Pamela Morgan ~ Building a Cryptoasset Inheritance Plan Empowered Law

foreign [Music] do is give me attribution and share a like what that means is you cannot take my work and commercialize it and keep it private why because that would be that would mean that you're a jerk and you would never do that because we are building on open source software here and i believe that we need to share knowledge so that we can grow our industry so that's what cc by sa means and you can find me at empowered law or on crypto twitter at pamela jd get it i know some nerd humor some lawyer nerd humor you're welcome um so today i'm here to talk to you obviously about estate planning we're going to cover some common misconceptions about estate planning we're going to i'm going to teach you how to start building your own plan today and then we're going to talk about the thing that we have to talk about which is why smart contracts are not a good solution for inheritance planning today let me just say right now i am not a luddite i don't think that um smart contracts will never be good for inheritance planning i just think that right now they actually create far more problems than they solve and i'm going to talk to you about why and if you want to convince me otherwise i'm always open for conversation i've written a book called crypto asset inheritance planning it is available on amazon in paperback uh ebook and audiobook so uh for those of you who know stephanie murphy from the let's talk bitcoin podcast she's a voice actress and she has this beautiful velvety voice and she will walk you through the ins and outs of inst of inheritance planning uh with the audiobook um if you buy the paperback you also get the ebook for free if you get the audio book you get the ebook for free you can get that at bitly crypto inheritance all right i'm sorry to tell you but there is a quiz i did not put that in the description because i knew that none of you would come so all right ready if you die without a will sometimes it's called a testament or a trust who decides who gets your assets so a you have no idea you've never thought about it okay good there's some honesty there um how about who thinks your family decides yeah and most people actually think that most people think that their family decides but the reality is see the government through local law yes so in pretty much every single jurisdiction in the world um there are default laws there are laws that apply if you don't do anything um i wrote an article about this called aerial 11 default law and the idea is if you use if you how many of you guys use have ever used google docs yeah okay great so when you open google docs and you do a new document do you know what font it is it's ariel 11 okay it's ariel point 11. so if you don't like ariel 11 you're free to use comic sans till your heart's content you're free to change it to 18 point you're free to do whatever you want to do the thing is is you have to make an affirmative choice and often the law is the same way so if you fail to make an affirmative choice if you fail to say what you want you're going to get ariel 11. and ariel 11 for wills for trusts for succession is not what you think it is so next quiz question um who do you think who will get part of your estate if you die without a plan um your living domestic partner no your children through marriage no your best friend nope how about political cause charity 8th denver nope nobody the answer is none of the above and the reason is because these default laws are based upon decades sometimes century-old concepts where the only things that mattered were relations by blood but the reality is today we have family by choice many of us have family by choice many of us you know love our families but we also have other people who are really really important to us we have other people we have other causes that we might actually want to donate to that we might actually want to be able to have something and if that's you if you want some of your assets after you die to go to any of these people if you want to support your dog your pet your cat if you want any of these things to happen you have to write a will you have to do something otherwise you're stuck with ariel 11. all right this is my favorite question of the whole presentation currently your in your inheritance plan consists of a friend who knows your password ah there's some honesty in the room thank you very much um okay how about your family remembering what you've told them and a sticky note ah the vast majority yes very good okay and see my personal favorite the immortality plan yeah double arms up on that yes the immortality plan most of you i did a poll on twitter about this you guys i think it was 60 something percent are banking on immortality uh so just in the event not that i'm wishing this on you but just in the event that maybe the immortality plan isn't the best idea um how many of you are have a detailed documented and tested inheritance plan one two very good and a half that was like a sort of um so what i want to do today is talk to you about how to get started how to get started for free how to get started this week and how to get started and start on this process so that things can happen the way that you want them to and not allow you to be stuck with ariel 11. i think it's really important for you to understand that planning puts you in control those of us who are in this industry i'm going to make a gross generalization here but um many of us like control that's kind of why we like the idea of controlling our own money and we're we really like freedom and so taking the time to make a plan puts you in control you need both a legal plan and a tech plan you need an access plan you must have both one without the other will cause problems so um here are some mistaken beliefs these are the most common pushback i hear when i talk to people about planning because i'm always like asking people like hey why don't you have a plan yet and here's what i hear back um i'll have to hire a lawyer no i don't want to hire a lawyer okay newsflash lawyers don't want to hire lawyers okay we know but you actually don't have to hire a lawyer to get started on your crypto asset estate plan and i'm going to teach you how to do that today um most lawyers cannot actually help you with the access or the technical plan i'm one of the few lawyers in the space who understands key management and and cares a lot about key management i've been working on key management issues since early 2014.

