Well, Binance founder CZ has suggested a function to be used in binance where one can set up a will and put in a contact to which the coins will be given to after you have passed. Either the coins will be passed to your trusted person if the account is inactive for a specific amount of time or your family can submit a death certificate. This sounds to me a fool proof function. Could there be downsides to this function?
See
here.
The question about if there is a downside has straight answers, there are multiple down side to this, starting from the fact that this is encourages you keeping your coins on the exchange, this defeats the purpose of self custodianship and you “not your keys, not your coins”. Aside leaving your funds on the exchange another scare is the exchange might not even live long, if care is not taken the investor might out live the exchange because it is not immune to been hacked and no body should even bring the SAFU thing up here.
Another thing is binance is a centralized platform just like traditional banks we all know the rigorous protocols family members pass through to get a family inheritance off this platforms and this platforms can even just lock you out of your account or freeze your assets for flimsy excuses like tainted coins getting in. Personally I think the usual time lock of your self custodian wallet is the best thing for inheritance purposes