With the evolution of technology, estate planning has transformed considerably. Earlier, planning for the division of assets after an individual’s demise used to be a straight-forward procedure, today, it is not. This is because like every other aspect of our lives, our assets have also become digital. Cryptocurrency is the most popular and widely used digital asset today. This is just one reason why you cannot leave it out during estate planning. However, merely mentioning that your client owns cryptocurrency is not enough. You must include all the necessary details when planning the estate since accessing the currency requires information. This is why estate planning involving digital assets is a trending topic in 42 states.
Estate Planning Involving Digital Assets according to the RUFADAA.
The unique nature of the asset is why estate planning has gone through a transformation over the last few years. There are laws today that require the executors to take the traditional route when dealing with estate planning involving digital assets. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) gives the attorney the right to access the digital assets without compromising the privacy of that of the owner.
Some experts believe that the executors will be quick to deal with the sale of cryptocurrency since the value of such a virtual asset is unpredictable. The new laws also reveal a need for everyone involved in the case proceedings to be familiar with the concept of digital assets including judges. Hence, the inclusion of cryptocurrency in a deceased’s list of assets has truly transformed the world of estate planning.
For individuals holding digital assets, it is necessary to take a few steps to prevent their heirs from losing the holdings and unable to access them. Here is a step-by-step guide that can be used:
- Since cryptocurrencies are practically untraceable, you must first declare the asset by listing it in your will. Otherwise, the holding will be considered as a remainder and will not benefit your heirs as they will not be able to find out where it lies. Thus, cryptocurrency can remain dormant if you fail to declare it in you will.
- Merely stating what cryptocurrency you own in your will is not enough. You must also make sure to mention all the required information that will help the heirs access the digital asset. All the crypto keys, accounts, and security codes need to be shared to make the currency accessible. You can also do this by maintaining a safe where all the crucial information is stored prevent it from being accessed by the public. Make sure to mention only the necessary details in the will.
- You must also provide clear instructions about how you want your digital assets to be distributed amongst the heirs. You do not want a legal battle to begin after your demise in an attempt to come up with a just and equitable distribution. Lawyers with the right knowledge about estate planning involving digital assets can help you in this regard.
Leaving out your digital assets in the will can lead to a loss of your holdings. This is why it is imperative for holders of digital currency to include their virtual belongings in their will and estate planning documents.