Thursday, November 17, 2022
Cryptocurrencies such as Bitcoin, Etherem, and Dogecoin to name a few, are a type of digital currency that uses cryptography for enhanced security. There are over 12,000 different cryptocurrencies digitally, making the tracking of these assets difficult. As the popularity and value of crypto continues to grow, the legal field is struggling to keep up. Crypto is considered an asset rather than cash, and because these assets exist virtually and are encrypted, it can be nearly impossible to track down once the owner dies.
Marc Zimmerman of The Law Office of Michael A. Zimmerman says, “traditional methods of writing a will and expecting the named executor to find all the assets won’t work with Bitcoin and other digital currencies. While you’re still alive, one of the largest advantages of a crypto wallet is that no one can get into it. This isn’t so great once you’re dead.”
One solution is to move crypto to an exchange. An option like Coinbase provides a vault that is essentially a safe-deposit-box for your private crypto key. This allows for a smooth transfer of inherited crypto assets to inheritors. Another solution is a trust account, which can be beneficial to avoid the probate process, making it easier to transfer to heirs.
For more information see Stacy Francis “When You Die, What Happens to Your Bitcoin?”, Kiplinger, October 29, 2022.
Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.
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