Cryptocurrency has skyrocketed in popularity in recent years, raising a number of questions about how to manage these unique assets. One question worthy of consideration by any Texas cryptocurrency owner is how to pass this asset down as part of an estate plan. There are many unique elements of cryptocurrency that should be addressed in an estate plan. These include:
- Storage: It is important that these assets are stored securely. Given recent hacks on public exchanges, it may be beneficial to store cryptocurrency in a digital wallet or through cold storage. Wallets can also help with the transfer of the currency into a trust if needed.
- Private key: Without the private key, it is not possible to access digital currencies. It is therefore of high importance for the owner to pass the key details to the designated executor or next of kin.
- Changing laws: Cryptocurrencies can be an extremely valuable part of an estate. However, they can also be vulnerable to legal shifts, as these assets are relatively new and might be subject to future regulation.
- Savvy executors: For digital currency owners, it will be important to either pick an executor who understands this asset, or to have someone on hand to advise them with this awareness.
While regulations may be continually evolving, there are some recent laws that are relevant to estate planning. For those attempting to create a comprehensive estate plan, one consideration at this point in time is the Uniform Fiduciary Access to Digital Assets Act (UFADAA), which has been passed in some states. To gain a better understanding of how estate planning legalities will ultimately affect one’s assets, including cryptocurrency, it is advisable to speak with an experienced Texas estate planning attorney.
