With artists like Grimes selling millions in NFTs and thousands of newly minted Dogecoin millionaires over the past few months, digital assets, like cryptocurrencies and NFTs have exploded into our collective consciousness. Even people that had never heard of cryptocurrencies and NFTs are now pouring money into them, and many brokerage accounts are now opening up their platforms to these new investments, including designing ETF funds around them. This is why now is the time to add one’s digital assets to their estate plan.
The first reason: unknown future value
According to recent research, the cryptocurrency market alone is valued at over $1.35 trillion. That is a huge number, but what makes this number even more impressive is how wildly that value can fluctuate. Just look to Dogecoin, Ethereum and Bitcoin’s meteoric rise over the past year or so. For early investors, some became overnight millionaires. Indeed, for Dogecoin investors, they could have become millionaires with relatively small investments in the matter of weeks. This is why estate planning for one’s digital assets now is so important. While they may not be worth much, no one knows what they will be worth in the future. And, no one wants generational wealth to slip through their heirs’ fingers.
The second reason: restricted access
Unlike one’s bank and brokerage accounts, one’s cryptocurrency wallet is likely not searchable. In fact, if one’s heirs do not know one has one, it will likely never be found. This is because the cryptocurrency market is largely unregulated right now and wallets may not even be on U.S. websites. Moreover, unlike a bank and brokerage account, cryptocurrencies are decentralized and not backed by a central bank or government, which means that if one loses their password, they may not be able to access those funds, period. Just a quick Google search can show that some have been locked out of their wallets, losing hundreds of millions of dollars in cryptocurrencies.
The final reason: it is an asset, just like any other
While these digital assets may feel less real until we sell them, turning them into “real” money, they should be treated like any other asset. This means including them into an estate plan. And, while one may need to plan for a fortune in transfer, even just ensuring that one’s accounts and passwords are listed in an estate plan can ensure that they at least get transferred after one passes. Of course, to do this, one should contact their San Jose, California, estate planning attorney.