While a growing digital wallet can be a healthy addition to your investments, your estate plan should adapt to this new class of asset.
By Ryan Conklin, Wright & Moore Law Co., LPA
If you follow financial news, investment trends, or emerging markets, you have probably heard of Bitcoin, Ethereum, Doge Coin, and other cryptocurrencies. Cryptocurrency, or crypto for short, is a new system of currency that is based entirely on the internet and is not tied to a central bank or a particular government. In the last few years, crypto emerged as a darling of the investment world, with some currencies increasing in value by thousands of percentage points.
Crypto is maintained in a digital ledger that is highly secure, rigorous to acquire, and very difficult to access by unauthorized parties. The owner of an online crypto wallet is the only party who can access and manage those currencies. With such a valuable asset, and one that is regularly appreciating, estate planning for crypto owners present special challenges.
The first and most important step is the crpyto owner providing a trail of bread crumbs for a fiduciary to find. As with other assets, if someone doesn’t know an asset exists, it is difficult to make a plan for it.
Next, after an attorney is made aware of the cryptocurrency, he or she can adapt the estate plan accordingly. A crypto wallet requires a unique alphanumeric key for access, and these wallets typically do not rely on personally identifiable information like address or social security number. A crpyto owner should make the private key readily available to an estate planner.
Generally speaking, simple estate plan documents will struggle with a complex asset like cryptocurrency. If you elect to use a will-based plan, the valuation of your cryptocurrency or the private key may become public record. Similar to other assets like land, the probate process could tie up crypto in months of court proceedings. Best to avoid these hurdles with a proper estate plan.
A trust-based plan makes the most sense for dealing with a digital asset like cryptocurrency. Trusts provide maximum flexibility in drafting the plan, can offer complete privacy, and may allow for a seamless transition of the asset. Trusts also provide the best vehicle for managing estate tax issues that can arise if your crypto portfolio is substantial.
While a growing digital wallet can be a healthy addition to your investments, your estate plan should adapt to this new class of asset. If you, a friend, or a family member is mining cryptocurrency, make sure they implement an estate plan that can capture that value and pass it to his or her heirs. As always, seek legal counsel if additional guidance is needed.
Why are “Legal Deserts” a problem and what is being done to give rural Ohioans more legal representation? Find out on this Ohio Farm Bureau Podcast from experts at Wright and Moore.
Read More
Two of the major trends playing out in Ohio are energy-related development, as well as reshoring of manufacturing, of which Intel is just the highest-profile example.
Read More
Get an update on the real estate picture in rural Ohio from Wright and Moore and find out why a new farm bill is a priority for Sunrise Cooperative and its members.
Read More
The new Corporate Transparency Act requires that millions of businesses, including many farms and agribusinesses, report their ownership to the Department of Treasury.
Read More
The use of your personal information by criminals is a scary proposition. Like other areas of risk assessment, take a look at your exposure and determine if protective steps are necessary.
Read More
Find out what farmer and ODOT project manager Mark Seger is sharing when it comes to agriculture’s concern about infrastructure development on this Ohio Farm Bureau Podcast.
Read More
Hear what Ryan Conklin with Wright and Moore is telling his clients in order to prepare for the 2026 sunsetting of a major Estate Tax exemption. Plus, get a preview of this year’s Farm Science Review
Read More
Wright and Moore Law offers six steps to jumpstart the succession planning process.
Read More
The new IRS rules bring added succession planning flexibility for farmers, who have watched the value and expense of everything increase in the last year.
Read More
Over the past year, the Ohio Environmental Protection Agency has started to develop a TMDL for the Maumee River watershed to address algal blooms and the sources of nutrients that attribute to those blooms.
Read More
