A key part of estate planning is accounting for all your assets, including currencies—and that can be easier said than done. After all, currency itself is changing all the time. It is increasingly common for investors to consolidate their assets in the form of cryptocurrencies, with Bitcoin being the best-known example. The question is, how can you protect your Bitcoin investments within your estate plan?
There are a couple of factors that make Bitcoin estate planning rather difficult. First is the secretive nature of cryptocurrency. Second is its digital nature—i.e. the absence of any tangible, physical assets. What these factors imply is that investors must keep thorough records of their Bitcoin account details—or else, their cryptocurrency portfolios could be completely lost upon their death.
Specifically, investors should maintain records of what they own; where they bought it; and where their beneficiaries might access these accounts. It’s vital that investors not leave any of this up to guesswork. Cryptocurrency investment is possible even without offering any of your personal information, which means that, without a rigorous paper trail, your beneficiaries may have no idea that you even have cryptocurrencies.
A compounding factor is that Bitcoin and competing currencies are changing all the time. In the future, these markets will likely become more tightly regulated, which could actually make estate planning easier. In the meantime, investors must leave behind a “digital key” so that their accounts don’t get lost in the shuffle.
This underscores another important point about estate planning: Your investment portfolio can change at any moment—especially if it includes cryptocurrencies—so it’s important to review and revise your estate planning documents regularly. To speak with one of our estate planning attorneys about the nature of cryptocurrencies, or to review an existing estate plan, contact Singh Law Firm today.
Schedule an estate planning consultation with Singh Law Firm today.