More and more individuals across Texas and the rest of the nation are securing digital assets, such as cryptocurrencies or non-fungible tokens. Yet, studies suggest that many who own digital assets do not include them in their estate plans so that they may pass on their value to other loved ones. Because ownership of digital assets is a relatively new issue, many people are facing challenges in terms of how to transfer, protect or gift them.
According to Barron’s, a survey of about 250 high net-worth individuals revealed that only about 42% had incorporated their digital assets into their estate plans. However, an individual’s age seems to impact how likely he or she is to have done this, with younger digital asset owners more likely to take this step.
Incorporating digital assets into the estate plan
Financial advisors recommend that anyone who has digital assets maintain a strong paper trail outlining where to find them. Digital asset owners should maintain careful records about digital wallets, crypto keys, passwords and whatever else they need to access their digital assets. Someone other than the asset owner should also know how to access digital assets in the event of the owner’s death.
Overcoming challenges associated with digital assets
Distributing digital assets might involve a different process than distributing traditional assets. Thus, owners of digital assets may need to enlist the aid of digital fiduciaries to help them manage these assets and make sure they end up in the right place. There are also important tax implications associated with owning and transferring digital assets that owners must understand.
Failing to properly manage digital assets may lead to financial losses and related hardships.