Cryptocurrencies are growing in popularity. It has been seen that these have raised a diversity of unique considerations in estate planning. However, the fundamental technology in cryptocurrencies, blockchain, has enhanced various digital tools other than a cryptocurrency. Here, smart contracts are one of these.
In a broad sense, blockchain technology permits blocks of data related to transactions to get recorded and saved on a distributed ledger. You can take smart contracts as an extension of blockchain. These are the programs that real estate people store on blockchain, and they run when specific pre-determined conditions take place. Hence, it automates the performance of an agreement. Once there is the fulfilment of conditions, the blockchain gets updated, and the agreement goes further.
Smart contracts can also help to accelerate the transaction by eradicating intermediaries. They hence, add a high level of certainty to the performance of any agreement that may be based upon the pre-established terms. Many businesses are already advertising smart contracts in the context of estate procedures and planning. Possibly eliminating the need for lawyers, executors, and other intermediaries in the estate administration.
Wills and Estate Settlement
Death is a grey topic, and you most probably don’t think a lot about the difficulties that arise when a person dies. However, there are numerous such challenges that the blockchain can potentially help to resolve. The clearest could be the issue of settling the estate of a person after they pass away.
it is a challenge to ensure that only the right people whom you want to receive your possessions and assets get them when you are dead. Conventionally, the only way to address such a challenge was to take help of a lawyer who writes a will or testament for you. He used to specify who should receive what after you die.
But unfortunately, these documents are endemic with problems. For example, the will might get lost and hence, leaving your survivors indeterminate of your final wishes at the point of your death. Then, another issue is that one can challenge the will in various ways. Hence, it might end up in the wishes of a deceased person are not honored. Moreover, because wills are mostly drawn up decades before any individual dies, they could fail to address all of the heritable assets that the person had at the time of their death.
How is Blockchain Helpful?
By registering wills or legacy wishes on a blockchain, one can avoid many challenges and problems. Hence, once you have done blockchain registration, you can go ahead with blockchain in estate procedures. With blockchain, you would never lose the data as blockchain permanently stores it. Blockchain-based wills will also be easier for everyone to modify and see during their lifetimes to stay up to date. You can also use blockchain secure QR code to ensure that only the right people access the information. Secure QR codes have a hash value that is matched with a blockchain network QR code hash Value. The data will be available only if the blockchain based QR code is authentic. Hence, there stays safety too.
Apart from this, smart contracts can automatically make inheritance decisions. With them, you can make execution efficient. Moreover, there would be no need to pay executors and lawyers for their assistance in settling estates.
Digital Settlement of Estates
When talking about estate procedures, planning and settlement, it is worth mentioning how blockchain-based wills and testaments might become particularly crucial for solving an estate management problem. However, it is sometimes a problem that the blockchain itself may be forming.
The problem is what happens to crypto-assets after a person passes away. In case you possess bitcoin cryptocurrency, will your executors know how to transfer this currency to your inheritors? Even if your lawyers do understand cryptocurrency, do they possess the keys to access your digital wallets? Not except you share the keys with them. And this is challenging to do so that the keys stay secure and are not shared till after death.
Here, a possible way is to write out a specific plan by hand for passing your digital assets to your inheritors. However, a better approach could be that uses blockchain-registered wills and smart contracts to transfer digital assets automatically. Hence, there is no need for humans to access your wallet keys or do the transfers on your behalf. It is because blockchain does it and takes care of the rest of your final wishes.
The Bottom Line
Well, blockchain will not conquer the real estate industry overnight. However, the outcomes so far show that there is much potential in blockchain for estate procedures and planning. So, do you want to introduce blockchain in your real estate plans? You can count on us at ProofEasy. We will help you with your strategy involving blockchain.