Author: admin

cryptocurrency symbol

Three Things You Need to Know About Cryptocurrency and Your Estate Plan

Posted on

Cryptocurrency is somewhat trendy, leading some to consider including cryptocurrency in their estate planning. You need to understand the tax consequences, legal issues, and how you hold your cryptocurrency if you plan to include it in your estate plan.

By the time you read this article, some of the laws concerning cryptocurrency will likely have changed. With legal matters in such a state of flux, you will want to work closely with a California estate planning attorney if you intend to have an estate plan that includes cryptocurrency. Here are three things you need to know about cryptocurrency and your estate plan:

Where or How You Store Your Cryptocurrency

Every now and then, a story hits the news about someone who died and their heirs could not access their cryptocurrency, even though the decedent intended to leave the cryptocurrency to their loved ones. You could have $1 billion worth of cryptocurrency, but if you do not make a plan for how your estate or beneficiaries will access these assets after your death, it could all be lost.

There are several options of how to store or hold your cryptocurrency, including a custodial wallet with a third-party like a crypto exchange; a cold wallet like a USB drive; a paper wallet that is actually a print-out of your crypto keys; and a hot wallet, in which you store your crypto online. Each of these options has a different level of risk if someone wants to steal your crypto. 

For purposes of your estate planning, you will want to address two issues of cryptocurrency. One, choose a storage type that provides reasonable safeguards to prevent theft, either physical theft or hacking. Two, you need to include instructions on how to access the crypto. These instructions should be made a part of your estate plan. Obviously, since wills have to get filed in court, you do not want to include the instructions in a will.

Legal Issues of Cryptocurrency and Estate Planning

One of the original appeals of cryptocurrency was the claim that no government and no laws could control cryptocurrency. While that was never quite accurate, it is becoming less accurate with every passing day. 

Legislatures worldwide are struggling to understand and regulate cryptocurrency. As the laws governing cryptocurrency evolve, you will want to keep on top of any legal developments and evaluate how those laws could impact the value of using cryptocurrency in your estate plan. One way to accomplish that goal is to work with a California estate planning attorney who understands cryptocurrency laws.

Tax Consequences of Cryptocurrency

A lot of people claimed that no government could impose taxes on cryptocurrency because it operated outside of any geographic territory, thereby leaving no country with jurisdiction over the asset. In reality, buying, selling, and trading cryptocurrency can and does have tax consequences. Also, using cryptocurrency to purchase items can have tax consequences. Governments are getting better at tracking these transactions. If cryptocurrency is a part of your estate plan and your estate gets hit with a large tax bill for unpaid tax obligations, this tax liability could diminish the size of your estate and decrease the amount of assets you can pass on to your loved ones. You will want to talk to a California estate planning attorney about the issues inherent in using cryptocurrency in your estate plan. Get in touch with our office today for legal assistance, we gladly offer a free consultation.

Young family sitting together.

How Do I Leave Assets to Minors in California?

Posted on

When preparing an estate plan, special care is needed where a person wishes to leave assets to a minor. This is because asset or property transfers to a minor are often governed by the California Uniform Transfers to Minors Act (UTMA). Our California estate planning attorney can answer any questions you may have about how to leave assets to a minor in California.

What Is the California UTMA?

The California UTMA is a law that mirrors similar laws in other states. It provides that to transfer property to a minor, a person needs to choose a custodian to manage the property until that minor reaches a specific age, between 18 to 25. So, if you wish to leave assets to a minor in your will or trust, you may need to consider who will be the custodian for that bequest.

A custodian will have the ability and right to control the assets and manage them for the minor until that minor reaches the specified age. So, for example, the custodian could invest or reinvest the property with minimal oversight from anyone else once the custodial account or other mechanism is established.

When the minor reaches the specified age, the custodial relationship ends, and the minor gains control of the property or asset. Once they have control, there are no further restrictions on how they may use the assets.

The Interplay of the California UTMA and Your Estate

Even if you don’t use the California UTMA to leave assets to a minor in your will or trust, the executor of the will or trustee of the trust can use it. This is because it is often the simplest way to transfer property you bequeathed to a minor. If the assets you have left are less than $10,000, the transfer can be done without court involvement in California. Where the property is more than $10,000, then the court must approve the custodial arrangement, with certain exceptions.

Alternatively, you can use a trust to leave assets to a minor. A trust allows you to control the specifics of when and how a minor receives assets. It may also have tax advantages. There are many ways to accomplish this. You can create a trust for each minor or establish one family trust to provide for multiple minors.

