Decoding the succession story of investing in cryptocurrency

If you are familiar with the world of investing, you must have already been tempted to invest in the new rage — cryptocurrency. Buzzwords like Crypto, Bitcoins, etc. have been doing their rounds for some time. Even as the authorities are yet to recognise and regularise it, people are taking the plunge into digital investments.

However, not many talk about what happens to these digital assets in case of the (untimely) demise of the investor. In the absence of a government ruling on its legality, can there be a nominee, or will the legal heir inherit them?

Nominations on exchanges

While the Union Budget 2022 did talk about taxation on cryptocurrency, digital assets still lack a concrete succession policy. Several exchanges in India have started introducing a nomination process for its customers. The details of the nominee or the inheritor — name, mobile number, address — can be updated on the exchange website. In case of the demise of the customer, the funds can be transferred to the inheritor's account.

Include crypto in your will

Just like in case of other assets, in case there is a nominee and not an inheritor, the former is the custodian until the legal heir or the inheritor mentioned in the will receives it. Customers should be careful to mention the nominee/inheritor in their will as the legal heir. They can also assign a password and mention it in the will or portfolio.

Until cryptocurrencies are regulated by the government, they can be included in the will as any other legal asset. An even better idea would be to have a digital portfolio with the information of all your assets and investments so that they are easily accessible.