Tech-savvy people in Lake Charles may have already included most of their digital assets in their estate plan. Things like social media log-in information, access to cloud storage, digital financial information and more should all be listed in a person’s will, but many people still overlook a huge digital asset — cryptocurrency. While this type digital asset is usually prized for its privacy and anonymity, going so far as to leave it out of estate planning can be a mistake.
Most bank accounts are eventually accessible after a person’s death. Cryptocurrency, however, is different. Stored digitally, executors of an estate must have the private key, passwords and additional security details to access the account. Security details are especially important if an account uses two-factor authentication.
Since most people are still unfamiliar with the finer details of cryptocurrency, individuals may also want to include important tax information in their wills. The Internal Revenue Service treats cryptocurrency as property, not currency, so they may be taxed differently than expected. Making sure than an executor has access to related tax information can help prevent a person’s investment from being eaten up by the IRS.
There is currently no legislation in Louisiana that gives power to fiduciaries to take over the management of digital assets. This means that some people in Lake Charles may spend years and significant amounts of money investing in cryptocurrencies only to have them permanently locked away after their death. As the world increasingly shifts toward a more technological age, leaving digital assets out of estate planning can create serious issues for heirs.