When creating a trust, you choose a trustee to manage the assets and carry out the terms of the trust. Using a trust is an excellent way to provide for minors because it allows you to decide the amount and timing of distributions to children and what kind of things the trust can pay for. You may want the funds to be used for education or medical expenses. Or you may wish for the trust to provide more for a minor with unique or special needs. 

A trust can also be an attractive option because you can delay when a minor gets control of assets beyond age 25. For example, you can choose for a beneficiary not to have full access until age 35, or to gradual access as they reach certain birthdates. You can even provide that a trustee will manage the assets for the rest of that person’s life.  These may be good options if you have concerns about a person’s maturity or financial savviness. 

However, the structure of the trust you use does matter when it comes to accomplishing these goals. It is best to speak with a qualified estate planning attorney.

Speak With an Attorney 

You may have many options for leaving assets to a minor. Every case is different, and an estate planning attorney can tailor your estate plan to your personal needs. We invite you to contact our office today for a free consultation. We can help you develop an estate plan that works for you and your loved ones.

estate planning attorney speaking with client

Understanding Charitable Remainder Trusts

Posted on

Many people have a goal of leaving some of their money to charitable or philanthropic organizations through their will or trust. Charitable remainder trusts make it possible for a person to give to the charitable organizations they choose during their lifetime while still having access to needed assets.  

If set up properly, a charitable remainder trust can give you the best of both worlds. You should work with a California trusts attorney to create a charitable remainder trust that complies with all the state and federal regulations and creates the desired benefits, like tax savings. A lawyer can help you understand how to use a charitable remainder trust in your estate planning.

An Overview of Charitable Remainder Trusts

With a charitable remainder trust, you or your chosen lifetime beneficiary may have access to your assets and can use them as you see fit during your lifetime, or the beneficiary’s lifetime, even though the assets are transferred into the trust. Your designated charitable beneficiary will receive some or all of the trust assets after you die. Your trust will specify the terms. 

It is possible to set up a charitable remainder trust to benefit a non-charitable beneficiary for the rest of their lifetime, with the remainder of the trust assets going to your designated charitable recipient after the death of the non-charitable beneficiary. In other words, you could set up the trust so that your surviving spouse, child, friend or family member, or some other person receives benefits from the trust for the rest of their lifetime, with the charity receiving the assets that remain upon the death of that person.

Your selection of trustees for a charitable remainder trust is a crucial decision. These trusts are more sophisticated and complicated to administer than a simple living trust. Many people appoint a professional fiduciary, trust company, or financial institution to serve as the trustee for their charitable remainder trust. The risk of appointing a non-professional to serve as the trustee for a charitable remainder trust is that if the trustee does not comply with state or federal regulations, the trust could become invalid and lose its tax savings and other benefits. 

How Charitable Remainder Trusts Are Different from Charitable Lead Trusts

There are two primary types of charitable trusts in California, the charitable remainder trust and the charitable lead trust. We have already discussed how charitable remainder trusts work. Charitable lead trusts are different in that the charity receives benefits first, for a period of years, and then the people you choose receive the remainder of the trust assets when the period expires.

Let’s say that you want to set up a charitable lead trust to pay a specified portion of the trust assets to a specific charity, like 10 percent of the assets annually to the charity for three years. At the end of the three years, called the lead period, the assets that remain in the trust would get distributed to the beneficiaries you chose, like your children or your surviving spouse, in the trust document. If you are considering setting up a charitable remainder trust or some other type of living trust, you should work with a California estate planning attorney to help create an estate planning document that meets your goals and needs. Contact our office today for help with your case.

Older couple discusses potential trusts

Two Types of Trusts: Which Provides Better Protection Against Creditors?

Posted on

If you are considering putting your assets in a trust, you may wonder which type of trust can best safeguard your assets against creditors. While there are many types of trusts, the two most common trust forms are “revocable” and “irrevocable” trusts. Our California trust attorney can help you determine which type of trust best suits your needs and goals.    

What Is a Revocable Trust?

A revocable trust is a legal entity where you can place your assets while you are alive and maintain some control over them. The beneficiaries of a revocable trust do not have access to the assets of a trust until your passing. This is a common type of estate planning tool because it takes assets out of the probate process and lets you pre-determine what happens to them when you die.

