In just over a decade, cryptocurrency has gone from an obscure concept to a mainstream investment. Bitcoin, Ethereum, and other digital currencies are now part of many personal portfolios, and their unique nature means they must be handled differently in estate planning. At Borakove Osman LLC, we help Wisconsin clients understand how to protect and pass on these assets in a way that works with both state law and their personal wishes.
Understanding Cryptocurrency as a Digital Asset
Unlike traditional bank accounts or physical property, cryptocurrency exists only in digital form. It is stored in “wallets,” which can be online, on a physical device, or even on paper. Access is controlled through private keys—long strings of letters and numbers that act like a password. Without those keys, the cryptocurrency is inaccessible.
Because there is no central bank or government record, there is no easy way to prove ownership or retrieve lost assets. This means that careful planning is not just smart, but also necessary, if you want your digital investments to benefit your loved ones.
How Digital Assets Fit Into Your Estate Plan
When we talk about estate planning in Wisconsin, we often focus on wills, trusts, and beneficiary designations. Digital assets like cryptocurrency can be addressed in any of these, but they come with unique considerations.
In a will:
A will can direct who inherits your cryptocurrency, but it will become part of the public probate record. For many people, that lack of privacy is a concern, especially with an asset that can be transferred quickly.
In a trust:
A trust can offer greater privacy and a smoother transfer of digital assets. The trustee can be given clear authority and instructions for accessing and managing your cryptocurrency. Wisconsin has adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), which allows you to grant your trustee legal permission to manage your digital assets after you pass away.
In a separate digital asset inventory:
You can keep a secure list of your holdings, wallet locations, and access instructions. This inventory should be stored in a safe but accessible location, and not included in the will itself to avoid public disclosure.
Challenges Cryptocurrency Creates in Estate Administration
If you own cryptocurrency, the people handling your estate will face some distinct challenges:
- Locating the assets – Without clear records, cryptocurrency can be nearly impossible to find.
- Gaining access – Even if your executor or trustee knows you have cryptocurrency, they cannot access it without your private keys.
- Valuing the assets – Cryptocurrency values can fluctuate significantly, which can complicate estate tax calculations.
- Complying with legal requirements – Wisconsin law requires certain steps in handling and transferring assets; digital assets must fit into those processes.
Failing to address these issues can mean the cryptocurrency is lost forever or that your heirs face delays, disputes, or unnecessary expenses.
Steps to Incorporate Cryptocurrency Into Your Estate Plan
If you own or are considering buying cryptocurrency, here are some ways we can help you include it in your estate plan:
- Identify and document your holdings – Create a secure record of what you own, where it’s stored, and how it can be accessed.
- Decide how it will be passed on – Choose whether your cryptocurrency will be transferred through a will, trust, or another method.
- Name the right fiduciary – Select an executor or trustee who understands how digital assets work, or who is willing to work with a qualified advisor.
- Use Wisconsin’s RUFADAA provisions – Include language in your estate documents giving your fiduciary legal authority to manage your digital assets.
- Review and update regularly – Cryptocurrency markets and technology change quickly, and so should your plan.
Why Planning Now Matters
Digital assets do not automatically appear on an account statement or property deed, and the court will not know to look for them unless your plan makes it clear. If no one can access your cryptocurrency after you’re gone, it may be lost permanently. Taking action now can help ensure that these assets are preserved and transferred according to your wishes.
How Borakove Osman LLC Can Help
At Borakove Osman LLC, we understand both the traditional aspects of estate planning and the new challenges created by digital assets. Whether you’re new to cryptocurrency or have been investing for years, we can help you:
- Integrate your cryptocurrency into a comprehensive estate plan
- Protect your private keys and instructions while keeping them accessible to the right people
- Reduce the risk of loss, disputes, or delays during estate administration
If you own or plan to own cryptocurrency, we encourage you to take the time to address it in your estate plan. Contact our office today to schedule a consultation and find out how we can help you protect all of your assets, both traditional and digital, for the future.
