Estate planning issues with Cryptocurrencies
As many of you in this forum are already aware, I have no intention to own Crypto myself, but I find the current mania in Crypto very interesting to follow. While I was working today, I came across the following article from an accounting firm which brings up some interesting estate planning issues re: Crypto:
https://www.richter.ca/bequeathing-bitc ... -properly/
My take on this:
- I understand that some people prefer Crypto due to its anonymity. But probated wills are public documents - would someone who wants to keep their assets secret by holding Crypto be comfortable in mentioning it in their will?
- The issue of passwords for Crypto is very interesting! Again, some people prefer Crypto due to its anonymity, but we are all mortal and you never know when your time is up. You could memorize the password to your Crypto in order to keep your Crypto safe from others, but dead men tell no tales - if you pass away and have not provided the means for your loved ones who survive you to know the password to your Crypto, you have kind of screwed them out of part of their inheritance.
- As some of you may know, when you pass away in Canada, you are deemed to have sold all of your assets at their fair market value at the time of your death. Unless you have a spouse to inherit your Crypto, your estate could face a substantial tax bill on the Crypto you owned. And if you can't show some kind of proof to the CRA how much you paid for the Crypto (i.e the ACB - adjusted cost base), the CRA could assume that the ACB is nil, so the capital gain would be the entire fair market value.
Anyways, I am just bringing this up because I am curious - is there anyone in the forum who owns Crypto and has considered these issues? If so, how are you handling them? I am particularly interested to know how you would handle the issue of passwords - on the one hand, you don't want anyone to steal your Crypto while you are alive, so you just memorize the password; on the other hand, you don't want your loved one to lose out on their inheritance because you were too paranoid to write your password down and store it somewhere.
https://www.richter.ca/bequeathing-bitc ... -properly/
My take on this:
- I understand that some people prefer Crypto due to its anonymity. But probated wills are public documents - would someone who wants to keep their assets secret by holding Crypto be comfortable in mentioning it in their will?
- The issue of passwords for Crypto is very interesting! Again, some people prefer Crypto due to its anonymity, but we are all mortal and you never know when your time is up. You could memorize the password to your Crypto in order to keep your Crypto safe from others, but dead men tell no tales - if you pass away and have not provided the means for your loved ones who survive you to know the password to your Crypto, you have kind of screwed them out of part of their inheritance.
- As some of you may know, when you pass away in Canada, you are deemed to have sold all of your assets at their fair market value at the time of your death. Unless you have a spouse to inherit your Crypto, your estate could face a substantial tax bill on the Crypto you owned. And if you can't show some kind of proof to the CRA how much you paid for the Crypto (i.e the ACB - adjusted cost base), the CRA could assume that the ACB is nil, so the capital gain would be the entire fair market value.
Anyways, I am just bringing this up because I am curious - is there anyone in the forum who owns Crypto and has considered these issues? If so, how are you handling them? I am particularly interested to know how you would handle the issue of passwords - on the one hand, you don't want anyone to steal your Crypto while you are alive, so you just memorize the password; on the other hand, you don't want your loved one to lose out on their inheritance because you were too paranoid to write your password down and store it somewhere.
