An Estate Planner’s Cryptocurrency Guide
Cryptocurrency is no longer a buzzword—it’s fast becoming part of everyday life, and that includes estate planning. If you’re an estate planner scratching your head about what to do when a client brings up crypto, don’t stress. This guide gives you the basics, from what blockchain is, to how wallets work, and the best ways to help your clients safely store and pass on their digital assets. It's not about knowing everything—just having enough know-how to guide them in the right direction.
An Estate Planner’s Cryptocurrency Guide
If you’ve ever nodded along while a client talks about “crypto” and secretly thought, I have no idea what they’re on about—you’re not alone. Digital assets like cryptocurrency and NFTs are popping up in more and more estates, and it’s high time we estate planners got a handle on the basics. So, let’s break it down in plain English.
What’s all this blockchain talk?
The tech behind crypto is something called blockchain. Imagine a digital ledger—like an Excel sheet—that’s not stored in just one place, but copied across heaps of computers around the world. Each entry, or “block”, is linked to the one before it. If someone tries to mess with it, the system knows and rejects the change. In short: secure, transparent, and hard to tamper with.
So, what is cryptocurrency then?
Cryptocurrency is digital money that lives on that blockchain we just talked about. Unlike your bank account, no one controls it—not a bank, not the government. Your client’s crypto is tied to a unique wallet address, and unless they lose the keys (more on that in a sec), no one can take it away or freeze it.
NFTs—what’s the deal?
NFTs, or “non-fungible tokens”, are basically digital proof of ownership. They live on a blockchain too, and they’re each one-of-a-kind. It could be a link to a digital artwork, a contract, or some other asset. The NFT proves who owns it—even if the actual image lives somewhere else online.
Storage: Wallets and Keys
Crypto and NFTs are kept in digital wallets. These can be apps on a phone, hardware devices (like a USB), or even a piece of paper. Each wallet has a public key (like a BSB number) and a private key (like a password). If your client loses that private key, the assets are pretty much gone forever.
How should estate planners handle it?
When it comes to digital assets, the name of the game is security and planning. Your clients need to make sure their wallets and private keys are safe—but also accessible to the right people after death. That means thinking twice before scribbling passwords in a notebook or dumping them in a Google Doc.
Got a simple solution?
Yes. For starters, your client can keep their digital keys in an encrypted file on the cloud and give access instructions to their executor. It’s not perfect—but it’s better than nothing. Just be aware of risks like lost passwords, expired links, and the fact that the estate planner ends up holding a fair bit of responsibility.
Prefer a professional fix?
There are platforms now (like ours at HazeLegal) that are built for this exact problem. They let your clients store and share digital assets securely, with access only triggered after they pass away. You can even collaborate with their other advisors to keep everything in one tidy spot.
Digital assets aren't going anywhere—and as estate planners, we don’t need to become crypto experts overnight. But we do need to speak the language enough to guide our clients. At the end of the day, it’s just another part of their legacy. And with the right tools and a little prep, you’ll be more than ready to help them plan for it.
DISCLAIMER
This commentary is published by WebWills for general information only—it’s not legal advice. If you have questions or need advice for your specific situation, we recommend speaking to a lawyer or reaching out to us at http://webwills.com.au before making any decisions.
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