Wills and Testaments on the Blockchain- Blockchain Estate Planning

13 min readMay 6, 2018

Wills have moved from oral to paper to digital now. But can we also store them on the Blockchain?

1. Overview

The greatest artist of all times — Pablo Picasso[1] — has inspired generations and his influence still remains unparalleled. Through his paintings, that had a voice of their own, he taught us how to follow your passion and leave a mark on the world. When he died in 1973, he left more than 45,000 beautiful works[2] and $250 million in estate.[3] Unfortunately, he did not leave a ‘Will’ which led to six years of continuous bitter negotiations and family feuds.

A Will is a legal document[4] in which a person clearly states who should receive their possessions after they die. Dying without a Will leads to complications as the person is said to have died ‘intestate’. This means that the person’s assets and possessions will be divided according to the state’s legal calculations rather than their own wishes. What is astonishing is that almost 60% of the adults in the UK do not have a legal Will in place.[5] Most people delay their Wills to until they are older while others simply assume they don’t have enough to be passed on. Hence, not having a Will leads to delays, exorbitant expenses and endless family battles.

This paper Will mainly focus on the journey of how Wills first developed to how they are being used in modern day world. The paper will progress into the Digitalised Wills and how the future of Wills is shaping using the decentralised technology of Blockchain. It further talks about how to keep your digital assets as well as physical assets secure using Blockchain-enabled Wills.

2. The Development of Wills

Before Solon[6], the Athenian lawmaker and statesman, introduced the idea of Wills, the property or estate would to go the family of the deceased automatically. Women[7] were not allowed to have Wills and the Will had to be signed by several witnesses. Solon’s idea behind Wills was,

“to bestow it on whom they pleased, esteeming friendship a stronger tie than kindred, and affection than necessity, and thus put every man’s estate in the disposal of the possessor”[8]

In Ancient Rome, Wills were made in Public in presence of seven witnesses. That meant that everyone knew of the person’s intentions and it could not be changed. These were known as nuncupative (or oral) Wills; but the risk of trusting the Will of the deceased to the memory of the living soon abolished these and all Wills were ordered to be in writing.[9]

England started accepting the idea of Wills in the 8th century. Due to lack of literary, early English did not require the Wills to be written in writing. ‘Verba Novissima’[10] which means ‘last words’ became popular i.e. allowing a dying man to state his wishes regarding the distribution of his estate along with any last confessions.[11]

In 1540, the Statute of Wills[12] was put in place by the Parliament of England. Prior to this Act, estate was passed on to the Crown, in case the landowners did not have any competent living relatives. This Act challenged the powerlessness of the landowners by stating that owners had the right to determine who the beneficiaries will be by permitting devise by Will. Growth of literacy enabled the Wills to be written rather than oral.

The Statute of Wills was revised during the American Revolution that gave rise to the Wills Act of 1837. The Wills Act gives the power to every adult to dispose their property as per their wishes. The act extends to testamentary dispositions or gifts as well. The Will under the Act has be to made in writing and signed by witnesses.

Modern Wills[13] follow the amended version of the Wills Act of 1837[14] known as Wills Act 1963. The act ensures the Will is executed in line with law of the state where the testator resided, rather than automatically imposing UK law to all Wills. Modern Wills[15] are usually produced by attorneys on computers, printed out and signed by the testator. The Will has to be signed in the presence of two witnesses who can’t be a part of the Will in order to make sure it is legally acceptable. In order to make any changes in the Will, especially in the UK, a repetition of the whole process is done through an official modification called a ‘Codicil’. [16]

3. Types of Wills

There can be various types of Wills[17] according to the person’s requirements and wishes. The most common types of Wills that are in practice are as follows[18]:

A. Single Will

These Wills are designed for individuals and is one of the most common type of Wills. The Single Wills indicate who will inherit the properly according the deceased’s wishes along with stating the witnesses and executors.[19]

B. Mirror Will

Mirror Wills are mainly designed for couples who wish to write similar Wills. They are two separate Wills which set out identical wishes and hence, mirror each other.

C. Discretionary Trust Will

A type of Trust Will, the discretionary can be written to leave one’s assets or part of the assets to a trust. The Will includes information about the trustees and beneficiaries. Trustees act as executors and can be given total discretion over how and when the potential beneficiaries receive their shares.

D. Property Trust Will

The Property Trust Will allows one to create a Trust that looks after one’s property. This means the Trust can benefit from the property during the lifetime of the person writing the Property Trust Will but at his death, it is passed on to the family of the deceased. This takes care of the long-term care fees of the property.

The most common problem, however, is the falsification and forgery of Wills along with the ease of destroying paper. These include both, forgery of documents by purporting to be a Will as well as forgery of signatures[20]. As Dorothy Leigh Sayers, the renowned English crime writer and poet once said[21],

“There is something about wills which brings out the worst side of human nature. People who under ordinary circumstances are perfectly upright and amiable, go as curly as corkscrews and foam at the mouth, whenever they hear the words ‘I devise and bequeath.”

4. Electronic Wills

The world is now moving to digital. There are more mobile connections than people on the planet. Communications, social and political exchange, commerce, media and entertainment, everything is moving to the digital landscape with society moving to paperless.[22] Wills are now moving into this digital age as well.

