Bitcoin and other cryptocurrencies are constantly in the headlines these days across the country. In the span of only a few years, cryptocurrencies have grown from novelties to legitimate ways to create and secure wealth. Those who jumped into Bitcoin and other cryptocurrencies early on may now be sitting on portfolios worth millions. Just like any asset, cryptocurrencies can be passed down to heirs with the proper estate plan. Here’s how those in Michigan can use estate plans to protect and secure their cryptocurrency portfolios.
When it comes to protecting cryptocurrencies, a safe and secure transfer upon the owner’s death is crucial. Most cryptocurrencies are kept in a digital wallet and retrieved via a private key known only to the owner. The person who has the private key can sell or use the cryptocurrency which can make it susceptible to theft or loss. In most instances, basic estate planning documents such as will won’t be sufficient to ensure digital assets and private keys fall into the right hands. Ultimately, the best estate planning strategy for cryptocurrencies depends on the nature and value of the assets.
Forming an estate plan for cryptocurrencies
The focus of an estate plan for crypto-assets is ensuring that the owners leave ways for their loved ones and beneficiaries to be able to find and also access their cryptocurrency portfolios and accounts. Trusts are good estate planning options for crypto owners. In a trust, the owner would be able to transfer crypto-asset ownership to the trust. They could then designate a loved one to serve as trustee.
Including cryptocurrency in an estate plan can understandably make the process more complex and complicated. Utilizing the services of an estate planning attorney is recommended. Those in Michigan who have questions or want to know more about asset protection or any aspect of estate planning could obtain much-needed guidance and clarity by consulting a knowledgeable legal representative.