It may have taken you some time to educate yourself on the newest form of digital property known as cryptocurrency enough to invest in it. Now, you must focus on the measures that need to be taken so that your loved ones can access these earnings when you are sadly no longer around. Without further introduction, please follow along to find out how to pass down your cryptocurrency and how a proficient New York City estate planning attorney at Zimmet Law Group, P.C. can help you plan for this.
What happens if I don’t make a plan for my cryptocurrency?
Cryptocurrency is unique in that it is not maintained by a traditional government entity or financial institution. Because of this fact, your cryptocurrency may not be easily traceable. With that being said, if you do not tell your loved ones that you have invested in cryptocurrency, they may have little to no chance of finding out about it.
Along with making its existence known, you must also share your username/password, seed phrase (i.e., a sequence of 12 to 24 words that are the master key to your crypto wallet), and other multi-factor authorization tools. That is, there have been reported incidents of cryptocurrency owners losing significant fortunes simply because they lost their login information to access these digital funds.
All of this to say, there is no way for your loved ones to contact a customer service representative to access your account; you may not even have this opportunity during your lifetime. Rather, in a worst-case scenario, this digital asset may be lost to the blockchain forever. This may arguably be the equivalent of you leaving behind significant retirement funds, only for there to be no named beneficiaries to reap their benefits.
How do I plan to pass down my cryptocurrency to my beneficiaries?
While you still have the time to do so, you should inform your loved ones about your cryptocurrency investments. This heads-up may make the world of a difference. But also, you must state its existence within your Last Will and Testament document. As far as providing details on how to access these digital funds, you may need to cite your creation of a separate document known as a Digital Access Guide.
This is because your will document will inevitably be made a public record once it is submitted with the New York State Surrogate’s Court. So, you do not want your personal information to be made easily accessible to the general public. Of note, this separate document is not necessary if you forgo a will for a trust.
Also, within your will document, you may want to specifically designate a digital executor to handle the maintenance and distribution of your cryptocurrency. This should be someone you trust to have the technological knowledge to obtain these funds but also handle them in your desired way, whether it be converting them to fiat currency or otherwise.
Nonetheless, if you are ready to get started on your plan, please retain the services of a talented New York City estate planning attorney as soon as you can. We at Zimmet Law Group, P.C., look forward to receiving your outreach.
