Cryptocurrency has grown in popularity in recent years as investors have discovered huge returns. More people investing in cryptocurrencies (e.g., Bitcoin, Litecoin, Ethereum, Ripple, and others) are looking to pass these digital forms of currency on to beneficiaries after their death in a will as a result of their increase in wealth.
It is possible to leave cryptocurrency assets in a will, but it is not as simple as including traditional investments. As a result, this article entails everything you need to know about cryptocurrency assets and how you can leave it in your will. Expand your knowledge and read further to gain more information on the subject.
Include Cryptocurrency in Your Will
It may seem self-evident, but you must include cryptocurrencies in your will. If you don’t specify something in your will, it goes into the residue or remainder of your estate, which is a type of catch-all for your belongings. Personal property, clothing, miscellaneous accounts, and subscriptions make up the rest, which is a collection of everything you own that wasn’t accounted for in your will.
When physical property is included in an estate’s remainder, this isn’t an issue. Material goods, like books or jewels, can be seen, while other assets, such as bank accounts or stocks, can be discovered through a paper trail.
However, Bitcoin leaves little—if any—paper trace, and finding it is impossible if you don’t know where to search. If your beneficiaries are ignorant of your cryptocurrency holdings, they may never uncover it if it is included with the remainder of your estate.
To prevent falling into this trap, including a detailed description of your cryptocurrency assets (and where to obtain them) in your will. Do you feel like you are behind everyone else who has started trading cryptocurrency? Don’t worry. Read more to begin your cryptocurrency trading successfully.
Include Digital Wallets In Your Will
Your will should not only mention the existence of your cryptocurrency but also where your family members or beneficiaries can find it. Unless you make it obvious where your cryptocurrency is held, your loved ones will be seeking a needle in a haystack among the different sorts of digital wallets and online exchanges.
Remember that your wallet could be stored on a computer, smartphone, or other devices. It’s critical to mention these devices in your will so that the vital components of your digital wallet remain together until your beneficiaries are able to access your bitcoin. Any wallet backups should also be included in your will in case the original one is lost.
Create a Guide to Cryptocurrency Access
You may feel at ease with cryptocurrency, but your recipients may not be. The learning curve for cryptocurrencies can be challenging for some people to overcome. Include a step-by-step explanation of how to access your cryptocurrencies to make things easy for your loved ones. You could also include a distinct paper as part of your memorandum about PINs and passwords.
Even if your beneficiaries are aware of bitcoin, they may not know how to get their hands on your funds. Leaving instructions in straightforward language will alleviate some of the tension and frustration that comes with attempting to figure it out on their own.
Assume that your beneficiary is unfamiliar with cryptocurrency while crafting the instructions. From accessing your wallet to trading coins for regular currency, this guide should be able to walk a cryptocurrency newbie through every step. This guide, like your cryptocurrency memorandum, can be included in your will and updated as needed.
After you’ve finished making the guide, put it to the test. By walking through these guidelines, you can verify that you have provided all the necessary information your loved ones need to access your cryptocurrency assets.
Consult A Professional
Before including any digital assets in your will, you should always contact an estate planner or tax lawyer. You might discover that putting all of those assets into joint ownership is a better and more realistic option rather than transferring them all together.
They can then be accessed by either or both beneficiaries at any point during their lives. However, keep in mind that this may affect the tax burden. Because bitcoin is subject to taxes, it’s crucial to speak with an attorney or tax specialist familiar with cryptocurrency ownership and inheritance.
Tips To Know Prior To Including Cryptocurrency In Your Will
You must keep a few factors in mind before and during the process of listing cryptocurrency as an asset in your will:
Please do not mention your crypto account passcodes, passwords, or PINs in your will since they may be subject to probate, which means that sensitive information may become part of the public record, thus posing a security risk. If you change your password, passcode, or PIN, make sure to update your memorandum so that your beneficiaries can simply access your accounts after you die.
Make sure to produce a comprehensive cryptocurrency access guide that includes step-by-step instructions for gaining access to your digital assets. Test the step-by-step instructions to make sure they’re error-free when your recipients utilize them.
Make sure to trust your fiduciary when adding your cryptocurrency account details to your will, memorandum, or cryptocurrency access guide. You can leave instructions on where to find your private key in a digital vault, which is an excellent place to store your digital wallet information and purchase history. If you keep your secret key on a digital device of any kind, ensure your executor knows how to get into it.
Cryptocurrency demands more planning than traditional assets to leave to your loved ones after your death. You may make the procedure easier for your beneficiaries and ensure that they inherit your coins conveniently.
You can either give all the information yourself or seek assistance from an estate planning attorney. The most important thing is to make sure your loved ones are aware of your bitcoin holdings and that they have the information they need to access it after you pass away.