but there are very very few of us so and you don't need a lawyer to help do your access plan you need your lawyer to help you do your legal plan you need your lawyer to understand the access plan but you don't need your lawyer to understand how to actually use keys second most common uh mistaken belief is that you'll have to trust a third party so most of the time when i talk about um when i say like hey you guys should make an inheritance plan they're like i'm not giving my keys to anyone i'm like no no no no that is not what i'm asking you to do um i would never give my keys to a single third party and i would never suggest that you do that it's absolutely unsafe and you don't have to if you if you plan appropriately um also people think that there's an increased risk of theft so they're like if i write down everything someone is gonna break into my house and they're gonna find my treasure map and they're gonna steal all of my coins right um again the likelihood of that happening in comparison to the likelihood of you losing your assets um or the likelihood of your family not being able to access your assets if you don't make a plan uh it's it's well offset also you will not be writing a plan that has dear family here are my keys here are my seed words here is everywhere you need to go here are all of my passphrases here's my 2fa here's how you log into my computer here's how you log into my phone you would not do that okay and you certainly wouldn't do that digitally you would not write that on your computer right you don't want to make something that's here here because we can't protect information once it becomes data once it's online um finally i hear the argument that the value is too low to plan they're like yeah i should probably do it but i don't really have that much and let me just point you all to how many of you have been into these crypto assets since 2017. yeah so you remember you remember the all-time highs you remember the run-ups you remember like whoa what is happening here and so while today you might think like ah the value's not you know enough to actually make a plan the reality is that you don't know when the value is going to skyrocket again you have no control over that and you also have no control over when something happens to you so better to do it now it doesn't take a lot it takes some time but it doesn't take a ton of money and i think if you're actually holding these assets now it's a good idea to make a plan so all of those things all of those excuses all those reasons why people don't plan um i think are an illusion i think the reality is that people don't want to think about their own death and which is why i'm so shocked you all are here today and i'm so grateful that you came to talk about this topic with me um you know we have this idea that like thinking about your own death sucks okay no one wants to do it um and so that prevents us from actually taking these sorts of things seriously so i'd like you to take a look at this picture how many of you see a duck raise your hand how many of you see a rabbit how many of you now see duck bunny so the reason that this is in here is to help you recognize that things can be two things at once you can you know you can estate planning can be hey i'm thinking about my own death but it doesn't have to just be that it can be duck bunny it can be something more than that it can be fun so i'm going to give you three different ways to think about estate planning in a way that hopefully will help you overcome that hurdle so first of all you can think of this as giving your family or your loved ones an awesome gift okay think right now if someone gave you the amount of crypto assets you had just as a gift out of the blue you're pretty happy right so imagine that you're actually giving a gift this is a way that you can provide a nice a nice gift for your family for your loved ones for a charity if you don't like that you can think of it as a security makeover because when you're doing your crypto asset inheritance plan you need to go through and make sure that you have your backups you need to know where your backups are you need to test them and make sure that you can actually use those seed words to get back into your wallets a lot of times this also allows you to consolidate when i was first doing my inheritance plan um i was like all right i need to list all my assets and i forgot that i had a colored coin wallet that was like i had not used since 2014 and i was like oh i had no idea i even had this i had totally forgotten and so i was able to consolidate that and sweep it into a wallet that i actually use if i hadn't done that there's no way my family would have gotten it how could they they didn't even know it existed i didn't even know it existed until i actually sat down and gave it some thought and so i was able to get value that i wouldn't have otherwise gotten now for me today so it's not just about planning for your heirs and your loved ones it's also about making your holdings better and safer today this is my favorite one the time machine mission so if you're a gamer you want to think about this in a different way you don't have to think about it as as you're dying you can think about it as a time machine mission where you're coming back in time and you're creating a plan for yourself that you can execute when you come back from the future any way that you decide to look at it i don't care what i do care about is that you actually do something and that's the biggest hurdle so where do you start um i have two resources that are published one of them is an inventory and one of them is a letter to loved ones these are free they are