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Is your estate plan fit for the digital age?

 Posted on October 22, 2021 in Uncategorized

If you have always been ahead of the crowd in adopting new technology, you need to make sure your estate plan is as up-to-date as you are.

When cryptocurrency launched, it touted two main advantages — security and tax avoidance. While the first bitcoin came out in 2009, it took a while for governments to realize cryptocurrency was here to stay. Therefore, they are still playing catch up to regulate it.

Keeping things secret is not good for your heirs

The security advantages that cryptocurrency promises can be its downfall if you do not allow for access in your estate plan.

Holding money somewhere that is harder to break into than Fort Knox is great when you are alive and remember how to get in. Yet, if you do not leave the entry details to someone, your family will not be able to get in once you die, and your investments will go to waste.

Estate planning laws now include standard ways to ensure your family gets access to all your digital assets, not just the ones with financial value.

Using cryptocurrency to avoid tax may be a thing of the past

You also need to consider the tax implications of transferring digital assets. As far as the IRS is now concerned, cryptocurrency is property. If you make money trading it, you need to pay tax. If you leave it to someone in your estate plan, they too may need to pay tax.

The government has proposals to tighten controls because it knows it has lost out on tax thanks to cryptocurrency. If you review your estate plan every time you upgrade your phone, you put yourself in good stead to ensure your estate plan serves you and your family well into the future.

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