By Tiffany L. Haliburton
Do You Aspire to Become a Bitcoin Billionaire? Beware That Without Proper Planning, Your Heirs May Not Be Able to Cash In a Dime!
Are you one of the over 33 million Americans who owns cryptocurrency such as Bitcoin? The number of people investing in digital currency is on the rise, especially among those aged 55 and older. Most people who own cryptocurrency use it as a form of investing because of its escalating value.
What is Cryptocurrency?
In 2020, Bitcoin prices increased 224 percent! For those of you who aren’t familiar with cryptocurrencies, they are secure mediums of digital exchange that aren’t regulated by any governing body such as the United States or the European Union. Cryptocurrencies are not traceable because they use a technology called blockchain. Blockchain is a system that spreads globally across many computers that manage and record transactions. Blockchain makes cryptocurrency very secure because it serves as the foundation for the user’s digital wallet, which stores the owner’s private key, granting them access to the digital currency.
Buyer Beware!
The very same digital wallet that protects your assets during your life can lock your heirs out upon your death if you do not make the proper provisions in your estate planning. The challenge is that you should absolutely keep your private key secure while you are alive, but, you need to provide a method for your heirs to access your digital wallet once you pass away. Please note, if you do not pass your private key along to your heirs, all of your cryptocurrency will be lost! Failing to pass along your private key could prove devastating to your estate plans if you own a substantial amount of cryptocurrency.
Unlike all other assets, cryptocurrency does not have a third party holding the asset. For example, banks hold money, real estate deeds etc. If one of these assets are accidently left out of a trust or will, the mistake can be fixed by petitioning the Probate Court to include the property in your estate. However, there isn’t a court order in the world that can recover the private key known only to you after your death!
Don’t Panic!
There are steps you can take to protect your heirs and ensure your cryptocurrency is passed on. The key is to ensure that your wills and estate plan provide for disclosure of your digital currency, and plans a secure method to transfer your private key to your heirs. The important thing is that you work with an estate planner to implement a solution to protect your valuable assets for your loved ones after you pass away. Many of us spend a lifetime saving and investing to fund our futures and the futures of our children, grandchildren, and other loved ones. Proper estate planning ensures that all of the hopes, dreams, and aspirations that we have for our heirs during our lifetimes can continue after we are gone.
About MT Paralegal & Consulting for Wills & Estates
If you would like to learn more about how to protect your cryptocurrency and other assets, please reach out to us. MT Paralegal & Consulting for Wills & Estates can assist with securing assets for your heirs by avoiding probate if you hold Bitcoin or invest in any cryptocurrency. We look forward to hearing from you! MT Paralegal provides Wills and estate planning paralegal services. We assist fiduciaries in closing estates in a timely, transparent, and cost-efficient manner. Reach us at 240-230-7925 or michelle@mtparalegal.com to learn more.
