With the digital age, entrepreneurs and technology-lovers alike have poured unprecedented time, labor, and resources into the development of alternate, internet-based economies. Now, in today’s modern world, physical currency is no longer the only accepted mode of exchange. While many financial advisors continue to regard cryptocurrencies such as Bitcoin with caution, many people have made veritable fortunes with them.Among RUFADAA’s most novel additions to the state Probate Code is a section allowing California residents to use traditional estate planning strategies to legally transfer digital assets to designated beneficiaries.
Transfers Under RUFADAA
Under RUFADAA, the writer of a will or creator of a trust could grant an estate executor:
- Access to a virtual account or accounts
- Partial access to an account, allowing them to distribute or transfer assets to heirs
- Resumed access to an account they would have been able to use if the grantor were still alive
RUFADAA could provide a streamlined, safe, and legal route for cryptocurrency investors to share their digital wealth with friends, family, and preferred charities.
Why You Need a Plan for Cryptocurrency
Although California’s Probate Code now accommodates digital assets, cryptocurrency-based estates can still encounter unexpected obstacles.
Possible Problems With Cryptocurrency
- The anonymity of blockchain-based transactions, and a lack of any central regulatory authority, means that cryptocurrency investors must leave detailed instructions to their executors on how to access and disburse their digital assets.
- Since cryptocurrency is still a relatively recent innovation, the value of individual coins is anything but stable. The value of a single Bitcoin has, for instance, fluctuated tens of thousands of dollars in the past decade alone. If a cryptocurrency’s trading price falls or rises by a substantial margin, heirs may be impacted by federal capital gains taxes.
- Estate executors have a legal obligation to act in the best interest of the estate. However, many potential executors—including many estate planning attorneys—lack the knowledge, skill, and experience needed to manage cryptocurrency effectively.
The Law Firm of Kavesh, Minor & Otis, Inc. can help you prevent any unwanted challenges to a digital estate. Our experienced team of attorneys constantly monitors new developments in technology, investing, and estate law, ensuring we have the tools needed to safeguard non-traditional estates.
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