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Cryptocurrency Counselors: Estate Planning for Digital Assets
By: Bitcoin seemed like a fad or something that would fade away over time when it was mysteriously introduced years ago. However, it looks like it is here to stay, as corporations, the mainstream media and our politicians are starting to regularly address it.
You may even be one of the lucky ones that made a fortune from cryptocurrency by investing when it was very speculative; or as the new generation likes to say, you may be “HODL(ing)” them (holding on for dear life) for your children and grandchildren, in hopes that they will continue to increase in value.
In 2021, “Altcoins” are becoming more and more popular as it seems a new one is being developed every day. Altcoins are all cryptocurrencies other than Bitcoin, (i.e. Ethereum, Cardano, Dogecoin). As more people are becoming eager to invest and test the waters of investing in cryptocurrency, in hopes of receiving stellar returns that may outpace the traditional returns in the stock market, estate planning lawyers are starting to see them listed more commonly when reviewing asset lists with clients. Whatever the case may be, estate planning needs to be addressed in order to pass on your cryptocurrency to future generations and beneficiaries with as much ease as possible.
How do I include cryptocurrency in my estate plan?
One thing that ensures an easier passage of cryptocurrency when you pass away is making sure that your estate planning documents are up to date and contain the correct language pertaining to digital assets. Check your estate planning documents to see if your fiduciaries have the proper powers enumerated to them under Florida Statute.
The Florida Fiduciaries Access to Digital Assets Act (“FFADAA”) applies to fiduciaries in estate administrations and applies to cryptocurrencies and the wallets/exchanges that they may be held in. Under this statute, fiduciaries are given authority to manage digital assets. However, duly-appointed fiduciaries are only provided these statutory powers, if they are expressly granted by the Testator, Settlor, or Principal, in their Last Will and Testament, Trust Agreement and/or Power of Attorney.
Florida Statute can trump a tech company’s TOS (“Terms of Service”), which will allow the company to communicate with a duly-appointed fiduciary and remove the company’s liability under federal laws that traditionally protect privacy and prevent against potential identity theft. Florida is one of the states that has enacted laws to provide easier access for fiduciaries in regard to online accounts and promote fiduciary access to digital assets.
The FFADAA makes it very clear that duly-appointed fiduciaries have the right to access the decedents’ digital accounts, and the ability to fulfill the terms, intent and distributions specified in your estate plan, which benefits owners of cryptocurrency.
While some of the differences between a will and trust are subtle; others are not. Those needing estate planning assistance may contact me at anthony.cetrangelo@henlaw.com or by phone at 239-344-1358.