Summary

When applied to digital assets, traditional inheritance approaches create complexity and risk. Among the biggest risks are:
(1) failure to correctly create or maintain an up-to-date inventory of digital assets, resulting in inaccessible assets; and
(2) trusting a weak third party with credentials to access your digital assets. If you choose the wrong person, they could lose the assets, pass them on to an unauthorized third party, or attempt to access them before they are entitled to do so.

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Risks in a traditional approach to crypto asset inheritance

Source: Cremation institute: https://cremationinstitute.com/cryptoasset-inheritance-planning/

Personal Stories

There is a steady drumbeat of these stories happening with worrisome regularity:

• In December 2018, Gerald Cotten, the founder of Canadian Bitcoin trading exchange QuadrigaCX, died (under somewhat mysterious circumstances) resulting in the loss of $250M and the exchange going bankrupt. Gerald was only 30 years old and had not created an inheritance plan, nor were instructions of how to access the centralized assets ever found. https://www.cbc.ca/news/canada/nova-scotia/quadriga-widow-jennifer-roberston-gerald-cotten-1.6318955

• In April 2018, Matthew Mellon, heir to Mellon family banking fortune and former chairman of the NY Republican Party finance committee, and cryptocurrency proponent died. Prior to his death, he held an estimated $1B in Ripple (XRP) - all of this remains were inaccessible as he left no instructions, even though he protected the cryptocurrency via cold storage in multiple locations around the US in different people’s names.
  https://fortune.com/2018/04/17/matthew-mellon-crypto-billionaire/

• In 2017, an unidentified young crypto investor in Colorado died with a small fortune in cryptocurrency held in a coinbase account. The family, however, had no access to the account and eventually had to petition Coinbase directly. Eventually, the assets were released after a lengthy process. If the account holder had not been a U.S. Citizen, this would have been a much more complicated process.

Introducing Vault12 Digital Inheritance

Our CEO and co-founder, having spent time working on early crypto industry deals at Andreessen Horowitz (one of the first VCs in the blockchain space), observed that there was clearly no end-to-end solution for backing up and securing seed phrases and private keys, and also that in the event of death or incapacitation, there was no mechanism to directly pass on assets to a designated individual.That brought the genesis of Vault12!

One of the painful consequences of such “death events” in the crypto economy is that they permanently and forever remove large amounts of coins from circulation, reducing the total available resources for all future users. Left unchecked, this might develop into a far bigger issue for the crypto industry as a whole since just as the industry enters mainstream use in the coming years and decades, the supply of resources available to new entrants will be shrinking.

Vault12 Digital Inheritance is the first solution to offer a simple, direct, and secure way to ensure all your digital assets can be accessed by future generations, for all types of investors.

• Traditional approaches to the inheritance of assets, when applied to digital assets, cause complexity and risk.
• Your portfolio of digital assets is continually changing - you cannot rely on doing an inventory once, or for that matter continually, without assistance.
• This simple and direct approach reduces the uncertainty around assets not being available to the designated recipient. It also avoids having to approach and petition each service individually during probate to gain access.

Introducing Digital Inheritance

Watch the video below for a brief introduction to Digital Inheritance.

Vault12 Digital Inheritance has been designed to reduce the risks associated with managing digital assets and preparing them for future transfer:

• Comprehensive Digital Asset Inventory: Designed to accept all forms of digital assets. When used to secure and backup an investor’s full range of assets, it provides an up-to-date inventory to be inherited.

• Direct access for the designated individual: Offers a simple and direct way for the designated individual to gain access to digital assets without having to petition multiple services or financial institutions.
  
• Privacy Protection: Ensures that, unlike with multi-sig solutions, information about the digital assets is kept private - even from lawyers.