ESTATE PLANNING FOR CRYPTO CURRENCY
The estates of some early Bitcoin adopters have accidentally lost millions of dollars in virtual currency, merely because no one knew that the deceased had the property.
Crypto currencies, also known as virtual or digital currencies, are becoming increasingly popular. Billions of dollars in various currencies are owned by people all over the world.
The majority of people, however, still have no idea what these currencies are or how they work. That has proven to be a major problem for many estates, since the families of the deceased do not know their loved ones had the currency or do not know how to access the accounts.
Most of the time there is no central database that can be checked either, since most digital currencies are held anonymously. Instead, the owner has unique passkeys that are used online to access the accounts.
These passkeys can be stored online in central databases or they can be stored offline on computer drives, as Lexology points out in "Every Day is Bitcoin Pizza Day: What Clients and Estate Planners Need to Know about Virtual Currencies."
What does this all mean?
People who use virtual currencies need to be sure they talk to an estate planning attorney about their holdings. It needs to be clear in an estate plan what currencies are held and where to find the passkeys.
It should also be clear who is to inherit the crypto currency holdings.
This also means that estate planning attorneys should ask their clients whether they have any digital currency holdings and not just rely on the clients to volunteer the information.
The clients might not know about inheritance issues with the accounts.
Reference: Lexology (Sep. 6, 2017) "Every Day is Bitcoin Pizza Day: What Clients and Estate Planners Need to Know about Virtual Currencies."