Answer By law4u team
In India, the inheritance of digital assets and cryptocurrencies is a complex legal matter, primarily due to the evolving nature of these assets and the lack of specific laws governing them. However, digital assets and cryptocurrencies can indeed be inherited under certain conditions, subject to existing laws of succession, provided certain steps are followed to ensure that these assets pass to the rightful heirs.
Inheritance of Digital Assets and Cryptocurrencies in India:
Legal Recognition: While cryptocurrencies like Bitcoin and Ethereum are not yet officially recognized as legal tender in India, they are still considered property under Indian law. Therefore, they can be passed on through inheritance like other types of property.
Including Cryptocurrencies in a Will: To ensure that cryptocurrencies and digital assets are inherited according to the owner's wishes, they must be explicitly mentioned in the will. The will should clearly outline how digital assets and cryptocurrencies are to be distributed, specifying the private keys or wallet information needed to access them.
Executor’s Role: The executor of the will is responsible for ensuring that digital assets are properly transferred to the heirs. The executor should have access to the necessary details, such as the private keys or digital wallets, which are required to access the cryptocurrencies.
Succession under Hindu Succession Act/Personal Laws: If the deceased did not leave a will, their digital assets would be inherited according to the personal laws applicable to their religion (Hindu Succession Act for Hindus, or other personal laws for Muslims, Christians, etc.). However, a court order or a succession certificate may be required to claim these assets, especially if the assets are held in a digital wallet that requires specific access credentials.
Challenges in Inheriting Digital Assets: The primary challenge in inheriting digital assets is the secure management of private keys and passwords. Without these keys, it may be impossible for heirs to access the cryptocurrency or digital assets. It is important for individuals to include this information in their estate planning to avoid complications.
Regulatory Landscape: India is still developing a regulatory framework for cryptocurrencies, and while current laws do not prohibit inheriting cryptocurrencies, the situation may change if new regulations are introduced. Therefore, it is important for those owning digital assets to stay updated on legal changes and plan accordingly.
Steps for Heirs to Claim Digital Assets:
Access Information: Heirs must have access to the private keys or credentials needed to access the digital wallets or accounts holding cryptocurrencies. If these details are not provided, they may not be able to claim the assets.
Legal Documentation: Heirs should ensure they have a copy of the death certificate and a valid will (if applicable). In cases of intestate succession (no will), they may need a succession certificate or a court order to claim the assets.
Engage a Lawyer: Due to the complexity of inheriting digital assets, heirs may need to consult a lawyer with expertise in estate planning and cryptocurrency inheritance. The lawyer can guide them on the legal process and ensure all necessary steps are followed.
Example:
If an individual holds a significant amount of Bitcoin in a digital wallet and passes away, the legal heirs can inherit the Bitcoin if the private keys or access credentials are included in the deceased's will. The executor will need to ensure that the wallet is transferred to the heirs as per the instructions in the will. If the private keys are not available, the heirs may face difficulty in accessing the assets.
