Estate Planning and Cryptocurrency
When creating an estate plan, you need to protect all of your assets. This includes cryptocurrencies (crypto) like Bitcoin. Cryptocurrency is a digital asset that’s stored online and can be used to buy goods and services. It functions in a way that’s similar to an online bank account. Your beneficiaries will need to know how to access your crypto wallet and keys, so that it’s not lost forever. There are a few easy steps to avoid this.
Use resources already at your fingertipsUse a password manager to protect all of your passwords. Password managers like Dashlane and One Pass will store passwords in a secured and encrypted system. Password managers also allow you to list emergency contacts. After you pass away, the emergency contact will be able to access your passwords and secured data, safely allowing you to create your contingency plan.
Talk to an attorney about how your estate plan will protect your cryptocurrency
When meeting with an attorney about your estate planning needs, you will need to mention you have cryptocurrency and include information like: (1) to whom your assets will be left, (2) a general statement of where your cryptocurrency might be found, and (3) a narrative letter, which is a separate document containing more detailed, private instructions for your cryptocurrency. It’s important to label this separate letter as private, because if your will goes through probate, it will become public record.
The narrative letter details instructions more fully for someone unfamiliar with cryptocurrency. The narrative letter should be stored alongside other papers in your estate plan. The narrative letter should state (1) what wallets you use, (2) where you have stored your cryptocurrency, (3) any website links or applications needed, (4) all of the logins and passwords, and (5) step-by-step instructions on how to obtain this information.
These are a few ways you can protect your cryptocurrency when creating an estate plan. If you have further questions about how to protect your crypto with estate planning, it is important to review your estate plan with a licensed attorney to discuss the specific facts of your situation.
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