With the rise of cryptocurrency, many Texans are curious about how cryptocurrency can be implemented into various aspects of their lives—be it estate planning, investing, or other methods—along with its potential stability in the future. However, other individuals do not know the basics about cryptocurrency, including what it is or why they should potentially engage in this virtual currency. Because of this, below are explanations about the underlying nature of cryptocurrency, its potential in the future, and current government recommendations for how it should be implemented in estate planning and investing.
What is Cryptocurrency?
Cryptocurrency is a digital currency exchanged through a computer network. This computer network is often a blockchain that transmits the currency. Unlike many other currencies, it is decentralized, meaning there is not a primary government or bank used to maintain it. While one of the most infamous cryptocurrencies is Bitcoin, there are currently over 9,000 other cryptocurrencies in the marketplace.
Should Cryptocurrency be Included in My Estate Plan?
Since cryptocurrency is an asset that individuals may have, it should be included within a person’s estate plan. The individual writing the will—the grantor—should detail who should receive any cryptocurrency assets that remain after they have passed away. Cryptocurrency would then be treated like other assets in the will and provided to the designated beneficiary. As cryptocurrency is only online, it is also important for the grantor to detail how someone can actually access these records, making it easier for the estate executor to fulfill his duties and transfer the assets to the beneficiary.
While cryptocurrency should be included within an estate plan, the Department of Labor has recommended that individuals do not direct their 401(k) investments into cryptocurrency at this time. Because cryptocurrency is still a newer endeavor—and it is difficult for economists to predict its future volatility and reliability—the Department of Labor does not want 401(k) participants to potentially lose significant funds in their retirement account due to cryptocurrency. As 401(k) plans held individuals to have enough money saved up for retirement, at this moment, cryptocurrency is not recommended as a viable investment in this arena.
People who have questions about cryptocurrency, 401(k) plans, or estate plans generally should contact an experienced attorney who can help them with these processes and answer any questions they may have.
Contact a Houston Estate Planning Attorney
If you or a loved one needs assistance crafting an estate plan, contact the Houston estate planning attorneys at McCulloch & Miller, PLLC. New technology like cryptocurrency can be confusing, and Texans may be unsure of how it should—if at all—be incorporated into their estate plan. That is why we are here to help. With decades of assistance navigating clients through the estate planning process, our attorneys are \ prepared to answer any questions you may have or solve any estate planning problems. To schedule a consultation and to speak with one of our attorneys, give us a call today at 713-333-8900.