Does Your Estate Plan Address Your Cryptocurrency?

Cryptocurrency isn’t the only digital asset your estate plan needs to address. However, it may be the one with the most value. If your estate plan doesn’t address digital assets, or if your executor, or trustee, is unfamiliar with digital assets, those investments could disappear or become inaccessible. This blog will explain what you’ll need to do if you want to pass your digital wealth on to your loved ones.

Crypto owners use a variety of tools to ensure that their assets are not easily accessible. Such protection is vital because Bitcoin is a bearer asset, meaning whoever has access to the asset owns it. Strong protection is great while you’re living. However, if your estate plan isn’t ready, these same protective measures can prevent your loved ones from benefitting from the cryptocurrency you’ve worked to accumulate. Think of it as if you were trying to locate the keys to a loved one’s home, versus trying to get past the facial recognition software on their phone after they’ve been buried.

How you own your digital currency will also make a big difference in what must be done to gain control of it. If they are indirectly owned through exchange-traded funds (ETFs) or stocks owning cryptocurrency, your executor or trustee will access them in the same way they would any other investment account. If you store coins on cryptocurrency exchanges, your executor or trustee will need to access the account. You can share your private keys with beneficiaries, or if the exchange permits you to name beneficiaries for an account, follow the instructions provided by the exchange. Please note that not all exchanges offer this feature.

For the most part, however, cryptocurrency remains the Wild West, and you must protect your property yourself. Don’t expect your executor or trustee to be able to navigate this new world unless they have all the necessary information. There’s no registry or clearing house and no paper trail to follow.

You’ll need to provide the people you have named as executors or trustees with a list of coin names, the number owned and their location: on an exchange, in a digital wallet, or stored offline in a physical device. They’ll need to know how to access private keys or seed phrases.

If your coins are stored on your mobile phone or laptop, someone will require information to unlock these devices. If you use a biometric lock for your phone, such as facial recognition or fingerprint recognition, you’ll need to create an alternative means of accessing the device. Passwords to access cryptocurrency exchanges, digital wallets and those required to access email accounts and authenticator apps used for multifactor authentication will also be needed.

Managing crypto and digital assets during the probate process can be complex for those unfamiliar with the space. Because of this, you may want to choose an executor or trustee that has experience with cryptocurrency.  If your executor or trustee does not have experience with cryptocurrency or other digital assets, you may want to prepare them for the role.

Finally, don’t include any access information in your written estate planning documents, particularly your will. Once a will is admitted to probate, it becomes a public record. Talk with your estate planning attorney about creating a separate document containing this information to be shared with your fiduciaries. Ensure that your fiduciaries are prepared for this task and be sure to appoint a successor in case they are unable or unwilling to serve when the time comes.

If you want your beneficiaries to reap the benefits of your forward-thinking investments, these resources need to be in place and planned for as part of your estate plan.

Reference: Barron’s (June 14, 2025) “You Struck It Rich With Bitcoin. How to Leave It to Your Heirs”

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6 Things Seniors Should Consider Before Marrying

Seniors in particular think about marrying with an understandable degree of concern. Maybe your last relationship ended in a divorce, or it’s been a long time since they were married. However, according to a recent article from MSN, “Planning to remarry after a divorce? 6 tips to protect your financial future,” there are some steps to take to make relationships easier to navigate and protect your financial future.

Not all of them are easy, but all are worthwhile.

1.No marrying without a prenup. Everyone thinks of prenups as pertaining to divorce.  They can address divorce, but prenups do much more.  They clarify property in the marriage, such as whether it will belong to one spouse or to the other or both.  Prenups clarify many issues: full financial clarity, financial expectations, the marital rights of the couple and clear details on what would happen in the worst case scenario. This is especially important to putting each of the couples’ respective families at ease as they marry.  Getting all this out in the open before you say “I do” makes it much easier to go forward.

2.Trust…but verify. Estate planning ensures that assets pass as you want. A revocable living trust set up during your lifetime can be used to ensure your assets pass to your offspring. Unlike a will, the provisions of a revocable trust are effective not just when you die but in the event of incapacity. A living trust can provide for the trust creator and their children during any period of incapacity prior to death. At death, the trust ensures that beneficiaries receive assets without going through probate.

3.Estate planning. While you are planning to marry is a good time to check on account titles, beneficiary designations and powers of attorney, both medical and financial. Couples should review their estate plans to be sure planning reflects current wishes. This will go a long way to avoiding fights between the respective families who just recently joined together.