The creator of a trust can also be its trustee and manage the assets. A person can change the beneficiaries, remove or add property to the trust or even sell or gift trust property. You will name yourself the trustee when you create a typical revocable living trust to avoid probate.

Because of a person’s retained control over the assets of a revocable trust, this is not a way for you to shield assets from your creditors. In addition, income or wealth generated by the revocable trust counts as personal income, and you will be responsible for any taxes. This can be good in some scenarios, as individual income tax rates are usually lower than trust income tax rates for comparable income brackets. But, for others, the tax consequences may be more significant.

What Is an Irrevocable Trust? 

An irrevocable trust is a legal entity that can also be created during a person’s lifetime and be used for estate planning purposes to avoid probate. However, once a person transfers property or assets to an irrevocable trust, they cannot reverse this decision, and the property is no longer within that person’s control. In many scenarios, the person who funds or creates the trust will also be unable to make decisions related to the trust. 

However, the creator will have the right to choose the trustee of the trust when it is created. While this person cannot be the trust creator, it can be someone you trust. This is a serious decision requiring much thought, as getting the trustee changed or removed is not always so simple.

Some significant benefits of an irrevocable trust are that it can be a great way to limit estate taxes or protect assets from creditors. These creditors include ordinary creditors and others, such as the state of California’s Medicaid program, also known as Medi-Cal. An irrevocable trust may be a good choice for persons who are aging and facing the possibility of needing Medi-Cal to pay for their long-term care, persons who are subject to increased professional liability, or beneficiaries who have special needs or disabilities and want to avoid becoming ineligible for government benefits.

Types of Trusts

Many types of trusts may be available to you. Some irrevocable options that may fulfill a person’s goals of shielding assets from creditors include the following:

  • Special Needs Trusts (sometimes identified as Supplemental Needs Trusts)
  • Irrevocable Life insurance trust
  • Qualified Personal Residence Trust
  • Grantor Retained Trust

This is only a partial list of all the options for trusts that may be available to you. Forming a trust is a serious undertaking and should only be done after consulting with an experienced attorney.

Consult With an Attorney

If you are considering creating a trust to protect your assets from creditors, our attorney is here to help. The California Trust Law is complex and can be confusing. We offer a free initial consultation and a personalized estate and trust planning approach. Contact us today.

estate planning attorneys going over client's assets

Three EASY Asset Protection Tips You Can Use RIGHT NOW

Posted on

You may have heard about asset protection planning and assume it only applies to very wealthy individuals or people in high-risk professions. In reality, asset protection is not only about protecting your assets from creditors. It can also protect you and your loved ones from unforeseen events. Our experienced California estate planning attorney can evaluate if you may benefit from asset protection planning. 

Tip 1- Make Sure You Have Good Liability Insurance

One of the simplest things you can do to protect your assets is to get an umbrella insurance policy. Umbrella insurance can help protect you from claims that can happen to anyone, such as a car accident, an injury on your property, and much more. It can help cover any monetary damages you may be responsible for, plus some of your legal costs. Umbrella policies are often inexpensive and straightforward to obtain and can be bundled with existing insurances you already have. 

Tip 2- Contribute as Much as You Can to Your Retirement 

Qualified retirement accounts such as 401(k)s and IRAs are often exempt from the reach of creditors, even in bankruptcy. If you can save more money in a retirement account as opposed to a brokerage account or regular savings, you are not only planning for your golden years but also keeping these funds out of the hands of creditors or people looking to take advantage of you. Anyone with a qualified retirement account can employ this strategy regardless of whether they work for themselves or are a company employee.

Tip 3- Hold Investment Property in an Appropriate Business Structure

Unexpected accidents or injuries can occur on a property. The law will hold the owner liable for events on a property, sometimes regardless of fault. This state of affairs can encourage frivolous lawsuits, which can put property owners, and their assets, at risk. If you are liable for an injury or accident on your investment property, the plaintiff can enforce their claim against any other property you own, your bank accounts and more. 

A simple way to shield your assets is to hold the property in a business entity. Many options, such as an LLC, Corporation, General Partnership, Limited Partnership, and more, may be available. Each entity may have different pros and cons, such as asset protection, tax benefits, and differing levels of liability for members, partners, or shareholders. The advantage of using one of these structures to hold your investment is that an individual owner’s assets may have a degree of separation, and the risk of their attachment may be significantly diminished. 

