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Bitcoin & Death

Andrew Aitken and Ilana Kacev

What will happen to your Facebook account when you die? How about your tweets on Twitter? Photos on iCloud? What about your songs on iTunes?

Most of us have dozens of accounts with numerous online providers. Whilst they differ in specifics, most offer policies and procedures for closing the account of a person after they have died.

For example:

Google provides an optional “inactive account manager”, where you can direct for your account to be automatically deleted after a certain time of inactivity.

Facebook, upon receiving a link to an online obituary, will “memorialise” the account of a deceased person, so that it remains online but no new “friends” can be added.

Twitter will also deactivate an account upon proof of a user’s death.

But what if you wish to have some accounts maintained after you pass?

What if you traded in Bitcoin or had intellectual property (such as copyrighted materials) in your cloud account and wish to leave some of those assets to your estate? In that case, you will need to leave instructions with your “digital executor”, together with the relevant passwords. These can be contained in a list attached to your Will and kept with your solicitor. Alternatively, some online tools such as “Legacy Lockbox” can assist, allowing you to store and release your passwords to a nominated person upon your death (and update these as frequently as necessary).

This very issue became a complicated problem in a long running matter in which accredited Wills and Estates specialist Ilana Kacev acted for the mother of a deceased person who died in his early thirties, in a motorbike accident in a third world country, without leaving a Will.

The deceased had been trading in Bitcoin before it skyrocketed in value. The heavy level of encryption on the laptop meant that no one could access the Bitcoin account, not even IT programmers engaged to hack into the laptop. Before the deceased’s death the Bitcoin was only worth approximately $15,000, however during the administration of the estate, the value soared to over $200,000.

This matter was another timely reminder of the importance of having a Will, but also getting thorough estate planning advice. The deceased died intestate and had assets in Thailand, Malaysia and Australia. There was also a woman in Thailand claiming to be his de facto partner and seeking the entirety of his estate. Not only did the deceased’s family have to dispute the woman’s claim as to her de facto status, but had to engage in complicated and lengthy steps in administering some of these assets.

With the benefit of good estate planning, including considering who might have passwords to his Bitcoin account and the like as well as consideration of how to deal with his overseas assets, the deceased’s family might have been spared from many years of stress and uncertainty following his death, as well as the increased costs of administering an intestate estate.

The importance of having a Will is discussed in our article labelled "Why have a will?"

Click here for more information about our expert Wills and Estate Planning department.

For any estate planning advice please contact Ilana Kacev or Andrew Aitken.

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