Consider your digital assets. At this point, almost everyone has some. It may be pictures stored electronically, your social media accounts, or it may even contain something like cryptocurrency. Cryptocurrency, in particular, is a more recent phenomenon, but its presence persists and it continues to gain in more widespread appeal. A larger swath of the population seems to be investing in cryptocurrency. Due to the significant investment, some people are making in these digital assets, and because of crypto’s unique properties, we hope these same people are remembering to include provisions for cryptocurrency when estate planning.
Remember Your Cryptocurrency When Estate Planning
When you think cryptocurrency, Bitcoin may come to mind. After all, Bitcoin is one of the most prominent and popular cryptocurrencies out there, but there are many others on the market as well. Regardless of what type of cryptocurrency you hold, you will want to account for this digital asset in your estate plan. This is especially important when you think of the fact that cryptocurrencies are vastly different from other financial investment accounts. There is no central regulatory authority for crypto. The ownership or title for cryptocurrency is not registered and ownership is not regulated. Cryptocurrency information is distributed over many different location as part of the blockchain technology. This means that, if you do not detail what holdings you have, where to find them, and how to access them, your heirs may very well be completely unaware of its existence or how to get ahold of the crypto you left behind.
To help ensure that your cryptocurrency is not lost to the digital void and that it is properly transferred to your heirs upon your passing, there are steps you will need to take while estate planning that you will not necessarily have to do for other asset types. For starters, you will want to write down a list of your cryptocurrency holdings. This list should also include where they are held and how to access them. Consider, for security purposes, handwriting this list and avoiding the creation of a digital file which could be hacked. Place the list in a secure, but accessible place and inform the person who will act as a personal representative of your estate about the document’s location. Specify who should inherit your crypto. You should also assign digital powers to your personal representative so they can access and manage your crypto.
Empowering another to access your cryptocurrency can be tricky. Crypto is held in digital wallets accessible only by private key or password. This entry code is crucial and, without it, your personal representative or heirs will likely never be able to access your holdings once you pass away. Additionally, there is the Revised Uniform Fiduciary Access to Digital Assets Act. This federal law makes it illegal to long into the account of a deceased individual. You and your personal representative need to be aware of the different policies various cryptocurrency exchanges have regarding access the holdings of a deceased crypto holder. Some require a will and a death certificate as well as other documentation before crypto can be accessed and transferred.