4.Check beneficiaries. Especially after divorce and before a remarriage, check beneficiaries on 401(k)s, pensions, retirement accounts and life insurance policies. If you marry, state law may require you to give some portion of your estate to your spouse or otherwise affect your ownership of property.  In many cases, this can be addressed by a prenup, but you still want to consult an estate planning attorney to guide you through any changes to beneficiaries.

5.Medicaid Planning.    On the negative side, you should consider the likelihood that either party will need help paying for long term care BEFORE marrying.  Medicaid, which is a government benefit that helps pay for long term care, has different eligibility based upon the marital status of the applicant.  Medicaid also expects both spouse’s assets to be used for care which has nothing to do with the prenup.  So, for some individuals, it doesn’t make sense financial to marry where one party will need long term care.

6.Choose fiduciaries wisely. The fiduciaries named in your estate plan are the people who have tasks to fulfill.  This could be a trustee, an executor, an agent and so on.  Consider carefully who should fill these roles as they may have to be between the two families.  Consider the advantages of a corporate trustee, who will be neutral and may prevent tensions with a newly blended family. If an outsider is named as an executor, or to act as a trustee, they may be able to minimize conflict. They’ll also have the professional knowledge and expertise with legal, tax and administrative complexities of administering estates and trusts.

Reference: MSN (Feb. 11, 2023) “Planning to remarry after a divorce? 6 tips to protect your financial future”

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What Is the HEMS Standard?

Many trusts for third parties reference “HEMS” language, namely health, education, maintenance and support.  The HEMS standard is used to inform trustees as to how and when funds should be released to a beneficiary, according to a recent article from Yahoo! News, “What is the HEMS Standard in Estate Planning.” Using HEMS language in a trust gives the trustee more control over how assets are distributed and spent. If a beneficiary is young and not financial savvy, this becomes extremely important to protecting both the beneficiary and the assets in the trust. Your estate planning attorney can set up a trust to include this feature, and it is commonly a feature in trusts we prepare.

When a trust includes HEMS language, the assets may only be used for specific needs. Health, education or living expenses can include college tuition, mortgage, and rent payments, medical care and health insurance premiums.

Medical treatment may include eye exams, dental care, health insurance, prescription drugs and some elective procedures.

Education may include college housing, tuition, technology needed for college, studying abroad and career training.

Maintenance and Support includes reasonable comforts, like paying for a gym membership, vacations and gifts for family members.  Many attorneys also expand upon this definition at the request of clients to expressly authorize money to be spent for business opportunities, vehicles, houses and so on.

The HEMS language provides guidance for the trustee.  However, ultimately the trustee is vested with the discretionary power to decide whether the assets are being used according to the directions of the trust.

In some cases, the HEMS standard is essential for asset protection.  For example, if I am the beneficiary of a trust and also my own trustee, it isn’t a good idea for me to have unfettered discretion on using the trust funds.  If I did, a creditor of mine could require me to use that discretion to pay them.  Instead, it would be better if the trust limited the ability to distribute to HEMS as the trust can still assist with my health, education, maintenance and support.  You’ll notice however, that HEMS does not include my creditors. See this article for a similar issue discussing creditors and divorces of beneficiaries. https://galligan-law.com/protecting-inheritance-from-childs-divorce/

Sometimes beneficiary requests are straightforward, like college tuition or health insurance bills. However, maintenance and support need to be considered in the context of the family’s wealth. If the family and the beneficiary are used to a lifestyle that includes three or four luxurious vacations every year, a request for funds used for a ski trip to Spain may not be out of line. For another family and trust, this would be a ludicrous request.

Having HEMS language in the trust limits distribution. It may also, depending on the situation, be beneficial to have distribution restrictions so that the trustee can reply “no” when a beneficiary becomes too used to using trust money.

Giving the trustee HEMS language narrows their discretionary authority enough to help them do a better job of managing assets and may limit challenges by beneficiaries.

HEMS language can be as broad or narrow as the grantor wishes. Just as a trust is crafted to meet the specific directions of the grantor for beneficiaries, the HEMS language can be created to establish a trust where the assets may only be used to pay for college tuition or career training.

Reference: Yahoo! News (Jan. 7, 2022) “What is the HEMS Standard in Estate Planning”

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