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TECHNOLOGY

How Not to Lose $190 Million When You Die

QuadrigaCX, Canada’s largest cryptocurrency exchange, is unable to access assets after founder dies.

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BY Sean Wise - 08 Feb 2019

how to not lose millions when you die

PHOTO CREDIT: Getty Images

The untimely and unexpected death of the CEO of a startup in the cryptocurrency space may have cost his customers $ 190 million.

Gerard Cotten, 30, died in India last December of complications from Crohn's disease. He was the founder and CEO of QuadrigaCX, Canada's largest cryptocurrency exchange.

According to court filings last week, Jennifer Robertson, Cotten's widow, said her husband's company owes its customers roughly C$250 million (US$190 million) in cash and cryptocurrency. "Quadriga's inventory of cryptocurrency has become unavailable and some of it may be lost," Robertson told the court.

Robertson has access to Cotten's laptop, but told the court that she's unable to open it. "The laptop computer from which Gerry carried out the companies' business is encrypted and I do not know the password or recovery key," she said. "Despite repeated and diligent searches, I have not been able to find them written down anywhere."

I reached out to Ramona Pringle, a leading technology journalist and one of my colleagues at Ryerson University, about Cotten's story. "More and more, passwords, online accounts and other forms of digital property--including licenses, cryptocurrency, and even domain names--are falling in limbo because individuals don't manage such with the same diligence as they do with their real world property," she told me.

She's correct. Researchers at the University of Melbourne have found that few people systematically download and store their online content in formats accessible to others after their death, meaning a great deal of the content may be lost.

And that's just content. Consider other forms of digital property, including online accounts like Paypal and Stripe, social platforms like Facebook, Twitter, and Instagram, and even memberships like Netflix and Hulu.

So how do you safeguard all of that? It starts with knowing the rules.

The Rules

Just like real-world property--like cash, stocks, houses, and cars--digital property is covered by local regulations, legislation, and case law. But digital accounts and assets are also protected by online privacy laws and terms of service, and these are interpreted differently across various jurisdictions.

Can you will your digital property like you will your home? The answer is very platform-specific and varies greatly. For instance, you don't actually "own" shows you purchase on iTunes. You actually only have a right to access them. Further complications arise because each social platform and online service provider has its own policy for account closures in the event of death.

Your best bet is to explicitly and legally give control of those assets to someone. Facebook simply isn't going to let you access your recently deceased relatives account because you email them. That's why we all need a digital will.

What's a digital will? I'm glad you asked.

Digital Wills

A digital will is a document that instructs loved ones on how to manage your digital presence and assets after you're gone. It's a summary of explicit instructions (with passwords) on how to deal with your digital property upon your death.

It can be an informal document that allows family members to close down your online accounts. However, if you want to transfer rights to things like domain names or cryptocurrencies, you should account for that in your formal will. With that in mind, here are four steps to create your digital will:

  1. Make a list. Create a list of all the sites where you have accounts, including social media, photo storage, email accounts, online brokerage accounts, blogs and accounts that automatically withdraw from your bank account.
  2. Appoint an executor. Select a mature person to carry out your wishes after you're gone. Let the executor know about your digital will in advance. Let them know how they will find the document when the time comes. Be sure to name your executor in your digital will. Many sites require both proof of death and proof that you have the right to act for the deceased.
  3. Draft explicit instructions. Make sure people know what you'd like to see happen with each account. For example, what do you want your last Facebook post to be? Who should get access to the photos on Facebook and who should get access to any funds in a Facebook account? Don't guess or leave it to the executor to decide your wishes. Be clear.
  4. Store the digital will in a safe place. A digital will is only useful if it can be found. Consider printing and signing your digital will, and storing it with your other important personal documents. Personally, I recommend attaching it as an appendix to your formal will and leaving it with your attorney.

More and more our assets are becoming digital, so make sure you leave instructions (and passwords) as to your wishes after death. Otherwise, like Cotten's family, your digital post-mortem may be messy and cost millions.

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