How is Bitcoin relevant to applying for Probate?
Bitcoin is a form of Cryptocurrency. If this makes your head hurt then we will try and help you understand. It was the same way for us when we came across the term. Cryptocurrency is something that exists in the virtual world. It is has no physical presence like a coin or note, you will never hold it in your hand. It is a digital asset. You hold it in a virtual “wallet” with a provider or on your smartphone or computer. You pay money in and convert your funds into the type of currency you want to hold or trade. There are many types of coin Bitcoin, Etherium, Litecoin, Ripple XRP etc.
Why is cryptocurrency or bitcoin be relevant to making a will or in applying for probate?
Well the assets are not held in a normal way so they are very difficult to trace. Someone could hide a fortune in a virtual account, you would never know unless you had their log in details or their “cryptokey”. They are not held in the normal banking system so cannot be traced unless you know how. For instance, if I wanted to hide my cash from my partner I could put it all in crypto. If someone is investing or trading secretly much like gambling you might not know until it is too late. That is why it would be important to know how to get access to the account by way of usernames, passwords and cryptokeys. They would still form part of a deceased’s estate so they would need to accessed, gathered, declared and distributed.
Why is a lasting power of attorney so important with cryptocurrency
It is particularly important that you make a Lasting Power of Attorney in case you lose the ability to manage your affairs so someone can manage them for you. Your investment as with any other could be lost or severely damaged if not looked after.
There is a case currently whereby a fund manager has died and the $190m under his control looks like it could be locked away forever without the investors being able to get it back.
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How does cryptocurrency work?
The process is controlled by Blockchain technology. This is a public system which records every transaction simultaneously. It provides an almost instantaneous transaction process. It is said to be impregnable and cannot be changed as any hacker would have to change every record on every system where the records are held at the same time.
There is no central bank and they are not recognised by Governments or financial institutions as a formal currency. However, they have become increasingly relevant and are traded in their £$billions every day. This is why they are becoming increasingly popular with organised crime and money launderers and people that simply want to “stay off the grid”. The transactions are almost untraceable.
When Bitcoin was launched it was worth almost nothing but by December 2017 it reached a record high of $19,783.21 per coin! It is now trading at around $3500 per coin. You can see the attraction in investing and trading in these currencies. Trading is only for those that know what they are doing. It is very risky and you should be aware you can lose as well as make money.
It seems advances are being made daily into established practices. There is even talk of a currency called Ripple XRP replacing the Swift and other banking systems. This is the process banks use to transfer money internationally. The present system is said to cumbersome and costly. Ripple think they can reduce the costs to users substantially.
Starting with cryptocurrency
If you wanted to start investing in cryptocurrency a place to start could be a site such as Binance which has some good tutorials. If you use their own coin to pay fees they give you a discount. Please be very careful and take advice before risking any money. We cannot offer you any advice about investing or trading.
If you are thinking of making a will do not delay. We can assist in helping you get though the process contact us on