The popularity of cryptocurrency has skyrocketed within the last few years, with its market topping $3 billion in late 2021. Cryptocurrency, which is a form of digital currency, isn’t like traditional assets that are managed by a bank or other financial institution. Instead, it lives on an immutable public ledger called a blockchain.
Even if you’re new to cryptocurrency, it’s important to consider long-term implications, such as what will happen to it when you die. Unlike traditional assets that you can just allocate in your will, cryptocurrency involves some additional information for your beneficiaries to access.
When you create your will, consider naming a tech-savvy executor who knows how to navigate aspects involving cryptocurrency. To ensure that your loved ones can inherit the cryptocurrency, you must include the following:
- List all cryptocurrencies in your will. Be sure to tell your beneficiaries what type of cryptocurrency exists.
- Provide information about your digital wallets in your will. Your digital wallet describes where beneficiaries can find your cryptocurrency. Make note if it’s only accessible on a computer or smartphone.
- Create a memorandum in your will that has PINs and passwords. As wills go through probate, they become part of public record, so be careful about how much information you provide. That’s why you should add it in a memorandum, which is a separate document that typically doesn’t become a public record.
- Include a step-by-step guide as to how your beneficiaries can access your cryptocurrency. While you might be familiar with how to access your cryptocurrency, your beneficiaries might not be. Leave plain language instructions to remove some of the stress and frustration.
Leaving cryptocurrency to your loved ones is a thoughtful gesture, but it takes additional planning when compared to traditional assets. Taking a few steps now can simplify the process for your beneficiaries to ensure they receive your digital currency. If you have further questions about how to allocate cryptocurrency assets in your will, reach out to a financial advisor.
Sources: Kiplinger.com, Nolo.com, Pooleshaffery.com, Time.com