Estate planning in Texas has grown far more complicated than it once was. With the number of different financial vehicles available in which people are willing to invest, online banking and the secret nature of much of these new investments, navigating an estate plan can be difficult for the testator when crafting the estate plan and for the loved ones after the testator has passed. One issue that is growing more concerning is "cryptocurrency," alternatively referred to as "crypto." When investing in crypto, it is imperative to understand how to ensure these assets do not simply disappear after the person has died.
Those who are investing in crypto should document their holdings, where it was bought and how access can be achieved. This can be complicated, as the allure of crypto is often its flexibility and how secretive it is. The only way for others to know about a person's investment in these types of assets is if they are informed. For many, being cautious and private is of paramount importance. But, this can be a problem if the person dies without anyone knowing about these assets. When items are left out of an estate plan, it will usually be found out once the documents are discovered and examined. Crypto is different and people who invest in it or stand to inherit it should be aware.
Crypto has no statements, nor does it file with the Internal Revenue Service. Without information of how much of it is owned and listed in the estate plan, the attempts to preserve assets with crypto can fall short. Heirs who know that the testator had crypto could still have trouble gaining access to it unless they have the passcodes necessary to unlock it. When investing in crypto, it can lead to complicated estate planning concerns. Steps should be taken to handle this before it becomes a problem for the heirs.
Although many people are ambivalent about crypto, it is wise to have a grasp on how it can be handled when there is the possibility that it is a part of a person's portfolio. This and other estate planning concerns can be dealt with by contacting a legal professional who is skilled at helping clients meet their needs when crafting wills, trusts and any other document designed to ensure their assets are adequately dispersed after death, including cryptocurrency.
Source: cnbc.com, "That fortune will be lost if you don't add cryptocurrency assets to estate plan," Barry Glassman, May 1, 2018