How Do Your Digital Assets Affect Your Estate Planning?
Have you invested in cryptocurrencies over the years? These alternative forms of money have become truly valuable assets in recent years as their market values have risen. But have you considered what will happen to those digital assets after you have passed? If you’re not careful, your beneficiaries could get stuck in probate litigation, or worse, those assets could be lost forever.
The Problems Digital Assets Cause While Planning Your Estate
Estate planning with digital currency is a fairly new area of the law. Only 42 states have laws on the books allowing executors to manage these unique assets. Colorado is one of those states, so you can direct how your digital assets are handled after you pass. However, unless you prepare properly, the contents of your digital wallet could stay locked.
- Informing Heirs that Digital Assets Exist: To bequeath cryptocurrency like Bitcoin, Ethereum or Litecoin, your beneficiaries must first know they exist. Hunting down these accounts without your assistance may be impossible, so it is important to list your digital assets. As in most cases, having a hard copy is better than a digital one. Technological devices can fail in ways that hard files cannot. Just be sure to have at least two copies of this list stored in two secure locations.
- Providing Access to Accounts: The other important part of passing on your digital portfolio is making sure these assets are accessible. In many cases, a court order can’t help beneficiaries get access to an online account. That means they will need your logins, passwords, security PINs, passphrases and other security keys to access those accounts. These should be stored with your list of digital assets. Should you adopt new security devices such as retinal or fingerprint scanners, be sure that there are ways around them, or the assets secured by them may be lost when you are no longer around.
Why Is an Estate Plan Necessary?
Making sure that your beneficiaries can access your digital portfolio isn’t the only step when it comes to your estate plan. Make sure your executor has clear instructions as to how these assets are to be distributed. Without those instructions, beneficiaries could spend years in court, which could ruin their familial bonds.
Consulting a Denver estate planning lawyer may help you craft strong guidelines for the distribution of your estate. At Wiegand Attorneys & Counselors, LLC we have over 40 years of experience helping clients. Contact us if you have concerns about difficult assets in your portfolio.