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Crypto E1661388352639

Should the cryptocurrency holdings in your revocable trust be consequential, obtain legal counsel and the input of a qualified financial adviser with digital currency expertise.  Failure to do as such will create a minefield for your chosen trustee and beneficiaries.  That being said, what follows are a few points to consider with regard to the cryptocurrency holdings in your trust:

1. As opposed to the need to present a death certificate and/or a copy of the trust to obtain access to the decedent’s bank and brokerage accounts, the “key” to the successor trustee acquiring control of cryptocurrency is knowledge of your crypto account passcode.

2. Make sure that your estate planning attorney creates a separate “Cryptocurrency Amendment” containing your wishes regarding and access information concerning your cryptocurrency.  A complete (i.e. non-redacted) copy of the trust is often required to be provided to financial institutions in order for them to enable the trustee to manage the bank and brokerage accounts.  Additionally, notwithstanding that one of the main purposes of setting up a revocable trust is to avoid the public eye of the probate court, to the extent a dispute occurs which results in litigation, a copy of the trust almost always becomes part of the public record.

3. The Cryptocurrency Amendment should give the trustee specific authority to maintain and administer the cryptocurrency.  A clear directive is imperative to allow the trustee to be protected from legal risk of judgment challenges by beneficiaries, to avoid jeopardy under the prudent investor rule, and to facilitate required dealings with third parties.

4. Proper planning needs to occur to secure the cryptocurrency from access and manipulation to the extent your trustee needs to be replaced.  Many cryptocurrency holders meet this challenge through the use of “cold storage”, often taking the form of a USB drive which conceals the passcode from users.

5. When your choice for trustee lacks the wherewithal to manage cryptocurrency accounts, the Cryptocurrency Amendment needs to provide that the trustee must retain a competent professional to assist in administering the holdings.