Imagine accidentally throwing away $700 million. This nightmare scenario has become a reality for James Howells, a computer engineer from Wales, who has now spent more than a decade fighting to recover a discarded hard drive containing the private key to his Bitcoin fortune.
Here is what happened. In 2013, Howells mistakenly discarded a hard drive during an office cleanup. What he did not realize until too late was that this particular drive contained the only copy of his private key to access 8,000 Bitcoin (BTC) he had mined years earlier. When he realized his error months later, the cryptocurrency had already skyrocketed in value. Today, those 8,000 BTC would be worth approximately $700 million, and as much as $848,000,000 at the BTC all-time high thus far. It’s very likely that Howells’ lost BTC could be worth over $1 billion at some point.
For over a decade, Howells has tried everything to recover his lost fortune – begging local officials for permission to search the landfill, offering to share the recovered BTC with the city, taking his case to court, and even proposing to buy the entire landfill. Despite these efforts, the Newport City Council has consistently refused his requests, and British courts have ruled against him, stating there is "no realistic prospect of success." As this article is being published, Howell has said he will file a case with the European Convention on Human Rights.
This cautionary tale highlights a crucial lesson not just for those who owns digital currency, but for everyone: If you don’t know what you own, where it is, and how to find it, your assets could be lost when you die. Especially if you have digital assets, losing what you have can be a catastrophic, unrecoverable loss. Digital assets are especially vulnerable to loss if they aren’t inventoried and included with your estate plan.
The Modern Challenge of Asset Tracking
While most of us will not lose hundreds of millions in cryptocurrency, many people face similar challenges on a smaller scale. Our assets are increasingly scattered and less tangible in today's digital world. It is important to note that while some of these digital assets are financial, others that might be even more important to us are of a more personal nature.
For instance, you may have:
- Cryptocurrency in various digital wallets
- Digital photos and personal archives stored across multiple cloud services
- Online financial accounts with different institutions
- Insurance policies that are accessed through your employer’s online benefits platform
- Some frequent flyer miles and reward points cam be left to heirs
How are you keeping track of these assets? Are you sure you know exactly what you have and where it is? Howells was not.
Now think about this: If Howells could lose an extremely valuable asset while he’s alive, how will your loved ones know where your assets are after you’re gone? In other words, how will they even know what you have? If you do not know the answer, the implications for your loved ones can be considerable.
The Real Consequences of Poor Asset Tracking
Across the U.S., approximately $60 billion in known assets have been lost or forgotten about. Bank accounts, insurance policies, retirement funds, and other financial assets regularly become "lost" when people move, change contact information, or simply forget about accounts. And that doesn’t even count the billions or, one day, trillions of lost digital assets that are not yet being tracked as lost.
If you do not have an up-to-date inventory of all your assets, here is what is likely to happen:
- Assets may be permanently lost or forgotten
- Your loved ones may never even know these resources existed
- Court processes like probate become longer and more expensive
- Family conflict can arise when assets are discovered later
- Digital assets may become inaccessible without proper password management
- Sentimental items might be discarded or lost during transitions
While it is possible some of your assets could end up in a landfill like Howells’ BTC hard drive, what’s more likely to happen is they get turned over to the government. Each state has a Department of Unclaimed Property for this . And for you or your loved ones to recover the lost asset, you have to go through a process of reclaiming that property that is time-consuming, tedious and may even be unsuccessful (if your loved ones even know where to look to find out about the asset).
I've seen families devastated not just by the financial impact of lost assets but by the emotional toll when meaningful items disappear or become inaccessible after a loved one's passing. This happens if a person has no estate plan, an outdated estate plan, or a plan that’s just a set of legal documents. There is a better way.
The Life & Legacy Planning Solution
The traditional way to do estate planning, the way most people know, is to draft a will, financial power of attorney, health care power of attorney, and maybe a trust. Then, you “set it and forget it,” storing your documents in a drawer and never looking at them again. When “planning” is done this way, it often results in court cases, conflict, lost assets, and even irreparably broken relationships among those you love most.
This is why our planning includes a comprehensive asset inventory as a foundational element. Here are just a few highlights of the Life & Legacy Planning process:
Personal Resource Map
From the get-go, we help you create a detailed inventory of everything you own – from real estate and bank accounts to digital assets and family heirlooms. This comprehensive map ensures nothing is overlooked or forgotten. I believe this is so important that I will give you the resources to do this whether you decide to work with me or not.
Regular Reviews and Updates
Life changes, and so do your assets and our family situation. Our process includes regular reviews to ensure your inventory stays current as you acquire new assets or sell existing ones.
Secure Documentation
We can advise you on secure systems for documenting access information for your digital assets, ensuring your designated representatives can access what they need when the time comes.
Clear Communication Plan
Our legal team guides you in communicating with loved ones about what you have and where it is located, without compromising security during your lifetime. We can also help your loved ones after you are gone.
Peace of Mind in a Complex World
James Howells' story is extreme but serves as a powerful reminder that in today's complex world, knowing what you have and ensuring it's properly documented is more important than ever.
As your trusted estate planning team, we do not just draft documents; I assist you in making informed and empowered decisions about your life and legacy for yourself and the people you love. That is why I offer a Life & Legacy Planning® Session, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love.
Complete our contact form or call us at 803-358-7214 to schedule your time today:
This article is a service of Stratton and Reynolds. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session, during which you will get more financially organized than you have ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
