“Death isn’t what it used to be. Write a will, put stock certificates and the deed to your home and a few other pieces of paper in a safe deposit box and you were set for life for the hereafter.”
Estate planning must now include intangible assets that didn’t exist just a few years ago, as well as those that have been around since people started owning private property. Today, says Forbes in the article “Estate Planning for Crypto And Other Digital Assets: What You Need to Know,” there are new kinds of property and new laws that govern them.
Some of the old rules still apply and you need a will. One of the things in that will, needs to be naming an executor who will be in charge of ensuring that your assets are distributed, according to the wishes you state in your will. When it comes to digital assets, things get a little tricky.
The hardest part of digital assets for many people, is how to give access to your digital property. The law has changed. If you own cryptocurrency, you’ll need to list your “crypto keys,” so your executor and heirs can know what is in your estate and be able to access it.
You may need to educate them so they understand what the assets are, the location of the keys and access control that you use for security. You probably know access control as PINS, passphrases, multisignature or timeclock requirements.
The challenge is, if you die and no one has access to your cryptocurrency keys, your heirs may never be able to access them. They’ll need to know what exchanges you use (Bitcoin, Ethereum, and others) and a list of the digital wallets you own for each.
Most heirs want to sell the crypto property quickly since the currency is volatile. No one wants to be criticized for losing substantive value in the estate because they didn’t move quickly enough. They also don’t want to be brought to court, for failing to look out for the fiduciary interests of the estate.
You’ll need both the proper legal planning and technical planning.
Most states with laws about digital assets have adopted a model that was written to include things that have not been invented yet.
Electronic signatures on wills is another digital issue entering the estate planning arena. Most estate planning attorneys are not enthusiastic about this. However, the change is coming, says an attorney on the drafting committee of the Uniform Law Commission.
National College of Probate Judges President Tamara Curry says she expects that judges are going to have to get up to speed on crypto assets in the next three to five years, since courts will become inundated with estates that include crypto currency and other digital assets.
For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Resource: Forbes (Aug. 14, 2018) “Estate Planning for Crypto And Other Digital Assets: What You Need to Know”