To overcome the aforementioned privacy problem, do not list items like usernames and passwords in your will or other estate planning documents. When the will is probated, that information becomes public record.
Instead, keep such information in a separate document and limit Bitcoin references in the will to generalities. Your power of attorney fiduciary agent or designated estate executor should have ready access to this information if needed. So, these positions involve a great deal of trust. This trust underscores the need to choose these individuals wisely and, if need arises, do not hesitate to change them. We can help you prepare the necessary documents and avoid confusion when the time comes to execute these instruments.
Estate Planning Inclusion
Assume your fiduciary agents know nothing about cryptocurrency. After all, you choose these individuals because they are trustworthy and not because they have technical prowess. So, in addition to account information, the above-mentioned separate document should include some cryptocurrency basics, especially regarding tax and estate issues.
On a related note, the Bitcoin tax laws are constantly changing. For example, there may be a difference between a vault and a wallet. If Bitcoin becomes a more widely accepted payment method, Bitcoin stored in a wallet might be considered currency. However, almost no matter what happens, Bitcoin stored in a wallet will always be considered an asset. These things are especially important if the Bitcoin account is in an overseas location, which is often the case.
Cryptocurrency estate planning also involves fraud and data protection issues. Cold storage devices, like thumb drives, alleviate many of these concerns. Furthermore, due to the nature of cryptocurrency, the estate plan should include a waiver of the diversification duty. This duty often requires agents to diversify investments in order to protect the principal or the beneficiaries.
Bitcoin could be an important part of your estate plan, but there are some issues to consider. For a confidential consultation with an experienced estate planning lawyer in New York, contact Dilendorf Law Firm, PLLC.
New York Cryptocurrency Estate Planning Lawyers
Dilendorf Law Firm
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The New York estate planning lawyers at the Dilendorf Law Firm give you more than solid advice as to cryptocurrency’s legal landscape. We also help you prepare solid documents that clearly convey your wishes.