The rise of cryptocurrency has given estate planning attorneys in Miami, FL something new to be concerned about: what are the best practices when leaving your digital investments to your heirs? Too many people have belatedly found out that their loved ones have died with Bitcoin and other cryptocurrency, now worth millions, with no way to access it. Alternatively, they may never realize that the deceased owned any cryptocurrency at all. Whether you’re a seasoned cryptocurrency investor or just dabbling, it’s important to work with an estate planning attorney. Don’t risk letting your investments languish in inaccessibility.
Put your cryptocurrency and digital wallets in your will
The first thing you’ll need to do is list what kind of cryptocurrency and digital wallets you own. Not only will this alert your heirs that you own the asset, but it ensures it will go to the people you intended.
Usually, when you fail to list tangible personal property, like personal possessions, jewelry, clothing and various accounts, there’s an associated paper trail. Your executor and/or heirs are often able to find that you owned the property and where it came from. Cryptocurrency is different, since there’s usually no paper trail. Your heirs may not realize it existed.
The same thing applies to digital wallets, especially if they’re device specific. Make sure you list which devices they’ll need in order to access your cryptocurrency.
Include important access information
Once you list your cryptocurrency and digital wallets, you’ll need to ensure your heirs are able to access them. However, since wills become part of the public record when they go through probate, you don’t want to list passwords, websites and other sensitive information in the will itself.
With this in mind, your estate planning attorney can help you draw up a separate memorandum to hold access information. The memorandum won’t be part of your will, so it won’t become part of the public record. However, it will be referenced in the will and updated as necessary, so your heirs will know where to look for this key information. Be sure to let your heirs know where to find the memorandum, since they won’t be able to ask you by the time they read the will.
Alternatively, you can place your cryptocurrency in trust, which will protect your privacy. Trusts do not become part of the public record.
Consider leaving instructions for your loved ones
There are a lot of people who don’t understand cryptocurrency, what it is or how to access it. If your loved ones are less than technologically savvy, consider leaving them access instructions within the memorandum, or in another separate document. Make sure to test the instructions out by running through them exactly as written. If it works, you’re good to go—but if not, you’ll quickly discover which sections are missing.
For help with your cryptocurrency estate planning in Miami, FL, call Ruben J. Padron, PA today. We can help you put together a private, accessible will, trust or other estate plan.
Categorised in: Estate Planning