It sometimes seems we’ve been invaded by technology. From books to entertainment to education, digital is the way to go. In fact, even our wallets have been affected. Cryptocurrencies like bitcoin, though somewhat controversial, are becoming more commonplace. Aside from the digital aspect of bitcoins, you need to remember that they are an asset, potentially an estate asset. As such, you’ll need to include bitcoins or other cryptocurrency in your estate plan, if you happen to own any.
Bitcoins are one form of anonymous digital currency. Others include Ether, Litecoin, and Dogecoin. Some feel that, rather than a currency, bitcoin is more of a commodity or an investment. Rather than a tangible coin, bitcoin is a way of “exchanging money anonymously” using the Internet. No matter what it’s called, bitcoins have a value. Therefore, they may be considered estate assets.
Most people keep their digital currency in a digital wallet. Again, not a typical wallet, but a way of storing bitcoins using software or hardware. A private password or key enables the bitcoin owner to access their money. Owners who lose their password or key may be unable to ever retrieve their money, which brings us to estate planning.
Most financial institutions allow and even encourage account holders to name beneficiaries for their accounts. Typically, digital currency exchanges do not ask owners to name a beneficiary. Bitcoins are often purchased without using any personal information, which could make it difficult or impossible to identify the owner.
With all the secrecy surrounding cryptocurrency, how can you ensure your family can include them with your estate assets?
Like any other digital asset, your family or personal representative needs to know how to locate and retrieve the asset. Make bitcoins part of your digital asset inventory. Additionally, especially if you own large amounts of bitcoins, talk to your estate planning attorney about revising your Will and any trusts that may be affected by your investment. Just don’t list any secret keys or login information in your Will. During probate, your Will and everything in it become public record.
John Mangan is an experienced Florida estate planning attorney, who has been board certified in Wills, Trusts & Estates by the Florida Bar. At Law Offices of John Mangan, P.A., we have mastered advanced estate planning. Call us at 772-324-9050 to set up an appointment or use our online Contact Form.