Estate planning may seem pretty easy at first glance. After all, to many Californians it is nothing more than deciding how to distribute assets upon one’s death. While this is true to a certain extent, estate planning is much more complicated in practice. Those who fail to properly and thoroughly address all estate planning issues may be putting themselves, and their loved ones, at risk of unexpected expenses, tax implications, unwanted distribution of assets and debts and eve the loss of valuable assets.
One asset that is becoming more common is cryptocurrency. Many Californians are probably aware of this digital currency due to the surging popularity of Bitcoin, but few recognize the impact that it can have on estate planning. Although cryptocurrency can carry a significant amount of value, some experts are finding that individuals are failing to properly document its existence and how to access it. In these instances, when a cryptocurrency owner dies, his or her beneficiaries may be unable to access what could be a significant amount of money.
So how can an individual address cryptocurrency in his or her estate plan? The first step is to ensure that it is addressed through one’s existing estate planning documents, such as wills and trusts. Second, people need to make sure that they leave very specific instructions regarding how to access cryptocurrency. This includes leaving behind passwords and private security keys that are often issued with cryptocurrency.
Once these matters are addressed, an individual should be sure to revisit his or her estate plan routinely to ensure that everything is in place according to his or her wishes. There are stories out there about individuals losing their security keys to cryptocurrency, meaning that they cannot access what could be tens of thousands of dollars. Nobody wants that to happen to them, which is why estate planning is becoming even more important in our ever-digitizing world.