Estate Planning For Cryptocurrency Assets
Hi there, Bridget Mackay with the Law Office of Bridget Mackay here in Petaluma. We work in estate planning and elder law.
Today, I want to talk a little bit about cryptocurrency or maybe you’ve heard of it (as) Bitcoin. These are currencies that are used to trade on the internet. And, the beauty of them for some people is they’re very secret. So, they don’t report to the IRS. You know, you can’t find crypto currency due to your social security number. They’re very much under the radar and they’re becoming more popular.
So, how do we use or how do we fund, as you know if you have an estate plan, it’s very important to fund assets into that trust or have your heirs be aware of what those assets are if you have a will. How do you do that with cryptocurrency when you really don’t have a hard titling to it? You really just have a username and your crypto password to get to it. And we’ve been seen as a problem where even people who have bitcoin will miss or lose their password and they’re digging through trash, going to a hypnotist to try and find out what it is. And, imagine that, if that’s happening with people who actually own it. What happens when you die unexpectedly, and you have a Bitcoin account, or you have some sort of crypto currency and your heirs don’t know where to find it?
So, a solution is and probably the most important thing you need to think about with crypto currency is that your heirs need to know how to get to it.
How do I do that? You can do it kind of in a traditional way. I know a lot of clients who have a username and password written book that you would put all of that information in. And then, you can put that in a safe place or a locked safe. Another way to do it is write all that information on a USB hard drive or, you know, drive that you can keep in another location. It’s not on your computer so that you avoid hackers getting that information. Either way you cut it, either of those two methods, the main thing is is let your heirs know where those two methods are. Whether you’ve written it down or you’ve put it on a USB drive because they all -if they don’t know where to find it they won’t find it. There’s no way to research crypto currency. It’s not like you can go to a bank and say, “Hey I’m the successor trustee or I’m the executor. Did my dad have an account here?” There’s no way to do that and you’re not going to get any statement in the mail or even online.
So, if you want to know more about bitcoin or keeping your information secure in this day and age of the internet, check out my other blog which is seniors beware of the five scams. And we talk a little bit about it.
So If you have bitcoin, crypto currency, make sure your heirs know where it is. Where your username, passwords, all the information they need to know to get to those funds. Because, you spent some time building it up and you want to protect it just like you want to protect your house.