Cryptocurrencies have become increasingly popular the past few years, with more than 400 million people owning them worldwide. As adoption continues to grow, it is important to consider how your digital assets will be handled in the event of death. Estate planning with cryptocurrencies is crucial to ensure that your digital assets are properly managed and distributed according to your wishes.
Estate Planning with Digital Assets is Not as Simple as Traditional Finance
Unlike traditional assets such as real estate or stocks, cryptocurrencies are not centrally controlled, and thus don’t have transfer mechanisms built in. This means that if you pass away without proper planning, your digital assets may be lost or inaccessible to your loved ones. While talking about death is not a fun conversation, planning is one of the most loving things we can do for our families. At Coast, we’re here to help ensure your assets are protected.
Considerations for Estate Planning with Cryptocurrencies
When estate planning with cryptocurrencies, there are several important considerations to keep in mind:
- Keep a record of your private keys: Private keys are used to access your cryptocurrencies and should be kept in a secure location. Make sure to keep a record of your private keys and provide instructions on how to access them to your designated executor or a trusted loved one.
- Don’t include your seed phrase or private key in your will: While it may seem like the easiest option to leave your seed phrase or private key in your will, this practice isn’t secure. When someone passes, multiple people have access to read the will, which can lead to theft or mismanagement of those assets. If you wish to leave instructions with an attorney, a better option would be to open a safe deposit box with recovery instructions and leave a key with your attorney.
- Find a guide: Choose a trusted individual who can help your loved ones gain access to your digital assets. Understanding how to move and offramp assets is complex, and you want to ensure your family has someone they can trust to guide them through the process. Make sure to provide clear instructions on how to access your cryptocurrencies and how they should be distributed.
- Review and update your estate plan regularly: Review and update your estate plan regularly to ensure that it reflects any changes in your digital assets or personal circumstances. If you create a new wallet, be sure to include those details in your digital asset plan to ensure none of your assets are lost. Alternatively use a service like Coast to help you facilitate your beneficiary plan.
By taking the time to set up your plan, you can provide your loved ones with peace of mind and ensure that your assets are preserved. Remember to consult with a qualified estate planning attorney to ensure that your estate plan meets your specific needs and goals. If you’re looking for an easier, automated way to pass on your assets, we’re here to help at Coast.
