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In recent years, cryptocurrency has become a popular form of financial investment as investors find high returns. With this increase in wealth, more people investing in cryptocurrency seek to pass these digital forms of currency (e.g., Bitcoin, Litecoin, Ethereum, Ripple, etc.) on to beneficiaries after passing in a will. Including cryptocurrency assets in a will is possible, but it is not as straightforward as adding traditional assets.
Cryptocurrency as an asset differs from traditional assets one might include in his or her estate plan or will. Traditional assets have a physical currency record, such as a bank account. For example, if you were to leave the fiat money in your bank account in your will to a beneficiary, it is typically required that the person handling your estate (your fiduciary) produce an original death certificate and letters testamentary to take control of the bank account once you’ve died.
In the case of cryptocurrency, once you’ve passed, it is not required to show proof of death or power of attorney. Cryptocurrency requires the fiduciary to have the decedent’s passcodes to access and transfer the cryptocurrency account for estate administration purposes. It is essential that you trust who you name as your fiduciary because the fiduciary could use the cryptocurrency passcodes to access and manage your cryptocurrency account with very little oversight.
There are several steps you must take to leave cryptocurrency in your will that are much different than the steps you would take to leave traditional assets.
STEP 1: SECURE AN ATTORNEY
STEP 2: LIST YOUR CRYPTOCURRENCY
STEP 3: LIST YOUR DIGITAL WALLETS
STEP 4: CREATE A MEMORANDUM WITH PASSCODES, PASSWORDS AND PINS
STEP 5: CREATE A CRYPTOCURRENCY ACCESS GUIDE
If your beneficiary doesn’t want or know about cryptocurrency, there are a few options. For one, choose an executor of your estate who is tech-savvy enough to be able to exchange your cryptocurrency investment for fiat money. The executor of your estate can also hire an estate administration attorney to do this exchange.
Second, you can place your digital assets into a trust. It is essential to hire an experienced estate planning law firm, such as The McKenzie Law Firm, to ensure your digital assets are secure when your beneficiaries have to access your investments. As an added layer of security, trusts are not subject to probate, so your sensitive information will be kept out of public record until your beneficiaries access it.
When including cryptocurrency in your will, consult an estate planning lawyer to help. An experienced attorney, like the attorneys at The McKenzie Law Firm, will make sure the provision will include:
There are a few key tips you need to know before and while you list cryptocurrency as an asset in your will:
Adding cryptocurrency as an asset to pass down to a beneficiary in your will is a delicate and technical job and is best accomplished by an attorney well-versed in different types of cryptocurrencies, digital wallets, and exchanges, as well as estate planning and asset protection. This is where The McKenzie Law Firm excels. With the technical education and experience in the cryptocurrency investment landscape and asset protection.
The McKenzie Law Firm can assist you in incorporating your cryptocurrency into your existing will or create a new one with the digital financial and physical assets you would like to pass on.
Contact us today, and one of our experienced attorneys will guide you.
If you think it might be time to think through your estate plan, you can:
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Disclaimer: The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
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