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Include cryptocurrency in your estate plan

The Law Office of Jeffrey L. Weinstein

The rise of the value of cryptocurrencies in the past few years has exploded and many people have vastly added to their financial wealth. There are billions floating around out there and if you own any of it, like BItcoin, you need to include in your estate planning.

You might think that upon your death, as long as your heirs have your login information. That’s all well an good but the idea behind cryptocurrency is secrecy. In normal circumstances heirs would just have to wait to be contacted about any assets you left. Not so with crytpocurrencies like Bitcoin. Unless you inform your heirs that you have it, there is no way of them knowing. “Crypto” assets are invisible. With regular physical assets, heir would eventually be informed as to their existence. Cryptocurrencies don’t work that way.

What you need to do is draw up a net-worth statement. That’s basically a financial reporting document that details your assets and liabilities. Now most people think that as long as they have the login information we stated above, they can have access to the assets. No. Once banks and other financial institutions find out about a death. they freeze all the accounts of the deceased until the estate is settled. “Crypto” assets aren’t held in any institutions and no one will know you have them unless you tell them.

According to an article on cnbc.com

Even if your heirs know you owned cryptocurrency, there is no way they will be able to access those assets unless you also share the encrypted passcode needed to unlock your account — which can be virtually impossible unless you have planned ahead for such a contingency.

There are now countless stories of bitcoin owners who have gone to great lengths to try to remember or recover lost passcodes — from digging through trash bins to hiring hypnotists. With all the wealth at stake, there is also the increased risk that hackers might also try to find a way to access your crypto-assets if you aren’t careful.

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