Estate planning and cryptocurrency: 5 tips for leaving your digital assets to someone else
Cryptocurrency has changed the nature of what can be considered an asset, and that’s affected estate planning, too, the process of allocating your assets to your heirs on your death. Experts say that while crypto hasn’t changed the principles of estate planning – after all, you still want to distribute your assets as you like – it has increased the complexity of the pre-planning process.
“The big hurdle is there is nobody to call to recover passwords, keys, and locations of digital assets, making pre-planning more critical than ever before in estate planning,” says Corey Roun, senior director of trading and derivative strategies, Lyons Wealth Management.
Here are five tips for cryptocurrency owners as they’re planning their estate and what to watch out for.
5 tips for estate planning with cryptocurrency
1. Know where the crypto is held
2. Understand that your crypto could be lost forever
3. Provide access to crypto accounts
4. But be careful how you give access to accounts
5. Cryptocurrency taxes
Properly planning an estate when you own cryptocurrency or other digital assets can require more planning ahead due to the assets’ decentralized nature. Smart pre-planning can help mitigate the biggest dangers of leaving crypto assets stranded in an account or greedy family members looking to siphon off your assets before they reach your intended heirs.