available for you to use you can find them at empoweredlaw.com and you can take them and make them your own so edit them liberally put whatever you want to put in them and it walks you through the process of some preliminary estate planning stuff it's important for you to know that perfection is an illusion there is no such thing as a hundred percent security there is no such thing as a perfect estate plan that will allow your heirs to access every single asset from now until the future but something today is better than nothing today so what you're going to do is you're going to start planning today and then you can make your plans better and better and better this is one of the most important things i'm going to tell you today your loved ones do not have your technical knowledge or ability they don't so the thing about inheritance planning is a lot of times people want to write a detailed instruction manual to their loved ones right they're like okay now what you do is you go in and you find my treasure and then you put in the pin and then you effectuate a transfer from here to here and what happens this your family this is what you think they do and this is what they tell you they do right because they want you to stop talking about it okay they want you to stop trying to explain it this is how they actually feel they don't get it and even if they nod and smile oh yeah yeah yeah no okay the only way that you can be sure that they got it is to do a dry run have them pretend like you're there you don't answer any questions and you have them actually follow your plan and you will see where they get stuck um so it's really important for you not to put the pressure of having them have to have technical knowledge in order to in order to access your assets so how do you do this well you start i think it's easiest to start with a letter to your loved ones and i literally have a template that starts and says dear loved one if you're reading this it means that i have crypto assets and i want you to know that i do um please be careful because third parties can steal these assets from you and it goes on and the first thing that i usually have people do is identify helpers identify someone or someone's that you know in the community that you trust that can be there to help guide your heirs through the recovery process you're not giving these people your keys you're giving your family their contact information so that they can say listen i'm in grief my loved ones died you know my loved one can you help us can you oversee the process of getting these assets back it's much better to identify helpers because if you don't they will they have to so where are they going to go to find a helper reddit twitter your local meetup group and who might offer to help them someone who doesn't actually have their best interest in mind someone who decides that this is an advantage for them and they want to steal all the money and good luck with your family trying to now have a lawsuit to recover those assets so it's much better if you identify a few people that can help your family through the process you'll also notice that the templates are available in english and spanish one of the things that we sometimes forget is that this is a global movement and we have people all around the world and so i try to share my work in as many languages as possible and i'm working on that this year one of the main things you want to do is make sure that your loved ones are going to keep the keys so think about where your keys are right now do you have keys on your phone do you have keys on your laptop do you have keys in a safe deposit box where are you holding your keys and you want to make sure that your family's not like oh pamela's passed away let me donate her laptop to this cause and you know maybe god forbid there was a fire or something and i lost my backups and and the laptop is the only way that you can access my crypto right so you want to make sure and think about things like um redundancy you want to make sure and think about where you're going to store your seeds and how many backups you have and making sure that they're secure and available um so you can do this also using a cryptocurrency inventory some people like things to be a little bit more wordy some people like things to be more table driven right very clear so the cryptocurrency inventory sheet is just an alternative to the letter to loved ones that will help your loved ones if you feel more comfortable using the inventory sheet and it will you will stay in it i use my laptop and my tresor and my crypto to use my to access my eth and that's enough to allow someone who has the technical ability to help your loved ones access those assets so long as they have the keys that make sense okay good so with these two things with your cryptocurrency inventory and your letter to loved ones you basically have done the first section of my book called crypto asset inheritance planning the next three sections are how to make those things better so for example um maybe right now you're storing your crypto on a single seed with no passphrase well that's fine but you can do better maybe you want to use multi-sig maybe you want to use an advanced security feature like a passphrase with your hardware wallet also i'm very excited in case you guys don't know satoshi labs who are the people who make the tres our hardware wallet have a slip proposal slip 39 which is attempting to standardize this the shamir secret sharing implementation for those of you who don't know what shamir says it's basically and i'm not a crypt i'm not a cryptographer please don't hold me to the to the perfect definition but basically