E216 Bitcoin’s Unclaimed Property Problem
Bitcoin is getting more mainstream every day. But new bitcoiners need to be aware of the unclaimed funds problem. Hopefully we can contribute to a solution.
E214 Transferring Bitcoin Upon Death
Let’s review a real-world case study of a client’s plan to transfer his bitcoin upon his death. This looks like an elegant solution, so let us know if you see any major red flags!
Cloned wallets and sharded seeds
The client’s plan focused on clone wallets and sharded seeds.
The plan starts with two clone hardware wallets. A hardware wallet is like a minicomputer that plugs into your USB drive, but it is not fully connected to the internet or the computer. It keeps your private keys/secret codes offline while allowing you to interact in online transactions. When you clone your hardware wallet, you make duplicates of it. Each clone wallet is password protected.
The client gives one clone wallet to his executor. He gives the other clone wallet to his sister (who is an heir). Neither the executor nor the sister has the PIN to the wallet. They just have the device. They will receive the PIN upon the client’s death either by dead man’s switch or from another heir.
Then the client shards his seed phrase. Remember the seed phrase is 12 or 24 secret words that you can use to recover your cryptocurrency if something happens to your hardware wallet.
The client has divided his 12 words into two chunks of 6. The client gives half of those seed words to his executor. The executor won’t receive the second half of the words until the client dies.
Upon death, the executor will receive the PIN code to his clone wallet and then he has access to the cryptocurrency. The back-up plan is that the sister receives her PIN code from another heir or dead man’s switch. Then she has access to the cryptocurrency. In the event of hardware failure, the executor will receive the second half of the seed words to recover the hardware wallet.
Risk of theft vs catastrophic loss
Plans need to balance risk of theft vs. risk of catastrophic loss. You are twice as likely to lose your cryptocurrency than to have a hacker steal it from you. It is more complicated than memorizing a PIN code. You don’t have the safeguard of calling a bank to reset your PIN. It is also easy to over-complicate things and make it too difficult for your heirs. There might be security holes in your plan, but are they big enough to merit increasing risk of catastrophic loss?
Redundancy, and balancing risks
Using multiple hardware wallets is tangible and understandable. A hardware wallet is a device, and it needs a code to access the cryptocurrency. If hardware wallets fail, then you can always shard the seed phrase.
By using cloned wallets, there is a slight increase for the risk of theft. In this case, the client accepted the increased risk of theft to decrease the chance of his cryptocurrency disappearing upon his death.
While this plan isn’t perfect, I like it. Please pick it apart – I want to hear your feedback. We might not be hard-core “bitcoin-ers,” but we do know what happens when people die! Being an executor is not easy. If you add cryptocurrency to the executor’s job, it’s definitely harder. It will be interesting to learn more as people die holding cryptocurrency.
If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.
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E213 What if Witnesses to Will Cannot be Found?
We’ve talked about mistakes when choosing the witnesses to your will (5 Mistakes With DIY Wills and Witnesses), but what actually happens if you can’t track down a witness during the probate process?
E211 Use a Personal Property Memorandum to Bequeath your Stuff
Many people make this mistake with personal property when creating their estate plan: They include a long laundry list of the tiniest items in their official, legal will.
E201 Should I Name a Trust as Beneficiary of My Accounts?
Another question that we receive often is “should I name a trust as beneficiary of my estate?” In a recent case, Rhonda reached out to us, because she wanted the benefits of a trust (avoid probate, reduce chance of a “will contest,” etc.), but she was not quite ready for the headache of a full-blown trust setup. In her particular situation, naming her trust as beneficiary makes sense. If you are considering this doing this, here are a few things you should consider.
E194 Tips from Founder of The Elder Orphans Support Group
We are thrilled to have spoken with Carol Marak, solo aging advisor and advocate. Carol is the founder of the Elder Orphan Facebook Group, which launched in 2016 has almost 10,000 members. She also has a very successful YouTube channel called Solo and Smart and her book Solo and Smart, is slated for publication in 2021.
E193 What Happens When Your Partner Dies and You’re Not Married?
It’s not uncommon for couples to forgo marriage. Instead, they choose to live their lives together as partners and significant others. But what does that mean for the other person when their partner dies?
E192 How to Plan for Old Age and Being Childless With Joy Loverde
We had the privilege of speaking with Joy Loverde, author of two books, The Complete Eldercare Planner and Who Will Take Care of Me When I’m Old. She’s an expert in this area of solo agers and we are grateful that she shared her insight with our followers.
Who Will Take Care of Me When I Get Old?
This is a very important question and Joy says that the answer is yourself. It’s a mindset. You
have to have the willingness to talk to others, make plans, and be willing to have these difficult
conversations right now. These conversations include signing legal documents, having them in
order, and having money in the bank.
Joy says that quite often, people are surprised to learn they are the person to take over the roll
of caring for someone. You never know who will land on your doorstep or something will happen
to us.
The reality is that some people do not have family members that will around when the time
comes. There are community groups out there for just this situation.
There are situations where there is no one to care for you and you run the risk of becoming a
ward of the state. This is not ideal. Joy says that you should do your research now to see what
you may need down the road. The worst thing you can do is do nothing.
