Can Your Children Inherit Your Cryptocurrency?
Cryptocurrency started out as a young man’s game, but the same can be said about rock and roll. Of course, one needs look no farther than the likes of Paul McCartney, Keith Richards, and Elton John to see that some people find a way to keep rocking no matter how old they get. In 1965, no one had ever thought about the logistics of bequeathing a Pinball Wizard costume to one’s next of kin, but times change. The probate courts are set up to account for all the assets belonging to the decedent and to distribute these assets to their heirs. Of course, the trouble with cryptocurrency is that it does not neatly fit into any of the established categories of money, real estate, business interests, and personal property. Without having seen the wills of the aforementioned elderly rockers, one can safely assume that, if their wills list their musical instruments and platinum records, the court will count these as personal property, just as it would paintings, furniture, or jewelry. Cryptocurrency, by contrast, sets a new set of legal questions. If you own cryptocurrency and are mortal enough to need an estate plan (everyone is), contact a Tampa probate lawyer.
Entrusting the Key to Your Digital Wallet to the Personal Representative of Your Estate
Crypto-assets, including cryptocurrencies and non-currency blockchain tokens, are so new that the current probate laws have not quite figured out how to deal with them. For example, some bank accounts have transfer on death provisions. In the case of most accounts, the probate court can give the personal representative permission to access once-private accounts, even if they are password protected. Banks and other entities in charge of the decedent’s property must cede control of it to the estate. There are even rules about how to inherit airline miles. By contrast, crypto-assets, by their very nature, are designed so that it is almost impossible for anyone but the owner of the crypto-asset to access them. If a cryptocurrency tycoon dies, and no one alive knows the digital key to his crypto-assets, those assets, for all practical purposes, cease to exist.
Therefore, if you wish for a family member, a friend, or anyone else to inherit your crypto-assets when you die, you should include specific instructions in your will about how to transfer them to the beneficiary. Specifically, you should indicate where a paper copy of the digital key is local, and also indicate that the personal representative of your estate should access the crypto-assets when your estate opens for probate and either pass them onto the listed beneficiary as crypto-assets or convert them to cash before passing them to the beneficiary. With your estate planning lawyer, you should also discuss a plan for your crypto-assets if you become severely ill and need a family member or other trusted person to access them.
Reach Out to an Attorney for Help
An estate planning lawyer can help you adapt your estate plan to account for cryptocurrency and other newly invented assets. Contact David Toback for help today.