A mere 23% of the 1,150 crypto holders who responded to the Cremation Institute’s online survey, conducted between October 2019 and June 2020, reported having a documented plan for passing on their crypto assets in case of their death. That’s despite the vast majority – 89% – of participants who worry on some level about whether their crypto assets will be passed on to their loved ones.
Unsurprisingly, the lack of planning is strongest among younger generations. Millennials and Gen Zers are 10 times more likely to lack a crypto inheritance plan than their elders, the survey found. Of the 18% of those 18-34 years old who reported having a will, just 3% said will provides for what happens to their crypto.
Wills appear to be an unpopular means for documenting crypto plans across all age groups, baby boomers included. Far more prevalent were “instructions,” according to the survey, which found 65% of those planners hid their crypto instructions in the house, 17% stored them on a computer or USB device and 2% kept them in a safe deposit box.
The problem is compounded by a general lack of crypto estate law around the world.
Meaning of Hodlers
Hodlers are crypto investors who buy and hold their positions regardless of price. … The term was created in 2013 in a Bitcoin chat forum by an investor who was watching Bitcoin’s price fall sharply but decided not to sell. He wrote a post titled, “I am HODLing,” meaning to write “HOLDing.”
This is a new asset class that estate planning attorneys are likely to see in their clients’ portfolios in the future. It is important to include language in every will and trust that permits the fiduciaries to access the digital records necessary to properly administer any cryptocurrency in the estate.
Estate Plan with Crypto
Estate planning for investment portfolios has always been somewhat complicated, but in the era of digital currencies, it has gotten significantly more so. It used to be that investors could write out a will and include items like stock certificates in a safe deposit box for their next of kin and that the transfer of investments would move smoothly. Now, there are new laws and protocols which must be observed if an investor wants to be sure that his or her digital assets are safely and securely transferred when the time comes.
Estate Plan Crypto Techniques
- Adding cryptocurrency to your Estate Plan is much simpler than it may seem. Especially since the hard part of starting and securing your investments has passed. The first step to this process is to list each type of cryptocurrency you have in your Trust. The reason you do this is to ensure that it can be dispersed amongst your beneficiaries according to your wishes.
- Make sure to include each type of cryptocurrency you have invested in to ensure that none of it is lost and swept up in the residue as many who failed to apply with these principles got a lost while incapacitated.
- Remainder of your estate, keeping your family/beneficiaries informed can also help mitigate the chances of any uncounted cryptocurrency.
- You’ll want to make sure that any and all digital wallets are listed and accounted for. Many Websites and Applications have two factor authentications so it would be important to include access to any device that those authentication codes would be sent to.
- It is also important that you place any passwords or secure keys in a secure location with directions on how your beneficiaries may access everything about your cryptocurrency in your Estate Plan.
- You wouldn’t want your beneficiaries to be able to find the accounts without any means to access them. If you make it easy for your beneficiaries to access the account, you run the risk of it becoming easy for hackers and thieves to do so as well.
- Essentially, speaking with these persons before finalizing your Estate Plan so they can have an easier time accessing the information they will need once the time comes for the Estate Plan to be executed.
Please contact any of our estate planning attorneys today. If you would like to learn more about estate planning with Cryptocurrency.