Estate Planning in the Cryptocurrency Era
In the year 2017, Bitcoin, the cryptocurrency and worldwide payment system, was the subject of every conversation. Because the value of Bitcoin rose so quickly, it became extremely important to those who possessed it. Cryptocurrency is likely to become an estate asset; however, as of now, the current estate-planning laws have not been keeping up with the current estate-planning trends. There is “no entity to authorize access to another’s cryptocurrency.” Unlike other assets, cryptocurrency is transferred through technological protocol and not legal documentation. Instead, it is treated like property rather than currency when it comes to estate planning for tax purposes. The value of cryptocurrency constantly changes. Secrecy is one of the most important factors in cryptocurrency because the identity of the holder is not a requirement and is often unnamed. Probate is the legal process of establishing the validity of a will. However, after a person passes away, the will will become public record. This is the case for residents in the state of Florida. Because secrecy is a defining quality in cryptocurrency, the probate process would undermine this. It is essential that the cryptocurrency holder and estate-planning lawyer meet in a timely manner and develop cryptocurrency clauses.
Some recommendations for cryptocurrency holders would be to:
“Use an internet application that will transfer cryptocurrency to a revocable living trust upon the execution of a will.” The cryptocurrency holder will still need to leave instructions with an executor about to how to transfer these assets into a trust.
Update power of attorney authorization "to reflect the need for a specific person to act on behalf of cryptocurrency holders.”