In 2018, Florida investors who participate in the world of cryptocurrency trading are holding tight for what could be the next major Bitcoin rally. The market corrections experienced this year could pave the way for a gradual recovery as digital currencies continue to mature and become more mainstream.
As the situation currently stands with a Bitcoin being worth nearly $7,000, it is reasonable to treat these digital tokens as valuable assets that should be part of estate planning strategies. The Florida Fiduciary Access to Digital Assets Act was enacted in 2016 for the purpose of determining how probate courts and executors should handle digital assets, which include more than just cryptocurrencies.
It should be noted that access to online accounts, electronic devices and digital assets is as important as their disposition. In the case of estate plans that feature irrevocable trusts, for example, the grantor should not only deposit Bitcoin into the trust but also give trustees access to their digital wallets as well as the encryption keys.
Hardware cryptocurrency wallets may present a challenge with regard to estate planning. Say, for example, that a Florida investor keeps her Bitcoin, Ethereum and Ripple holdings in a USB wallet equipped with biometrics security such as a fingerprint reader. In this case, a sensible estate plan may call for switching to an online digital wallet and writing down the crypto keys on a few pieces of paper.
In the future, online brokerage accounts may run on blockchain platforms secured by crypto keys; this will require estate planning strategies to pass these access credentials to heirs and trust beneficiaries. Other digital assets to think about may include cloud storage folders and the content generated within social media accounts.
Source: Forbes, “Estate Planning For Crypto And Other Digital Assets: What You Need To Know”, Ted Knutson, 08/14/2018