recent death of the CEO of QuadrigaCX, a major cryptocurrency exchange in
Canada, demonstrates a basic, yet often-overlooked, tenet of effective estate
In the event of your incapacity or death, if your heirs don’t know how to find or access your assets, those assets are as good as gone.
In the case of QuadrigaCX’s owner Gerald Cotten, the lost assets were purportedly worth $145 million, representing the vast majority of the company’s crypto holdings.
The hefty sum effectively vanished after Cotten died without leaving instructions for how to access the digital currency’s security passcodes. The crypto holdings were owned by some 115,000 clients, who used the exchange to buy and store their digital coins.
An untimely death
According to an affidavit filed in a Canadian court, Cotten, age 30, died suddenly of complications related to Crohn’s disease while traveling in India during December 2018. In January 2019, QuardigaCX filed for bankruptcy to protect itself from creditors, including all the customers with crypto stored in the company’s electronic vault.
to Cotten’s widow, Jennifer
Roberston, following multiple searches, she has been unable to find the
passwords that will provide access to the company’s crypto holdings. The lesson
From cryptocurrency to safety deposit boxes and everything in between, your family must know how to find and access every asset you own, otherwise it could be lost forever.
In fact, there’s a total of more than $58 billion of unclaimed assets across the country held by the State Departments of Unclaimed Property. Much of that massive sum got there because someone died and their family didn’t know they owned the asset.
Incomplete estate planning
Another puzzling fact is that upon first glance, Cotten was diligent in his estate planning. Indeed, Cotten named Roberston as his estate’s executor and left her instructions for the complete distribution of his assets, including a private jet and multiple properties in Canada.
He even left behind $100,000 for the care of his two dogs—yet he managed to forget to include the passcodes that would unlock his company’s vast crypto assets. I believe that most people holding crypto assets haven’t taken the proper steps to ensure their heirs will know how to access these assets upon their incapacity or death.
What makes this loss so tragic is that it could have been so easily avoided. Whether your estate is valued in millions or thousands, your plan must include a comprehensive inventory of all your assets. And as Cotten’s case shows, this inventory must also include detailed instructions for how your heirs can find and access every asset.
Dedicated to empowering your family, building your wealth and defining your legacy,