Electronic Wills[23] are the new form of digital documentation. These Wills are convenient and cater to the problems faced by paper Wills. Electronic Wills, also called eWills, are secure, quick and legally valid. The clear asset allocation helps avoid misunderstandings and prevent disputes.

State of Nevada[24] in the US is the only state that provided the specific statute for using Electronic Wills. The Nevada Electronic Wills statute requires that a testator’s Will must be “written, created and stored in an electronic record.” It must also contain testator’s online signature. [25]

The Electronic Will[26] has various advantages over the Paper Will. Storing the will is easier and it is very convenient to create the Will. There is also an option to record a video Will that makes it even more credible. Modification of the Will is less of a hassle as compared to the paper Will and it can be changed readily.[27]

However, technology comes with its own drawbacks. Tampering is a big issue when it comes to electronic documentation — be it voting or Wills. There is a greater risk of theft of private information and internet fraud. Hacking is a possibility that cannot be overlooked and hence, in Nevada, to circumvent this, a separate hardcopy of the Will is meant to be printed and left in safe custody.

5. Blockchain enabled Wills

The digital economy, as we know it today, like credit card information and financial records are stored on centralized databases. The inherent nature of these is such that they are opaque and vulnerable to hacking.[28]

Blockchain — the ingenious invention — store information in a decentralized form where information is parceled up in blocks. [29] The data is distributed in the peer-to-peer network giving its access to everyone on the Blockchain.[30] If anyone adds new block to this chain, every one of the network is notified and has a copy. What makes the distributed ledger so attractive is their resistance to modification, transparency and security. Any changes in the transactions are easily flagged by the system. Blockchain does not require third-parties for transactions which reduces financial costs. Blockchain is the technology behind digital currencies which are popularly known s cryptocurrencies are formed on the basis of cryptography.

According to the Wall Street Blockchain Alliance[31], the legal industry is one of the fastest growing sectors when it comes to Blockchain. Blockchain, being un-hackable, makes it attractive for storing information and documents.[32] The ‘Proof of existence’[33] which acts as a public notary that demonstrates data ownership and examines the integrity of the document makes verification easier. Lawyers are freed from trivial tasks and hence, can leverage more time on legal insights. It helps them draft contracts, store data on transactions and make authentication easier. [34]

Comparison between Traditional Will and a Crypto-Will

Crypto-Wills[35] are Wills that are created and documented on Blockchain and one of the latest developments in the Blockchain legal industry. As observed, Crypto-Wills are far more efficient and quicker than traditional Wills. The end-to-end process of the Will administration is carried out by a code-run software that is distributed and decentralized. [36]The Wills are secure than ever given the cryptographic nature of the process and the unique characteristic of immutability. The testator can make a Crypto-Will by listing down the beneficiaries, assets and execution process. Since, everyone on the Blockchain knows about the existence of the Will, it is very pubic and cannot be lost or changed. However, it is also very private in the sense that every beneficiary along with the testator is represented by a crypto-address.[37] Nobody except the beneficiaries will be able to decode the address. If anybody tries to make changes in the Will, everybody on the Blockchain would be notified along with the time and location of the change. Post the testator’s death, the Will or Testament would be executed automatically.[38] The automatic execution makes it very convenient by reducing legal costs and saving time. Since there are no third-parties involved, the likelihood of feuds and conflicts is less.

6. Crypto-Wills for securing digital wealth

Another challenge being faced by people around the world today is — what happens to all the digital wealth when the holder of that currency dies?[39] 1 bitcoin is today worth more than £4800.[40] It is believed that about 4 million bitcoins have been lost forever after the death of their holders. Bitcoins are held in wallets of the internet secured by a public as well as a private key. The encrypted nature of Blockchain makes it secure and inaccessible by anyone except the Bitcoin holder.[41] In case a person dies without sharing their private key, the bitcoins cannot be retrieved, and the cryptocurrency is locked inside. Moreover, Tokenization of assets has become a popular practice. It is a process of converting rights on all of the tangible and intangible assets into digital tokens on the Blockchain. This enables trading ownership rights of assets on a digital platform.[42] Tokenization helps keep the characteristics of assets while enjoying the benefits of cryptocurrency.

This poses as an issue for people who are worried about distributing their online wealth and assets after their death. Crypto-Will brings with itself a unique solution. Given the automatic essence of Wills on Blockchain, the testator can list their bitcoin holdings and private key on their Will. Since the Will is public yet very private, this will not be accessible by anyone except the beneficiaries. Post the demise of the testator, the Will would be executed automatically via Smart Contracts.

Smart Contracts, first introduced by Nick Szabo in 1994, are self-executing contracts[43] that help trade assets, property, shares, cryptocurrency without any third-party. These contracts are transparent and quicker and help reduce transaction costs.[44] The computer-run code will help document, verify and execute the Will along with automatically disposing the real as well as digital wealth of the testator to the mentioned beneficiaries.[45] Every person can create their customized smart contract for the smooth execution of the Will. This prevents losing all the assets held in the form of cryptocurrency and ensure one’s life earnings are successfully transferred to their loved ones.