Cryptocurrency, especially in the estate planning context, requires special consideration.
Cryptocurrencies, like Bitcoin, have recently piqued the interest of many investors.
Against this backdrop, those investors should carefully consider the impact of such non-traditional assets on their estate planning.
The Bankless Times recently considered this in article titled “What happens when your estate is cryptocurrency,?”
The answer to the question posed? Bitcoin may require special considerations.
What are these?
A public key is a random combination of numbers for a wallet used in transactions and transfers of the cryptocurrency.
A private key, on the other hand, is essentially the password to access your personal account.
It is this latter "key” that will be especially important in estate planning.
Without it, your heirs may never be able to access your Bitcoin funds.
To combat this, you should leave your “private key” and any instructions in your will or other estate planning documents.
This can protect it from getting lost.
You could also put the key on a flash drive.
However, this could be a problem if the drive becomes corrupted or someone deletes the file.
Another option would be engage a third party that serves as a Bitcoin bank.
This entity would keep the private key for you, its customer.
If you do this, you should tell your family about your cryptocurrency and how to access it.
The third party will not inform them on your behalf.
Working with virtual money and assets can be tricky, but it is not impossible.
Contact an estate planning attorney with experience navigating the largely uncharted waters.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Bankless Times (March 6, 2018) “What happens when your estate is cryptocurrency?”