Would you believe that about 20% of the existing Bitcoin have been lost because people did not know how to access it or were locked out of their wallets? It's true! We don't want to believe that it will happen to us, but if we're not careful, it absolutely could. Let us tell you the story about Matthew Mellon, who's estate lost millions of dollars he had invested in cryptocurrency because after his death, they had no way to access the assets.
During his life, Matthew Mellon invested over $193 million in crypto called XRP but never updated his Will to account for his cryptocurrency. He never told anyone in his family nor his attorneys where the key was or how to access it. Instead, he kept the keys to his digital wallet on multiple devices spread out across the country under other people's names. And in case you don't know, without leaving a list of your crypto investments and private keys to digital wallets, no one, not even family, will be able to retrieve your money and it will be lost forever.
Upon Mellon's death, his estate owed millions of dollars in taxes. They hoped to liquidate Mellon's assets quickly and use the funds to cover all of his debts. However, that proved more difficult than expected when they realized that they could not sell all of the crypto at once. Mellon had made an agreement with Ripple, the company that owns XRP, that allowed for only a small amount of XRP to be sold each day. The daily fluctuations in XRP's value did not make things any better for the estate. Ultimately, it took the estate 3 years to liquidate all of Mellon's crypto and by then, his estate was worth less than half of its original value. Mellon's estate was semi-lucky that they were able to recover part of the money due to their lawyers negotiating with Ripple, but that may not always be the case.
Let's learn something from Mellon's mistakes. The lesson is not that cryptocurrency is bad, but rather that you have to account for it just like any other asset. With the help of a knowledgeable attorney, you can develop a plan for passing on these assets without compromising the privacy of your crypto.