what happens is you take one secret and you can split it into sections and you can set a quorum where you need x number of sections to recreate the secret okay unlike multi-signature with multi-signature you set you lock your funds to for example three keys and then you need two out of the three with this you take a single secret and split it off into shares now this is really really exciting for us uh who are interested in key management and interested in succession planning because it allows us to add an extra layer of security the problem is that it's not standardized and so what happens is if you're using a shimmery secret sharing implementation that you did not write you do not know what it will do and you will also need that same exact software to recreate the secret which is dangerous so you don't want to do that so there are a lot of things that you can do to make your security better to make your resiliency better you can look at things like geographic diversity where a lot of people store their seeds just in their home in a safe right you want to make sure you protect them against water damage and fire damage and things like that but then some people go to the next step so they say okay i want to if there's a natural disaster in my area that prevents me from getting this maybe you want to have a backup a hundred miles away 200 miles away sometimes people put backups in other countries it really depends on you your situation your family and what risks you're trying to hedge against but the good news is you don't have to do any of that to get started today the next section after you make it better in the book is is making it legal and it's not what you think this part of the book i actually teach you how to find a lawyer how to keep your costs down how to fire a lawyer you can imagine it's wildly popular with my colleagues but i empower you to do what you need to do with your lawyer but to go in as a knowledgeable and educated person you do not want to go there and ask them to do google research for you it's super expensive so i teach you what you need to know before you go into their office so that you can make things snappy fast and hopefully less expensive and also empower them to do their job which is to help you create the best plan that they can for you and finally keeping it fresh so the thing about inheritance planning is you guys you can't set it and forget it you can't just do this once it's got to be something that you do every so often um and and so usually for my recommendation is once a year you should go and take a quick look what you want to look for is if anything has changed major in your life birth death change of a job moved if you have if you're using different wallets if you've moved from a trezor to a ledger if you've changed something major you want to take that time to go through and update your plan um it doesn't have to take a lot of time you can do it in 30 minutes or less and that way you can make sure that your plan is fresh and that your family can actually use it all right we're almost done let's talk about my favorite topics uh the dead man switch how many of you know what a dead man switch is okay good um basically a dead man switch is the concept that i can i can put a secret something that i want someone to know in the future into a dead man switch system often this is an email okay often it's an email program that will allow you to write an email and then send it to someone in the future if something happens so how this works is i would have to check in with my dead man switch every month and if i don't send an email to this service then they will send my secret to my pre-designated person does that make sense sounds awesome doesn't it it's like yes i don't have to do any of this estate planning i can just put my secret in there i just check in everything's awesome all right how many problems are there with this so many okay first of all you have to trust the people who wrote this dead man switch that they're not going to steal your secret right secondly spam spam filters so many of these solutions not just dead man switches but these smart contract inheritance platforms rely on the concept of sending your loved ones an unsolicited email um except their email servers are configured to not allow that to happen right um so you also have to think about your family grieving you don't think about it for long because it's kind of sad but think about their mental state when they're they've lost you now they get an email from some unsolicited organization that says hey you've inherited cryptocurrency i understand that you have a loss are they clicking on that link i hope not hopefully you guys have taught them not to right uh so you know there are a lot of problems with this relying on this goes back to the idea that your loved ones do not have the same technical knowledge that you do so you cannot impute your technical knowledge on them they are not going to want to go searching their spam filter to find a message from some dead man switch that gives them a cryptic message or worse yet your keys and then they have no idea what to do with it okay so dead man switches really really don't work also if it's a secret that you really want to keep secret you probably don't want to take a secret that is in this world and put it into the digital realm why because we can't keep digital data safe right we cannot keep secrets safe online once it's data it's subject to hacks i'm not a big fan of smart contracts for estate planning and the reason is because i believe that today they will result in lost and stolen assets and lawsuits there are three primary reasons why i don't think that these