Millennials have complicated everything. Socializing in person wasn’t enough, so they created Facebook. Dollars weren’t enough, so they created Bitcoin. Every new app, technology or cryptocurrency brings with it more uncertainty legal uncertainty around these digital assets. Are they currency? Are they property? Can they be gifted? Can they be inherited? Will they receive a step-up in basis? Will they be included in the estate for estate tax purposes?
In 2017, Texas enacted the Revised Uniform Fiduciary Access to Digital Asset Act under SB 1193, our state’s attempt to give internet users some ability to give their agents and executors authority to access their digital assets through powers of attorney and wills. Unfortunately, access does not necessarily equate ownership so further steps may need to be taken. For example, cryptocurrencies like Bitcoin are composed entirely of computer code. Ownership is wholly tied to a private key, which is a 256-bit alphanumeric password that is cryptographically determined. If this private key is lost, no amount of access will allow ownership of these assets to be transferred.
If your estate plan does not employ new strategies to address new technology and digital assets, your heirs may not have access to them. Just last year I had a client who, prior to passing away, saved an excel spreadsheet with a list of passwords to everything for his family. Unfortunately, the family couldn’t use it because he forgot to write down the one password they would need to access his spreadsheet – his work computer login.
So what should you do to make sure your heirs can access your digital assets?
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