Estate Planning Law

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Each state has its own laws regarding trusts, estates and probate requirements.

If you want to have greater certainty of bequeathing cryptocurrency to your heirs, you will need to provide specific and detailed written instructions in your estate planning documents. The information that you will need to include will depend upon the type of virtual currency wallet that you have.

There are wide range of cryptocurrency wallets that are available at this time The current types of cryptocurrency wallets include: (i) a single device software wallet in which you hold the private keys (example: bitpay wallet), (ii) a multiple device web wallet in which you hold the private keys (example: blockchain wallet), (iii) a multiple device web wallet in which you do not hold the private keys (example: coinbase wallet), (iv) a USB hardware dongle wallet in which you hold the private keys (example: trezor wallet), and (v) a "paper wallet" in which the private keys and public keys are written down (which can be later loaded into a software wallet of your choice to be spent).

The instructions that you provide in a will (for your personal representative) or in a declaration of trust (for the successor trustee of a revocable living trust) should be written in a manner that is easy to understand for individuals who are not familiar with cryptocurrency. For example, in the case of a single device software wallet in which you hold the private keys, instructions could include (i) a description of the name and version of the wallet software, (ii) a description of the name and version of the operating software system of the wallet device (i.e., iOS, Android, MacOS, Windows or Linux), (iii) a description of the types of virtual currency held by the wallet, (iv) either the long-form private and public keys for the wallet or the 12 word "seed" BIP39 or BiP44 recovery phrase for the wallet, and (v) step-by-step instructions (which may include screenshots) showing how the wallet can be restored onto a new device, if the current wallet device cannot be accessed.

As transfers from a bitcoin wallet are irrevocable, private key information about your cryptocurrency accounts will need to be kept in a secure manner. Security can enhanced by storing the private key information in a safe-deposit box or vault, which could only be accessed after your death by the personal representative designated in your will (or the successor trustee designated in your revocable living trust).

This website provides general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to retain an attorney for advice on specific legal issues.

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