Own Crypto? Don't Forget These Estate Planning Steps

Estate planning is important for everyone. However, cryptocurrency introduces a challenge many traditional assets don't have. Even if your loved ones legally inherit your crypto, they may never be able to access it without the right information.

Fortunately, MoneyLion consulted the experts, who suggested a few planning steps to put in motion now that can help prevent digital assets from disappearing forever.

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1. Tell Your Estate Planner You Own Crypto

Many investors keep cryptocurrency relatively private, but that can become a major problem during estate planning. Digital assets should be discussed just like any other significant investment so your estate documents can properly account for them.

Barry E. Janay, Esq., founder and CEO of The Law Office of Barry E. Janay, P.C., pointed out that cryptocurrency is “unique” because heirs need both “legal authority and practical access.” Traditional assets typically only need the legal authority. However, heirs can’t open a cold crypto wallet without a private key, he stressed.

Janay said somewhere between 11% and 18% of bitcoin gets lost permanently “due to lost keys or owners dying without providing heirs instructions on how to access it." Even worse, he noted, “there's no password reset option and a court order would have no consequence because there's no person to obey it."