Increasingly, people are addressing and including digital or virtual assets in their estate plan, which can be critical. Overlooking these components can have costly, inconvenient consequences when the time comes to settle a person’s affairs.
For instance, if you fail to disclose ownership of cryptocurrency in your estate plan, then it is possible that the money will remain undiscovered and essentially worthless.
Addressing cryptocurrency in your estate plan
Bitcoin, Ethereum and Litecoin are just a few of the virtual currencies gaining popularity, and if you own any of these or other types of cryptocurrency, you would be wise to disclose that information when creating your estate plan.
You will also want to make it possible for at least one person to access the currencies. A person needs to know what kind of currency it is, where to find it, and how to login to an account to manage the currency.
If you have specific goals for your cryptocurrency, you will also want to specify those in your estate plan. Should it be distributed to your heirs? Do you want it held in a trust?
Things to consider
Before you make any decisions about cryptocurrency in your estate plan, you should consider at least a couple important issues.
First, cryptocurrency can be very confusing and intimidating to people unfamiliar with encrypted digital money. It may not be wise to leave management of it in the hands of someone who doesn’t understand it. Instead, consider assigning the task to a tech-savvy person who is more likely to manage it properly.
Second, remember that the value of virtual currency is incredibly volatile. No one knows for sure if it will replace traditional money or if it is a bubble about to burst, and the currency you have now could be worth far more or far less in the future. This is something you will certainly want to keep in mind when deciding how to distribute it.
Securing real protection for digital assets
If you have virtual currency or any other digital assets, be sure that you discuss them with your attorney when you are creating or updating your estate plan. Doing so can help you decide what to do with these complicated assets and how to protect them in the future.