Benefits of Aging in Place
There are quite a few benefits to aging in place. But you need to show up and get out in the
community where you live so that others get to know you and you get to know them.
We get to know our surroundings and navigate them by memory, and if we get to know our
strengths and weaknesses now where we live, it will be beneficial to aging in place. You have to
be conscious of where you live. You can’t assume that things will be in place all the time. That
goes for both inside and outside of the home in the community.
Disadvantages of Aging in Place
There are certainly a few disadvantages and risks, starting with the home aging along with us. A
bedroom on the second floor or basement laundry may also pose problems.
Another huge issue is that as we age, we may become forgetful. Being alone and forgetful is a
recipe for disaster, especially financially. We need to remember to keep money in the bank, pay
bills, etc.
Lastly, there is a caregiver shortage. There may not be anyone available to help when you
finally make the call to an in-home agency.
Manhattan and other big cities are a great place to age alone, as the city is walkable, and the
buildings have security. One advantage is that it’s easier to make friends. People tend to get
know their doorman, neighbors, and even the mailman. Buildings become their own community.
There are also many social activities you can get involved in that you can walk to.
Outside of the city, transportation can become an issue. Particularly driving cars as we age.
This is something to consider. You will need to factor in the cost of paying for ride share cars
each time.
How to Reduce Social Isolation (Zero Isolation)
Joy’s chapter Zero Isolation talks about how to make friends. She says that one of the things we
need to look for when we join an organization is to make sure there is new people coming in all
the time. You want to look for clubs where there is a revolving door which will keep the
organization thriving. If there are no new members, the pool of friends and members may dry
up. You can also seek out new things online – cooking classes, language classes, etc. Just get
out there and meet people.
Another discussion is eating alone. While eating alone is fine, Joy recommends trying to eat
with people as often as you’re able. This can be as simple as eating on a park bench with a new
friend and inviting them to share your meal. Sharing your thoughts and ideas over food is a
great way to meet new friends.
During the holidays, Joy says that you do not have to feel obligated to go to family dinners.
Family dinners aren’t always positive and happy, and you simply don’t have to go. However, you
should be prepared that you may be lonely. A good idea is to plan something for yourself on that
particular day, even if it’s to clean and reorganize your closet.
How We Both Got Into Serving this Community
Anthony is a professional executor. He is hired to navigate estates and probates for families and
heirs that are not nearby or are unable to serve. He realized that there is a great demand for this
type of assistance, and he enjoys being able to help people in this situation.
Joy saw a group of elders sitting alone in the dark at a nursing home on Thanksgiving when she
was just 14 years old. She didn’t understand why they ended up this way, especially since she
comes from a large Italian family. Over time, she realized that it was a lack of communication
between family members, leading her to write her first book. She wanted to get people talking
and we are grateful she has.
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E190 When Does the Executor Tell the Beneficiaries?
When does the executor tell the beneficiaries? Once the court process starts, which is usually shortly after death.
E188 Erica’s Court-Appointed Stranger
Erica Loberg shares the story of her mom’s court-appointed stranger, and what she would to do differently to avoid a court-appointed conservator.
Erica first shared her full story at NextAvenue.org.
About Erica’s mom
When all this happened, Erica’s mom was 70 years old. She was not diagnosed with dementia, technically. But for years Erica’s dad had handled everything. So when he passed away, it created a vacuum for mom’s care.
How did she end up with a court-appointed guardian?
Unfortunately, Erica’s family was divided on how best to care for mom. So their uncle (mom’s brother) stepped in and hired his own attorney. And that attorney recommended an independent, court-appointed conservator to have legal authority over Erica’s mom.
Once that lawyer got the ball rolling, there wasn’t much discussion or debate. This was happening. And before they could get their bearings, Erica and her sisters were in court.
What was so bad about mom’s court-appointed stranger?
First, he was a total stranger. Neither mom, nor Erica, nor any of the family members had ever met this person. And even after he received his court-appointment, he only met Erica’s mom once.
Second, Erica discovered that he had a history of complaints. She spoke with the families of several of his past conservatees, and they had one message: keep him away if you can!
As for his actions:
- He isolated mom from her daughters
- He changed mom’s phone number several times to hinder contact
- He cleaned out mom’s house, disposing of all family and sentimental items
- He ordered renovations to the house, not for mom’s benefit, but to generate rental income or sell (once he moved mom to a nursing home)
- The court-appointed stranger was able to coerce mom into all these steps with the constant threat that he would move her into a nursing home, otherwise
How did Erica finally get rid of the conservator?
Erica contacted every agency and authority she could think of: from the court, to the police, and even the FBI. Finally, she had a breakthrough when she complained to the county Probate Investigator’s Office.
After some struggle and negotiations, they were finally able to rid themselves of mom’s nightmare court-appointed stranged.
What Erica would do differently?
- Discuss with mom her wishes and intentions. And not just when a crisis is at hand. Do it way before mom or dad is on the verge of losing capacity
- Help mom and dad make a will or estate plan
- The rest of family needs to keep their act together. Conflicts will only get everyone dragged into court,
More about Erica
Read the full version of Erica’s story at NextAvenue.org.
Erica is also an author, and published a book of poetry inspired by her experience titled “I’m Not Playing”
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