Contact The Firm

What happens to your cryptocurrency when you die?

On Behalf of | Feb 27, 2023 | Estate Planning |

Bitcoin introduced the first cryptocurrency in 2009. About 21% of American adults are or were cryptocurrency owners.

While cryptocurrency has become more mainstream, states are still wrestling with legal issues involving the currency. Many wonder what will happen to their digital currency when they die.

Estate planning challenges of cryptocurrency

The law considers cryptocurrency to be an asset. However, because it only exists in digital form, it can be difficult for surviving heirs to track down. Additionally, you need a private key to access cryptocurrency stored in a virtual wallet. While the executor of your will can track down many types of assets not specifically listed in the will, it may be difficult to locate and access cryptocurrency accounts.

Estate planning solutions

Sharing private crypto keys in your Will is not an ideal solution because it is a public document. Additionally, simply writing the key down on a piece of paper so your heirs can access the account may present problems.

One solution is to move your crypto to an exchange that offers a vault for your private crypto key. Some exchanges offer joint accounts that make transferring your assets to your heirs easier. You could also use a trust account. Whichever options you use, it is a good idea to review the policies of the exchange you have your digital currency on to find out how they handle the management of your account after you die.

Digital assets present unique estate planning challenges. However, there are steps you can take to ensure all of your assets pass on to your heirs when you die.