How To Ensure That Your Heirs Inherit Your Cryptocurrency
One of the most valuable things a person can lose is the digital key to a cryptocurrency wallet. Bitcoin and its imitators appeared on the scene quickly a little more than a decade ago, and no one is really sure how much money their owners have gained and lost through cryptocurrency investments. A recent report by Kiplinger estimates that billions of dollars of digital currency assets have disappeared into thin air as a result of their owners dying without anyone knowing the digital key to access them or without anyone except the decedent even knowing that the cryptocurrency accounts even existed. Today, the cryptocurrency financial system has taken measures to protect the privacy and security of the accounts while also leaving enough of a paper trail to protect the heirs to crypto fortunes from losing out on their inheritance. If you own cryptocurrency, a Tampa estate planning attorney can help you ensure that the designated beneficiaries can inherit it after you die.
Keep Your Digital Key in a Safe Place
You have probably heard the horror stories about a Bitcoin millionaire who wrote his digital key on a piece of paper, and then his widow threw it away, not knowing what it was, or about the one who never wrote down his digital key at all. You know that you have to make it possible for someone to get your digital key at the right time, but not before. These are some safe ways to store your digital key to ensure safe passage of your crypto assets:
- Keep your digital key in a Coinbase vault. Include instructions in your will that the personal representative should have access to it after you die.
- Use a password manager such as Dashlane, Keeper, or LastPass that will safely convey the digital key to your family at the right time.
- Every year, write a draft of an email to the personal representative, including the digital key, but don’t send it. If you are still alive at the end of the year, cancel the sending of the email and repeat the process the next year.
Can Digital Currencies Be Non-Probate Assets?
Like most other assets, cryptocurrencies become part of your estate subject to probate, and when your estate settles, they become the property of the beneficiary or beneficiaries listed in your will. Skillful estate planning lawyers can convert many assets into non-probate assets; one popular way to do this is to place the assets in a trust. It has recently become possible to designate cryptocurrency wallets as trust accounts. Placing any kinds of assets in a trust, even if it is just boring old Benjamins and real estate, is complicated enough that you should not attempt to do it without a lawyer’s help. This is especially true when the asset in question is cryptocurrency.
Contact David Toback With Questions About Estate Planning in the Digital Age
A Central Florida estate planning lawyer can help you transfer your cryptocurrency holdings to the intended beneficiaries of your estate. Contact David Toback in Tampa, Florida to set up a consultation.
Source:
kiplinger.com/investing/what-happens-to-your-bitcoin-when-you-die
