If you are one of an increasing number of people with cryptocurrencies or noncurrency blockchain tokens, you’ll want to make sure to include these assets in your estate plan so that your heirs know about them and are able to access them. Crypto assets have unique qualities that need to be taken into consideration for estate planning.
First, you’ll need to make sure your heirs know that these assets exist and where they are kept, whether in a cold storage device (such as a USB drive) or in hot storage (such as in an online digital wallet). They typically have no account statements, and your heirs may not be aware that you have crypto assets unless you include them in your estate planning documents.
Next is the challenge of how these assets are transferred. Crypto assets are accessed using a private key which may be 64 digits long and is used to sign transactions by one’s digital wallet. This private key is all your heirs need to access your crypto assets, and these heirs may not need to be appointed executor of your estate to take control of these accounts. If your heirs or fiduciary aren’t left with the private key, though, it’s likely those funds would be forever lost.
Make sure your estate plan details the existence of your crypto assets and the private key for your heirs or fiduciary. You could do this simply by leaving a detailed letter with instructions that is kept in a safety deposit box, or you could use a technical solution such as a “dead man’s switch” (although there are some concerns regarding this method). The best solution for the transfer of your crypto assets will depend on your individual situation, so it’s best to work together with your estate planning attorney to determine the best plan for you. As always, make sure your documentation is kept up-to-date with any changes that may occur.
For help creating or updating your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.