With an estimated $2 trillion invested worldwide in cryptocurrencies, the need to plan for these assets is real.   Whether an investment in cryptocurrency is small or large, it is critical that it be accounted for within your estate. 

The importance of planning for crypto lies in this currency’s allure.  The same reasons investors are often drawn to cryptocurrency, such as its decentralized private nature and potential for rapid growth, make accounting for it vital.  Unlike a traditional investment, cryptocurrency operates without customary parameters and the involvement of intermediaries.  Instead, a cryptocurrency transaction is verified on the blockchain, a digital decentralized ledger, and once the transaction is confirmed, it cannot be reversed.  

Crypto’s structure thus eliminates the need for financial institutions to facilitate transfers, which is why crypto proponents argue that it is the most secure method of transferring assets as it prevents double-spending and fraud.  It is also why it is essential to identify these investments in an estate plan for the benefit of executors and trustees, who would otherwise be unable to ascertain this information through intermediaries like financial institutions.  It is equally important to direct executors and trustees on how to access your crypto investments.  

While this may sound like a small housekeeping matter, it most certainly is not given the unique way in which this currency is transacted.  Each cryptocurrency transaction is processed using a long string of alphanumeric characters called a key system.   The crypto owner sends the currency to the receiver’s public key and the owner signs off on the transaction using his or her private key.  If a private key is lost or stolen, the owner, depending on the storage method, could very likely lose access to his or her cryptocurrency forever living up to the countless horror stories of lost funds.  Private keys, in other words, are the passwords that allow you to access and manage your crypto funds.  Therefore, executors and trustees must be able to access your private keys. 

Cryptocurrency might be best known for its large valuation fluctuations.  In 2020 alone, Bitcoin varied from a high of $29,000 per Bitcoin to a low of $4,000 per Bitcoin.  As with other assets, there are a variety of estate planning tools that can be used to best accommodate the volatility of cryptocurrency which is a yet another compelling reason to have a comprehensive estate plan in place.  For more information, please contact Lauren R. Cimbol ( or another BW attorney.

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