platforms are ready for us and that we're not ready for them first of all the problem with inheritance and crypto assets is not distribution we know how to take value from one key and put it to another key and we can do that automatically that is not the problem that's the problem that many of these platforms are trying to solve but that's not the actual problem that we have the real problem that we have here is that we have people involved and when you have people involved in the process an automatic transfer of assets from me to my best friend means lawsuit why does it mean lawsuit means lawsuit because my best friend is not legally entitled to those assets and so what happens is even if someone thinks that they're beyond the legal jurisdiction which i hear often your family members are not and your family members are not going to buy into that especially if they think that they're losing out on money okay they will go to the courts because that's what non-crypto people do they avail themselves of local courts so the problem is is people the problem is who thinks they should get these assets and does that comply with what your smart contract program actually does the second and i would argue even bigger problem but smart contracts don't make things easier in these platforms most of them require you to take a key and they transfer value to another key yes who created that key who has the backup to that key oh the centralized provider isn't that nice of them to prov or you oh great okay so what let's just play this out let's walk down the road as if this was going to happen so you create your crypto asset key and you give that key to your loved one and you say listen you need to hold on to this because at some point in the future there's going to be value magically transferred to it and they're going to go okay they have no idea what you're saying okay now we have to rely on them to keep that key safe we have to rely on them them who don't actually use crypto assets to make sure that they know where the backups are that they have access to them and that they will have access to them when the time comes for me the biggest problem is the key generation right it's not safe for you to generate keys for other people we really really need people to be generating their own keys and understanding that otherwise it can be really unsafe also you have to keep up with the network okay you have to keep up with all the updates because if you start using these platforms and locking your value and there's a major uh hard fork where you don't have backward compatible um contracts then you can end up with a problem where your funds can be locked permanently finally i'm not a big fan of trusting a single third party and in my view when we trust platforms like this we're trusting not a bank not a lawyer but we're trusting the developers and we're trusting the network to to be able to anticipate all of the things that might happen with our inheritance plans finally um unlike a lot of things that we're doing most things that we're doing with with crypto assets right now involve instantaneous uh value transfer right so we're doing short term hey i'm going to go to the food truck and they're going to give me food and i'm going to give them tokens right awesome that's easy that's a great application you can do that today the thing about inheritance planning is this is a long game once you lock your assets in these these things have to be good they have to be work for our heirs for decades to come so i want you to take one second and think about think about the ethereum network in 2020 what's happening what's happening do we have sharding yet where are we at are we are we at proof of stake now think about the network in 10 years 2029 what's happening 2039 2049 2100 can the smart contracts that you're writing for your inheritance plans today sustain whatever is going to happen in the network for these sorts of long-term plannings no they can't because we don't know what's going to happen right so we're just early it doesn't mean never it just means we're a little too early in closing humans die crypto assets don't um you can spend 60 minutes if you if you download or take a look at um the letter to loved ones or you take a look at the crypto asset inventory you can get started on this today right now so i want you to do me a favor take your phone out you're like what what speaker wants me to look at my phone i do take a look at your phone however you use reminders to help you do things so if it's a calendar entry if it's a note on your to-do list right now you're at east denver and this is awesome and you might be motivated to do this plan right now but guess what the next speaker is going to come up and they're going to be like yeah you're going to be super excited about that and so i want you to put a reminder in your calendar next week this time come back do your letter to loved ones your family will appreciate it thank you so much for your time and attention do we have time for questions yeah if anyone has questions feel free could you could you come up to the mic so is there um an electronic method of sending keys and stuff that you do trust no there's not one at all it's the easiest question i had no okay no thanks i not not for this purpose right so if you're dealing with someone who is super technically savvy who understands how key management works and they can actually effectuate a secure key transfer those are very few and far between and they're not your heirs probably so in this context for inheritance planning no thank you so much you guys if you have any questions i'm happy to answer them later enjoy the rest of the of the conference