Like many, you may have recently ventured into cryptocurrency. AS a digital currency operating independently of central authorities like governments or financial institutions, cryptocurrency is an intangible and autonomous asset. Understandably, you may have concerns about its fate should you pass away or become incapacitated. If this is a key worry for you, please continue reading as we explore how to incorporate cryptocurrency into your estate plan and how a skilled Rockland County Estate Planning Attorney can provide effective assistance.
How Do I Incorporate Cryptocurrency in My NY Estate Plan?
Given the unique attributes of cryptocurrency, meticulous estate planning is often required. The first step you should take is creating a detailed list of all of your cryptocurrency holdings. It’s crucial to maintain an up-to-date inventory through regular updates, as the cryptocurrency landscape changes quickly. Next, you should securely store and document your private keys. It’s important to ensure that your executor or personal representative knows where to locate information and understands its significance.
You should craft a Last Will and Testament and provide clear instructions on how to access and transfer your cryptocurrency assets. This includes passwords, PINs, recovery phrases, and any other necessary credentials for retrieval. Another option is establishing a revocable living trust. In this arrangement, a trustee would oversee and distribute your cryptocurrency holdings following your specific directions. These directions might include holding the assets for a period or converting them to traditional currency before distributing them to your beneficiaries.
In addition, you should designate who will inherit your cryptocurrency assets. You must specify the amounts or percentages each beneficiary will receive after your death. You have the options to designate specific cryptocurrency allocations to beneficiaries or include your crypto assets in the residual estate, whcih will then be distributed proportionally among your beneficiaries.
What Information Should I Disclose?
It’s more than likely that your executor might lack the expertise to manage or even access your digital assets. Consequently, your plan needs explicit, detailed instructions on locating and retrieving this digital currency. In Michigan, Wills become public records during the probate process, exposing sensitive information to the general public. Sharing your cryptocurrency access details in such a manner could lead to unauthorized access or theft, which can jeopardize your digital assets and privacy.
To address this, you should consider creating a separate Digital Access Guide. This document would function similarly to a Personal Property Memorandum, which lists tangible assets and their distribution. Your Will can reference the location of this Digital Access guide without revealing its confidential contents. This will ensure your executor knows where to find this information without making it publicly available.
As you can see, estate planning can be particularly complex when it involves cryptocurrency. By addressing the unique aspects of cryptocurrency in your estate plan, you can safeguard your digital assets and ensure their smooth transfer to your designated beneficiaries. It’s in your best interest to consult with an estate planning attorney to ensure compliance and minimize tax liabilities. Contact The Lauterbach Law Firm to ensure your plan is thorough.
