What happens with your cryptocurrency if you get disabled or die? Cryptocurrency is hard to keep track of during life and at death, and many people do not understand this type of digital asset. The importance of keeping track of your cryptocurrency during life involves keeping good records of your trading history, choosing the right exchanges and being secure, staying aware of updates on exchange policies and tax law, and tracking wallet addresses for coin, token, and mining transactions. How do you do all this? With great estate planning.
Our suggestions include choosing exchanges that provide transaction history or using a cryptocurrency tacker, to make your life easy when it comes to taxes. Using a password manager to generate strong passwords which are not reused. Exercising your duty to follow exchange policies. Recording wallet addresses for your records is critical. The real key is to prepare early to save your family a lot of trouble later and avoid costly mistakes with lost cryptocurrency.
Our Cryptocurrency Trust is a trust specifically designed to help you do all of these things during life and if you become disabled or die, your cryptocurrency will not be lost forever. Gerald Cotton, a 30-year old entrepreneur in Canada who died unexpectedly, lost $145 million of Bitcoin because he did not have proper planning. Matthew Mellon, from the famous Mellon U.S. banking family, died and left $500 Million in Ripple lost forever because he did not have proper planning. These are large, publicized cases with no estate planning. How many more smaller cases exist and how much more cryptocurrency is lost by many individuals? Do not let your investment be lost if you become disabled or die.
Using a Cryptocurrency Trust can help protect you against misuse of your assets by others and it can give you recourse against those who may try to exploit you in the event you become disabled. At death, a Cryptocurrency Trust can help provide for organized access, retention, and transfer according to your wishes. Cryptocurrency may also have a procedural advantage over other financial assets in an estate. A traditional bank or investment broker usually require the fiduciary (executor) to produce an original death certificate and court papers in order to take control of accounts in the deceased owner’s estate. Cryptocurrency requires only passcodes but is subject to misuse and abuse. Estate planning with our Cryptocurrency Trust can help mitigate the potential for such misuse and abuse.
Taking care of your cryptocurrency requires knowledgeable estate planning attention early so these assets are not lost forever at disability or death. If you have questions, contact Anderson & Jahde for competent, professional tax help.