Cryptocurrency Inheritance

An often-overlooked issue of crypto asset ownership is crypto inheritance when the owner passes away. It's not that crypto inheritance is difficult, but rather many estate-planners are simply not conversant with crypto assets, even if they are tech-savvy. This coupled with the fact that most people’s wills and trust documents are not updated often could leave your beneficiaries in the dark about your crypto asset holdings.
 
Here are a few quick pointers to help...

 
1. Update estate-planning documents
 
If your current estate planning documents don’t address your cryptocurrency assets it’s important to update them or else you run the risk of your heirs losing out. You can write a totally new will or trust granting access to your cryptocurrency or you can add a digital assets addendum to your existing estate planning documents. Most estate planning attorneys can assist with either option.
 
2. Create an inventory
 
The next important step is to record a complete list of your crypto assets and where they are stored. One secure storage option to store the inventory of crypto assets and their locations in a OneSecurePlan™ account (www.OneSecurePlan.com). Then assign your beneficiaries and executor delegated access, in the event anything happens to you. They will then know where your crypto accounts are and how to access them, thus avoiding loss.
 
 
3. Cold storage and paper wallets can be too secure!
 
We all understand the safekeeping of our private keys is ultra important.  However, if you have paper wallets and physical copies of private keys you need to ensure your loved ones know where they are stored. If not, in the event you pass away, you run the risk of them being abandoned.  
 
A secure option is to record the location of your offline paper wallets and private keys in OneSecurePlan and only allow access to the recorded location once you have passed away.
 
4. Keep it current
 
Once you have recorded everything, be certain to keep your list updated when you purchase new crypto coins or tokens and record the location of any new wallets.  Additionally be sure to record the cost basis for all new crypto assets and details of any trades. The IRS has classified cryptocurrencies as property* for federal tax purposes, so leaving a clear record for beneficiaries will make easier when it comes to inheritance.
 
* For more information regarding the IRS treatment of cryptocurrencies sees the IRS' Notice 2014-21.
 
 
Disclaimer: This article is not legal, tax or financial advice, it is for educational and informational purposes only.  Always confirm with your legal, tax or financial advisor regarding your personal situation.