will would be automatically executed using a Smart Contract, thus reducing legal costs and delays.
If you are interested in learning more about setting up a Crypto-Will, please contact us to discuss your options.