If, after the bankruptcy of FTX, the holders of cryptocurrencies or cryptoassets are immediately more worried about the security of their funds, the question of transmission is gradually entering people’s minds. ” For the moment, we do not have many requests but the number of customers who contact us to ask questions about the transmission of their cryptoassets has increased over the past two years. “, testifies Cédric Pommier, notary in Albertville and president of a commission of the Congress of Notaries of France 2021 dedicated to digital heritage. According to a study by the European Central Bank (ECB) published in May 2022, 4 million French people (6%) own cryptocurrencies, these digital assets which are exchanged via a network of computers called blockchain.
Giving while alive: simplicity and security
” A cryptocurrency is considered an asset, even if it is digital. It is a non-palpable object, but which has a heritage value such as a copyright or a patent. In terms of transmission therefore, cryptocurrencies are subject to the rule of tax exemption and then to taxation at the progressive scale. », Defines Mathieu Fontaine, notary in Saint-Paul-Trois-Châteaux. An individual has the right to give 100,000 euros per child every 15 years without having to pay inheritance tax. Above this amount, donations are progressively taxed. ” For example, between 15,933 and 552,324 euros, a donation is taxed at 20% “says Cédric Pommier.
With regard to tax law, it is preferable to bequeath your cryptos to your children before selling them since “ the donation will make it possible to “purge” the latent capital gain relating to the cryptos given and only the donation rights would be due“, explains Frédéric Poilpré, member of the Cercle des fiscalistes. In other words, if the heirs receive bitcoins, even if their donor had realized a capital gain, the latter would not be accounted for or taxed by the tax authorities. If the heir resells the cryptos later, having himself realized a capital gain, this will then be subject to the single flat-rate deduction of 30%.
If a crypto holder wishes to pass on his assets during his lifetime, notaries recommend doing so within their study. According to them, here’s how to do it: It is necessary for the heirs to open a cryptocurrency account or create a digital wallet. Then, on the day of the transfer, the donor and the beneficiaries determine, with the notary, the value of the portfolio by comparing the price of the cryptoassets on different platforms, then averaging the different prices. This amount is then retained in the deed by the notary, then the donor can transfer these assets from his account to those of his heirs », Explains the Albertville notary. Small downside to this procedure, the usufruct is impossible. In other words, a donor will not be able to transmit his cryptos and continue to have control over them, to buy and sell them as he pleases, while waiting for his death.
If, for classic cryptocurrencies, the estimation and transmission are relatively simple, for NFTs (or non-fungible tokens, property certificates registered on a blockchain), it is more complicated. ” We must find a platform that can estimate the NFT and then the rights holders must all agree on the price “, details Cédric Pommier who recalls “ that there is however the same problem with classic works of art which are difficult to estimate. »
Post-mortem donation: avoid losses or omissions
If the donation during the lifetime of a saver is low risk and quite easy to carry out with the help of a notary, the heirs can have much more difficulty in getting their hands on the crypto-assets of their donor if the latter does not did not organize his estate before his death.
- The case of custody on an exchange
In the event that a donor keeps their coins on an exchange, the heirs can end up with two problems. The latter may not be aware of the account that has been opened by their donor. Traditionally, notaries can find their clients’ bank accounts by searching in the bank account file (Ficoba) and the life insurance contract file (Ficovie) to search for life insurance opened in a French establishment. But to date, no file lists the cryptocurrency accounts opened by French individuals. Be careful to communicate the name of the account to the heirs.
Once the account is found, it’s not going to be easy. There may be obstacles if you cannot communicate with a platform or if it is based abroad and does not recognize the authority of the notary. The simplest thing therefore seems to be for the heirs to know the codes that allow access to their donor’s account. “, advises Mathieu Fontaine.
An organized inheritance after death also carries another risk. “ If there is no will, au death of the holder of the cryptos, these assets will be part of the joint ownership and will fall under the classic rules of management of joint ownership “, warns tax expert Frédéric Poilpré. Each heir will therefore receive an equal share of the portfolio, if it is found. Be careful though, the transfer of a cryptocurrency portfolio from a donor to those of the heirs can be blocked if one of the latter refuses the transfer or if he does not come forward.
- The case of custody on a “decentralized wallet”
In the event that a donor has his cryptocurrencies on a “decentralized wallet”, which can take the appearance of a USB key that allows to send and receive cryptos, the succession must also be well prepared.
Indeed, if this wallet (or the recovery phrase allowing access to it) is not found by the heirs, they will have no way of getting their hands on the cryptocurrencies of their donor. So how can you be sure to pass on these objects?
” The simplest way is for the donor to place a copy of the private key or of the recovery phrase in a safe at his home, in his bank, or to deliver this copy in a sealed envelope to his notary, making what is called a mystical testament recommends Cédric Pommier. A notary has the right to keep the medium (key or phrase allowing access to the portfolio) because “secrecy and confidentiality are preserved as long as the envelope is sealed, we are sure that no one has been able to gain access to the wallet “, justifies the notary of Albertville.
Once the death has occurred, the notary will only need to send the recovery key or phrase to the beneficiaries so that they can connect to their donor’s wallet and share the crypto-assets stored there. ” A mystical will is currently the best way to have security and a guarantee on the transmission of its cryptocurrencies because the notary will keep the envelope in a safe and the client will benefit from a notarial guarantee in the event of a problem. “, believes Mathieu Fontaine. A solution that combines security and which prevents a priori from suffering the blocking or loss of its funds in the event of the bankruptcy of its exchange platform, like the one just suffered by FTX. A solution which is still not without risk and which pushes notaries “to think about innovations that would make it possible to overcome all the transmission problems that we encounter today”, concludes Mathieu Fontaine.