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Cryptocurrency in a PA Estate Plan

Posted on Thu Apr 25, 2024, on Estate Planning

From Our “Ask a Question” Mailbag: “I am considering developing an estate plan and am collecting information about my assets for my family. My children will know about my house and bank accounts, but I have also invested in Cryptocurrency. How will my Executor or Agent access my Cryptocurrency after I become incapacitated or pass away? Should I include cryptocurrency information in my estate planning documents? How do I address Cryptocurrency in a PA Estate Plan?”

Cryptocurrency in a PA Estate Plan

Paige Zirrith, Estate Planning Attorney

Should I Include Cryptocurrency in a PA Estate Plan?

Since the inception of Cryptocurrency in 2009, it has become an increasingly common way for
investors to diversify their portfolios. Cryptocurrency is a digital currency that has gained popularity
because of the absence of government regulation. With a lack of faith in large banking institutions,
people turned to cryptocurrencies like Bitcoin and Ethereum. However, this same lack of
regulation that enticed investors to acquire Cryptocurrency can make it extremely difficult to
access a loved one’s accounts after their passing. For this reason, discussing your
digital assets with your attorney is essential to determine how to incorporate your Cryptocurrency into a PA
estate plan.

Does Cryptocurrency in a PA Estate Plan Present Unique Challenges?

Cryptocurrency is a relatively new concept, and financial institutions and government agencies
are still assessing how it will impact the financial landscape. The features of Cryptocurrency that
make it desirable to many investors present unique difficulties in administering
one’s estate or processing probate. When someone dies, the estate executor will notify the bank of
their passing and submit documentation to close and liquidate the account. For
Cryptocurrency, there is no bank to contact to facilitate this process. There are also no joint
accounts or beneficiary designations, making liquidating bank accounts more straightforward.

In Pennsylvania, it is illegal to access your loved one’s digital assets after their passing unless
you are authorized to do so. Family members can be put in a difficult situation trying to access
Cryptocurrency: Incorporating your Cryptocurrency into a PA estate plan is essential to make
the accounts accessible.

What Documents Should I Address My Cryptocurrency in a PA Estate Plan?

Young people have flocked to cryptocurrency investing, with Gen Z investors being more likely to invest in Cryptocurrency than stocks. While it may be difficult to imagine, these young investors need to consider how their Cryptocurrency will be managed if they become incapacitated or pass away. Several documents can be tailored to your unique situation to address Cryptocurrency in a PA estate plan. A Last Will and Testament drafted considering Cryptocurrency can assist your family in managing these assets after your death. A carefully drafted Power of Attorney can ensure that the proper person handles your Cryptocurrency during your incapacity. It is essential to consider the person who will be granted this fiduciary duty and that they understand the world of Cryptocurrency.

How Should I Prepare to Handle My Cryptocurrency in a PA Estate Plan?

Addressing your Cryptocurrency with your family members and eventual
beneficiaries is essential while you can still plan for it. The person designated to access your accounts should
be someone who knows what digital assets you hold and how. Anyone who has invested in
Cryptocurrency knows that their “key” must be kept secure. A string of characters, a
crypto key, grants access to one’s cryptocurrency accounts. Without the key, your Agent or
Executors will have an immense amount of trouble accessing your accounts. On the other hand,
an unauthorized person getting your crypto key would cause you a great deal of trouble during
your lifetime, so it must be accessible but secure.

A Will becomes part of the public record when it is probated in Pennsylvania, so it is important
not to include your crypto key in the Will document. An estate planning summary could be
used to identify your digital assets and provide instructions on how those authorized to do so
should access them upon your incapacitation or death.

In Conclusion: How Should I Include Cryptocurrency in a PA Estate Plan?

We hope you found this short article about Cryptocurrency in a PA estate plan helpful. Contact us
If you want to know more or need our help creating an estate plan tailored to your needs,
Let our estate planning lawyers help you walk you through what can be a confusing process. Feel
free to contact our office for a free consultation. 

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Article by Attorney Paige Zirrith.

Tags:

Cryptocurrency, Estate Planning Lawyer

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