Four Estate-Planning Steps Cryptocurrency Owners Should Take
Nov. 9, 2018
Many Myrtle Beach area residents have taken the time necessary to create an estate plan to protect their estate, medical care wishes, children, etc. An estate plan is critical in ensuring a person’s wishes are followed after they become incapacitated or pass away. There are always changes in estate planning and it is a fluid process that people should revisit often to make sure all of their plans are still valid. One new addition to estate planning is incorporating cryptocurrency.
Cryptocurrency investing has become popular for Florida residents. Digital assets are an investment that many people are engaged in. Since they are so popular, it is important for those who have these digital assets to make sure they include them in their estate plan. First, investors need to record the private access information and give this information to their estate representative. Information may include a private key, passwords, and two factor authentication information. Next, digital wallets which hold these currencies should be transferred to a hardware wallet. A hardware wallet is an encrypted flash drive that requires a password to access.
A cryptocurrency account holder should also make sure they understand their state’s digital assets laws in regards to probate. Finally, determining tax basis for cryptocurrency is important. Tracking cryptocurrency historic sales and purchase of digital assets by saving the trade confirmation to track capital gains and losses.
A person’s investment in cryptocurrency can be lost upon their death unless special plans are made. Estate planning is much more than just wills and trusts. A legal professional who specializes in estate planning can help their client create a specialized plan for their own unique situation. They can advise their client as to how to protect their assets and make sure they are all accounted for. An estate planning attorney can make sure these assets are passed to heirs.