Here for YOU Today and There for your FAMILY Tomorrow

When Bitcoin and Digital Assets are Part of the Estate


Bitcoin and Digital Assets

Whether you think bitcoins are the global currency of the future or a financial disaster, many Americans have bitcoins, and practically all Americans have digital assets of some kind. Estate planning today needs to address these assets, and an article in Coin Journal, “The 7 Steps of Estate Planning for Bitcoin and Other Digital Assets,” offers some useful tips.

  1. Conduct an Inventory of What’s Already Owned. Make sure that you have a good idea of what you really have. People often forget about bitcoin in an old wallet, only to find it later. It is also important to list all of the digital assets currently owned and to write down how each specific asset can be accessed in the future.
  2. Separate Your Assets into Tiers. Divide up your digital assets into three tiers: (i) easily spendable; (ii) mid-range storage; and (iii) long-term cold storage. Don’t lock up all of your bitcoin, because you might want to spend it.
  3. 3: Create a Plan for Each Tier. After you set up the tiers, create a plan for each of them. Think about balancing security, ease-of-use and accessibility. In addition to seeing what’s already working, a digital assets owner should also consider options that have stronger security protections. Some of these are hardware wallets, multi-factor authentication and multi-signature addresses.
  4. Determine Who Gets What. Here’s the actual estate planning–deciding who gets what. Remember that you need both a tech plan and a legal plan for digital assets. Give a percentage of each tier to specific people, so they can avoid the unpredictable price fluctuations that would result from leaving specific amounts of specific digital assets for each person. Be certain that your heirs can access the digital tokens. Therefore, you must give them access to critical information. Such information includes passwords or the location of a hardware wallet. In addition, speak with an estate planning attorney about state laws on leaving digital money to heirs.
  5. Test the Plan. It’s critical to test the estate plan from the viewpoint of the owner of the assets and the heirs. Start with a very small value for the tests to limit losses, if something goes wrong. You should test every possible scenario of the plan’s outcome, not just the most likely outcomes.
  6. xecute Your Plans.Move ahead and implement the plans. In addition, set up regular audits to make sure the funds are always accessible.
  7. Protect The Plans. This includes storing plans in a location that is access controlled, tamper-evident, fire and water proof and with some degree of redundancy. Don’t store these assets in the family safe, since if something happens, you—and your heirs—could lose everything.

Do you live in Miami-Dade, Broward, or Palm Beach counties in Florida? Laws are constantly changing-- has your estate plan been reviewed in the last 2-3 years? Call me (954-888-1747) right away for peace of mind. I can help!

  • My practice is exclusively estate planning and probate,
  • I have prepared numerous estate plans in 16 years of practice,
  • I have administered estates and trusts through Probate all over Florida,
  • I am a Certified Financial Planner Professional™, and
  • I am here for YOU today and there for your FAMILY tomorrow.

Reference: Coin Journal (April 21, 2017) “The 7 Steps of Estate Planning for Bitcoin and Other Digital Assets”

Why would we recommend D.T.F.? Several Reasons: Your ability to explain complex estate problems, clearly and patiently; your total lack of arrogance and pretense; a strong feeling that you are motivated by what you perceive is best for your client, rather than what would generate the largest legal fees; finally, and importantly, you are a lovely guy. A.C.

Two words cannot sum up the entire process of creating my “trust.” I enjoyed your attention to detail, your patience of explaining terms and conditions until I understood, also giving me copies to read and understand. Thank you for your suggestions on what was best for “me” but still allowing me to make my choice. Most of all, thank you for thinking of “me.” Wells Fargo said “you were the best” I cannot deny that. Again thank you very much for everything. Anna is an asset or a compliment to the firm. She is warm and very caring. It was great doing business. Thank you.