Bitcoin may have lost more than 50% of its value since its peak in November but that doesn’t mean cryptocurrency or related assets are losing popularity. Last year was a breakthrough year not just for crypto, but for NFTs, Coinbase stocks, crypto mining, and a long list of dependent sectors. Significant advances in artificial intelligence (AI) have also led to emergent opportunities that sit at the interface of AI and crypto. The market may be down but digital assets are on the up and up and up which means knowing how to protect them has never mattered more.
Estate Planning Around Cryptocurrency, NFTs, and Other Digital Assets
The more things change, the more things stay the same. Digital assets may be complex but they still need to be accounted for in the same way as their traditional counterparts. The first step to estate planning is making a list of everything you own. Nothing more sophisticated than a pen and paper is needed and yet when digital assets are involved you need to widen your view on what might be an item of value.
Of course, cryptocurrency investments, NFTs, and related items like Coinbase stock all need to make the list but so do other, less obvious but equally important digital assets. Do you run an influential social media account? Do your tweets represent a modern-day sort of journal descendants might treasure? Are important documents related to your finances or business interests stored in the cloud?
Listing your assets now means taking note not just of all financial instruments and property, but important passwords, log-in credentials, and social media profiles, too.
Once accounted for, the next step is to provide detailed instructions explaining how best to manage your digital assets as well as everything else you own. This does not just mean articulating who should receive what but also includes crafting a management plan for each item on your list. Just as beneficiaries need to know what you wish to come of your home, car, boat, or baseball card collection, they also need to know what to do with your gallery of Cool Cat NFTs.
Some complex assets might be best sold as cash will be easier for beneficiaries to manage. Others designed as long-term investments may require careful instructions to ensure their value is retained.
Protecting digital assets through estate planning is not just about making sure your loved ones are aware of your online assets and know how to manage them, however. It is also about working with experienced counsel to ensure beneficiaries are legally able to access these items.
Cryptocurrency, NFTs, and any other assets related to blockchain technology are designed to remove the need for traditional financial regulation. This grants them unparalleled versatility but it also means traditional planning tools may not be enough to ensure their proper distribution.
To learn more about the fast-growing world of digital asset legislation, do not hesitate to reach out to the Estate Planning Law Group of Georgia either by calling 770-822-2723 or using the contact form on our website.
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