Cryptocurrencies Can Confuse Florida Estate Plans
As cryptocurrencies have proliferated, while growing in popularity as an investment or speculation vehicle, laws, regulations and attorneys have struggled to keep up. Currently, the IRS treats cryptocurrencies, such as Bitcoin, Litecoin and Ethereum, as property rather than as currency. However, as agencies rush to regulate such cyber funds, the laws and rules surrounding them are certain to change. This, in turn, makes planning for estates that include cryptocurrencies a rather dynamic process.
The ever-increasing number of cryptocurrencies has also resulted in burgeoning numbers of new investment vehicles that purport to take advantage of them. These range from IRA custodians who offer to invest directly in such currencies to mutual funds and other vehicles that are pegged to the value of Bitcoin and/or other cryptos.
When it comes to estate planning, there are a number of things to consider even beyond investments or how cryptocurrencies are treated for tax purposes. For example, unless the keys, codes and account information for wallets are left behind, any cryptocurrencies included in an estate could be forever lost to the beneficiaries. For this reason, it is essential to keep estate documents up-to-date with all of the information needed to access a testator's cryptocurrency accounts.
Before bequeathing Bitcoins or emending an estate to accommodate your extra Ethereum, an individual should discuss the move with a seasoned estate planning attorney. The attorney can look at your estate as a whole and help to understand where the cryptocurrency best fits into the plan. Ensuring that it's accounted for is certainly wise, but as laws evolve and cryptocurrencies proliferate, seeking an attorney's advice is the wisest course of action.
Rignanese & Associates is available to work with clients on their legal needs. Please reach out to us at 863.294.1114.
1. On behalf of Kelly Kennedy of J. Kelly Kennedy, Attorney/CPA, PLLC which has been acquired by Rignanese & Associates, PLLC.
Source: The CPA Journal, "Planning for Collectibles," James R. Grimaldi, James A.J. Revels and Sidney Kess, Mar. 6, 2018