Back in the olden days before the advent of the Internet, estate planning revolved around the transfer of physical objects and hard copy records. There were no virtual forms of property, but now, things are very different, and they are evolving all the time.
With this in mind, we will look at digital estate planning with an eye on cryptocurrency in this post.
Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)
An agent under a durable power of attorney is empowered to manage assets after someone becomes incapacitated, and an executor is an estate administrator. Up until relatively recently, there were no laws on the books that allowed an agent or an executor to take control of digital property.
The whole dynamic existed in a gray area, and as a response, the Uniform Fiduciary Access to Digital Assets Act was established in 2014. After a close examination, privacy and civil rights activists protested. They contended that the UFADAA gave agents and executors too much authority.
Half the states in the union considered the first version, but only Delaware adopted it. As a response, it was revised to impose limits that satisfied the dissenters. New York adopted the RUFADAA on September 19, 2016, and it became part of the New York Estates Powers and Trust Law.
Though the law can be invoked when necessary, if you want your executor and/or agent to be able to access your digital information, should make it clear when you are planning your estate.
First, you should give the representative access to login information for all the accounts that you want them to manage when it becomes necessary. This can be done through a simple letter or note.
You would not want to put the specific access information in a last will, because the document would become public. However, you would clearly state that you do want to grant access to this information to the representatives.
This is a general explanation. When you discuss your situation with a licensed estate planning attorney from our firm, we can help you gain a full understanding of the details and explain your options to you.
Estate Planning for Cryptocurrency
Just when you think that the laws are catching up to the technological realities, something new enters the picture to muddy the waters. This has been the case with cryptocurrency and the laws as they apply to the estate planning process.
This form of currency has monetary value, but it is strictly digital. It can only be transferred through the utilization of block chain technology. It should be noted that for tax purposes, the IRS treats it as property rather than currency at the present time. This is an important consideration, because there can be losses when transfers are consummated, and there can also be gains.
In a hand to mouth sense, it is extremely easy to facilitate the transfer of cryptocurrency when you are planning your estate. You simply have to give the administrator access to the pass code. According to the American Bar Association, this must be done in light of certain laws that are in place to prevent fraud, preserve privacy, and protect data.
Schedule a Virtual Consultation Today!
If you are in possession of digital property and/or cryptocurrency, it is important to work closely with an experienced attorney to facilitate transfers in the optimal manner. We would be more than glad to assess your situation and help you put a plan in place that properly addresses all of your asset transfers.
These have been trying times for all of us, and adjustments have been necessary on many levels. Fortunately, this is an area where technology can come to the rescue. We are offering virtual consultations over the phone and through teleconferencing, so we are still here for you.
To set the wheels in motion, you can send us a message through our contact page, and we can be reached by phone at (585) 546-1734.