What are estate planning attorneys to do when it comes to drafting estate plans for their clients now that cryptocurrencies are becoming more common investments? Is it necessary to include bitcoins and cryptocurrency investments in your estate plan? The majority of people fail to incorporate their bitcoin assets in their estate planning. Failing to incorporate their assets in the estate plan means they end up losing their crypto investments because no one can locate and access them therefore they can’t be passed to their loved ones. Have invested in bitcoins and NFTs? Is there a need to disclose your digital assets investments to your estate planning lawyer? What can an estate planning lawyer do to safeguard your investments? What is it that you need to do to account for your crypto investments?
Transfer of My Crypto Investments to my Heirs
As a bitcoin investor, you’re fully aware of how your funds are secured in your wallet, and that to have access to your investments you need the private key and a seed phrase to your investments and without them, there is no way to recover your digital assets. This implies that the assets will remain in limbo indefinitely. This emphasizes the significance of meticulously documenting, keeping, and protecting your digital investments in any event you pass away. Your cryptocurrency investments must be legally transferred and electronically accessible during the execution of your estate for them to be legally transferred to your heirs.
Discovering Digital Assets After Death
If crypto assets cannot be located and be available, they can therefore not get to the executor during the execution of the estate. Therefore, during the drafting of the estate plan, details of any digital assets owned by an individual should be documented well and stored safely. Passwords for electronic devices, all access codes for online accounts, and passcodes for your digital assets’ accounts should all be included.
Transfer of the digital assets
With all the information about the cryptocurrencies in place, the executor can now assume ownership of the digital assets. Obtaining a grant of probate may be necessary at times but not always. Estate planning attorneys are supposed to move the digital assets to a new wallet managed by the custodian. In any case, if someone else learns the passcodes, the assets will be safe. Estate planning attorneys must preserve devices containing digital assets’ access information with utmost caution.
Distribution of Digital Investments
After obtaining access to digital investments, estate planning lawyers can give them to the appropriate recipients. That is, ensuring that that the wishes of the deceased are honored.
Taxation of Crypto Assets
Upon your death, crypto assets have to be subjected to inheritance tax, as well as capital gains tax on the lawful transfer of assets. Individuals who are UK residents, and who have beneficially held crypto assets that are located in the UK their assets are subject to taxation tax as well as other assets in your estate.
To determine whether any digital assets kept overseas would be liable to inheritance tax, estate planning lawyers must investigate information on the digital assets owned abroad, particularly in the case where the deceased’s assets are owned in a different country other than the UK.
With cryptocurrency investments becoming increasingly prevalent, estate planning lawyers should be able to ensure the security of their clients’ cryptocurrency investments how to properly incorporate them in their estate plans.
Frequently Asked Questions
Do trusts hold crypto investments in NY?
Placing your crypto investments under a trust makes it less likely that your crypto assets won’t be identified. It is crucial to have your crypto assets documentation with a trust, this way they can be easily discovered.
Can crypto assets be put in a will?
Yeah. That can be done by incorporating the necessary information regarding the crypto assets in your will.
How can I leave my crypto investments in my will?
To pass your digital assets to your loved ones, you need to leave the passcodes to the crypto investments with your representative for him to transfer them to your heirs.
Why should I include my crypto assets in my estate plan?
To avoid probate in any event you pass away. Your passcodes are not enough to ensure that your loved ones have access to the crypto assets you have to include them in your estate plan for them to inherit them.
Are digital investments subject to taxation in NY?
Crypto assets are liable to inheritance tax upon the death of the holder and capital gains tax on valid disposal.
What are NFTs?
They work as a type of digital certificate of authenticity, stored in code on the blockchain. Rather than the NFT owner holding a physical sheet of paper proving ownership of that item, the NFT is a string of unique characters, or code, that represents anything.
What happens to my crypto assets if I don’t include them in my estate plan?
You will probably lose them in the event of your death since your loved ones will be unable to identify your assets.
What is needed for my loved ones to access my crypto assets?
Your loved ones need your crypto addresses and private key to locate and access your crypto assets.
