Make crypto part of your estate plan

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Over the past few years, cryptocurrencies like Bitcoin, Ether, and even Dogecoin have become increasingly popular. People use them as a substitute for hard currencies like the US dollar, and hold them as assets that they hope will appreciate in value. As their use becomes more widespread, it’s important to start incorporating cryptocurrencies and other digital assets into our estate plans.

Hidden assets

The number of customers in the Brandon, Mississippi area who tell us they have property that their immediate family members know nothing about is far from zero. From shoeboxes full of cash in the back of the closet, to bank accounts without their spouse’s name, to plots of land they’ve bought on the sly, hidden assets are not uncommon. As estate planning lawyers, the Palmer & Slay team work with our clients to ensure that these assets are transferred according to the wishes of their current owners, whether now or after their death.

The assets hidden from us will ultimately be discovered, taxed and distributed after death. It could cause family drama and Uncle Sam could take more of the estate than was necessary with good planning, but things will work out. unless the hidden assets are digital.

Digital assets, and cryptocurrency in particular, can cause many problems if they are not properly included in your estate plan.

The taxman arrives

The Internal Revenue Service (IRS) is stepping up its game to tax the exchange of digital assets. Since the IRS treats cryptocurrencies as property, capital gains taxes and inheritance taxes will be assessed if the value of the assets has increased since their acquisition. Good estate planning can help protect your family from an unexpected tax bill related to the transfer or sale of crypto.

Lost forever

If you are uncomfortable with cryptocurrency disappearing into the air after you die, you should create or update your estate plan to ensure that your digital assets are passed on securely to someone. else.

One of the advantages of cryptocurrency is its security. There is currently no way for someone to force access your account unless they have the necessary keys. However, this benefit becomes a liability if your heirs are excluded from your crypto accounts. Even a court cannot force the opening of your digital wallet.

If you want someone to be able to access your accounts after your death, you must provide the necessary documentation for your heirs to access and control your accounts, in addition to granting permission for such access and control. This means that passwords, instructions and a record of the base cost of assets must be stored securely. This information can be written on a piece of paper or stored on a USB drive that is kept with other estate planning documents in a secure location.

Preserve your wealth. Protect your loved ones.

Palmer & Slay works closely with crypto owners in the Brandon, Mississippi area and beyond who want to ensure that taxes on their digital assets don’t weigh on their family members or destroy their estate plan otherwise. carefully crafted. We also help crypto owners find the best way to securely transfer their assets to someone else upon death instead of leaving them stuck in an inaccessible digital wallet. If you have digital assets that you want to incorporate into your estate plan, Palmer & Slay is here for you. Please contact our office to schedule a consultation.

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