Digital assets are emerging as a new source of investment and wealth for individuals all across the United States and even the world. In New Jersey, residents may not be familiar with cryptocurrencies like Bitcoin and other online only resources that individuals may keep in their digital wallets. Cryptocurrencies are not physical tokens or other tangible items that holders may trade; transactions using digital assets like cryptocurrencies occur online and through secure blockchain interfaces.
Unlike traditional money that may be held in a bank and taken out at the owner’s discretion, digital assets simply do not exist outside of the digital domain. The value of digital assets fluctuates and, due to the structure of digital transactions, the transfer of ownership of cryptocurrencies can be complex. All of these and many other reasons may complicate the estate planning wishes of individuals who choose to invest in these emerging financial tools.
Individuals who choose to own digital assets should be prepared to address them in their estate planning documents. They may be more difficult to track down when it comes to distributing assets to beneficiaries, and estate administrators may not have the authority or power to manage how digital assets are transferred once their owner has passed away. Getting help with the management of digital assets in an estate plan should be a priority for those who choose to invest in them.
An estate plan should be a comprehensive set of legal tools that clearly direct where a decedent’s wealth and assets should go upon their passing. Digital assets are a relatively new type of property that may not follow all of the same rules that apply to their tangible counterparts.