Navigating Cryptocurrency in Estate Planning

If Benjamin Franklin were alive today, he might have added another certainty to his famous quote: cryptocurrency planning. As cryptocurrency continues to gain prominence, it’s crucial to address their inclusion in wills and estate management.

The Crypto Conundrum

Imagine this scenario: Your will includes cryptocurrency holdings. Who will handle these cryptocurrency assets? How do you ensure their secure management, accurate valuation for probate, and seamless distribution? And beyond that, do your beneficiaries even know how to navigate the world of crypto once they inherit it? This is where Charlton Baker's expertise can help.

Here's some helpful tips on How to Prepare Your Crypto Estate for the Future

Document Your Crypto Holdings

• Begin by creating a comprehensive list of all your crypto assets. Include details such as wallet addresses and private keys.
• Store this information securely in multiple locations. Consider using traditional methods like pen and paper to record your keys for executors and heirs.

Legal Considerations

• While technical accessibility is essential, don’t overlook the legal aspects.
• Remember that without crypto keys, a court order is ineffective. Ensure that your heirs have the necessary information to access your crypto assets.
• Make at least two copies of your asset records and store them separately. Regularly update these lists, especially if you actively trade or invest in cryptocurrencies.

Include Crypto Assets in Your Estate Plan

• Treat your crypto holdings like any other valuable asset. Create a crypto estate plan similar to traditional estate planning.
• Specify what should happen to your crypto assets upon your death or incapacitation.
• Here at Charlton Baker, we can assist in drafting your Last Will and Testament to include your crypto assets.

Consider Trusts and Legal Structures

• If you own significant amounts of crypto, discuss with us whether establishing a trust would be beneficial for you. This can protect your assets and streamline the transfer process.
• We can also review other legal structures such companies, joint ownership etc for managing crypto assets.

Support for Executors and Trustees

• Provide comprehensive support to the executor or trustee who will handle your crypto estate.
• Ensure they understand the technical aspects and have access to necessary information.

Support for heirs

• The problems may not end after probate and distribution of cryptoassets, there may still be a few issues to overcome e.g:
• Crypto beneficiaries may be experiencing crypto for the first time.
• The unexpected recipients of crypto might be unaware of how exchanges and wallets operate.
• Charlton Baker can assist with:
  • Wallet management
  • Exchange accounts
  • Cashing out to the bank
  • 1-2-1 Education and training sessions

Remember that crypto estate planning is essential to prevent your digital assets from being lost or inaccessible after your passing. Here at Charlton Baker, we can tailor a plan to your specific situation, to not only include professional tax advice, but the drafting of your Last Will and Testament to incorporate any such planning. By taking these steps, we can ensure that your crypto legacy is preserved for generations to come. 

Our Wealth, Wills and Probate services cover:

Will Writing Service

Lasting Power of Attorney

Probate

Inheritance Tax Wealth Reviews

Trust Tax & Advisory

Give one of our expert Wealth, Wills and Probabte team members a call on 01380 723692 or send them an email for an informal chat.  

We also know Crypto and can be your comprehensive and expert tax guide at all levels of complexity – from cryptocurrencies and NFTs, to trading and DeFi.

You can find out more about our Crypto Tax services here. 

Or give our expert Crypto Tax team a call on 01380 723692 or send them an email for an informal chat.  

We have several blog articles that might be of interest:

Banking and Crypto

Disclosing historic cryptoasset tax liabilities

UK Government Crypto Activity – 2023 review