By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Are Crypto assets part of your estate plan? [1]
If you own Crypto assets, such as Bitcoin, how can they be made a part of your estate plan?
How do Crypto assets work? The purpose of Crypto assets is to remove intermediaries (banks and credit card companies ) and their fees from a transaction and move an asset from “my wallet to your wallet” with no middlemen.
Starting with the basics: Crypto assets have no title, are highly volatile, unregulated by any government, and do not produce dividend or interest income. They are considered a high-risk asset.
If you want to hold Crypto assets in a Revocable or Irrevocable Trust, it is important to include language that states it is the intent of the owner of the Crypto asset, and the creator of the Trust, to permit the Trust to hold such an asset.
In order to access a Crypto asset, it is necessary to use a ‘private key” to unlock the asset which is stored. If the “private key” information is lost, the asset is lost. Professionals recommend use pen and paper to keep track of the “private key,” keep the information up to date, and store it in a bank safe deposit box or other safe place. Do not store the information on a computer as they can be hacked.
For estate planning purposes and just common sense, identify a backup to the owner, who is a trusted person. Provide that person with “breadcrumbs” so they can access the Crypto asset if requested by the owner, or when the owner may be incompetent or dies.
In a recent survey, Financial Advisors reported in 2021 about 50% of their clients ask about Crypto assets. In 2019 only 1% were asking.
If you have Crypto assets, let your estate planning attorney know so they can adjust your documents to protect and incorporate this unusual asset.
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[1] “The Intersection of Estate Planning and Crypto”, Matthew T. McClintock, J.D., Krause Financial Services, July 13, 2021.
“How to Dip a Toe Into Cryptocurrency”, by Anne Tergesen, The Wall Street Journal, July 17-18, 2021 page B4.
