What is the Merging Threshold of a protection plan?

The Merging Threshold is the minimum amount of shares needed to complete the merging proces of your protection plan. This number can be lower than the number of chosen beneficiaries, but not higher.

For example, if you choose 5 beneficiaries and choose a Merging Threshold of 3, the merging process can be completed with any 3 out of those 5 shares. In the event that two shareholder are unavailable or unresponsive, their missing share won’t prevent the merging process from proceeding, as long as the minimum number of required shares is met.

How do I choose the Merging Threshold?

Considerations when choosing the Merging Threshold are for example:

Number of beneficiaries.
Beneficiaries’ commitment to your protection plan.
Number of Recovery Shares selected.

What is the risk of setting a Merging Threshold too high?

A Merging Threshold thats is set too high will increase the chance that the minimum amount of shares needed to complete the merging proces is not reached in the event that one or more beneficiaries are unable or unwilling to provide their share. This would result in no access to the secret data.

What is the risk of setting a Merging Threshold too low?

A Merging Threshold that is set too low will increase the chance that beneficiaries can be left out of the process. This would result in a decrease in the planned level of shareholder involvement intended by the plan owner when creating the plan. Also, the selected number of Recovery Shares is important. A low threshold paired with a high number of shares allows for the Merge Authority to merge with minimal involvement from other beneficiaries. Credibility of the Merge Authority is crucial. Click here for more information about Recovery Shares and here for more information about Choosing your Merge Authority.

How can I minimize the risk of a shareholder failing to provide their share?

Carefully choose your beneficiaries: Choose individuals you trust and who understand the importance of their role.
Educate your beneficiaries: Ensure that all beneficiaries are informed about what is required of them and the impact of their participation.
Create a flexibel, but yet secure, share threshold: ****Whenever possible, use a threshold that provide flexibility in case of unresponsive beneficiaries.
Include recovery shares: Include recovery shares in your plan to cover any unexpected situations where shareholder is unavailable.

How can recovery shares help me be flexible with the shares threshold?