Speak With an Attorney

The worst thing you can do is do nothing at all. If you have any assets, you should take steps to protect yourself and everything you have worked so hard for. Although thinking about asset protection may feel overwhelming, doing nothing can financially ruin you. A qualified attorney can help you navigate this process. Not every situation warrants the same asset protection solution. If you need assistance with asset protection in California, please get in touch with our office today for a free consultation.

Older woman working with estate planning attorney

What’s the Problem With DIY Wills?

Posted on

Many people wonder why they shouldn’t prepare their own will. After all, websites abound with “free” legal advice, and it’s easy to get forms and templates off the internet. While it may seem simple and less expensive to DIY your will, drafting mistakes or document execution issues can have serious consequences. 

Consequences may include a court not treating your will as valid. If a court does not accept your DIY will, you and your heirs may be treated as if you passed away “intestate.” Working with a California wills lawyer can help you avoid these issues and give you peace of mind.

Things to Consider Before You Prepare Your Own Will

California, like all states, has unique requirements for a will to be legal and valid:

  • A person must be a legal adult, at least 18 years old, when they sign the will
  • A handwritten will must be signed and dated by its author 
  • A printed or typed will must be signed by the author and witnessed by two people not receiving anything in the will

Many DIY wills fail to meet these requirements and may be deemed invalid despite the drafter’s best intentions. For example, California has stringent requirements regarding witnesses. If a typed will doesn’t have the signature of two witnesses who viewed a person sign it, it may be found invalid.

The wrong wording in a DIY will can also drastically change the meaning of the will and lead to unwanted results. Incorrect language can result in the wrong relative receiving portions of your estate or cutting people out you did not intend to omit.

You may also make choices in your DIY will that can negatively impact someone else’s life, despite your best intentions. If you have an heir with special needs who receives government assistance, receipt of an inheritance can cause them to lose their benefits. They may be forced to spend what you leave them to regain their benefits or hire a lawyer to help them deal with their potential loss of benefits.

Working with an attorney to evaluate any particular circumstances you need to consider can be worth the investment.

What Happens if Your DIY Will Is Considered Invalid? 

If your will is deemed invalid, a court will decide what should happen to your assets and belongings. This means California law will determine who inherits your estate according to specific default rules. These rules can result in unintended consequences. For example, if you have no children but are not on good terms with parents or siblings, they may inherit items you would have wanted to give to friends or other loved ones.

Consult With an Attorney

Get in touch with our office today for a free consultation if you have questions about preparing a will or how estate planning works.

Man signing business succession plan documents

Business Succession: Put It in Writing While There’s Time

Posted on

You might have put some of your best years into building your company, but if you do not create a written business succession plan, your company may close down before its time. Just because you have capable people working at the business, that does not mean that they want to or are able to take the reins when you eventually retire or pass on. 

When it comes to business succession, put it in writing while there’s still time. A California business succession attorney can draft the documents you need and provide legal guidance about your options.

Topics to Cover in Your Business Succession Plan

Even if you don’t plan to retire any time soon, life can take unexpected turns. Just as you plan for inflation, downturns in the market, and other business realities, you should have a written plan for what will happen if you are no longer at the helm.

  • If you would like to step away from the day-to-day management but still have a seat on the board of directors, you should name someone to run the company. Make sure to sign the documents that will give that person the legal authority to make decisions for the company. You should also address your health and life insurance issues, as well as the income you will receive and the duration of that income. 
  • When your spouse or other dependents rely on your income, be sure to address those issues in the succession plan, particularly if you die or become incapacitated.
  • If you would prefer to cash out your interest or sell the company entirely, you will want to include those terms in the written plan.
  • You should not assume that a family-owned business should stay within the ownership or control of your relatives. Your close relatives might not be the right candidates to take over after you step aside. It might be better for your family to have other people run the company while your family receives an income stream from the company.

These are merely the starting points for your succession plan.

A Deeper Dive into Your Succession Plan

Depending on the unique facts of your situation, you might want to consider going into detail on topics like these in your business succession plan:

  • Who will control the patents, trademarks, copyrights, use of the company name, your likeness, and the intellectual property of the business?
  • Who will receive the assets of the company if the business shuts down?
  • You might have worn multiple hats during the launch and growth of your company, but it would probably be better to designate different people to assume the multiple roles of running the company, like the chief executive officer (CEO), chief financial officer (CFO), and the heads of sales and marketing.
  • If you have business partners, your succession plan should not conflict with the partnership agreement. 

A California estate planning attorney can help you navigate these issues and help you develop a business succession plan that can meet the goals of your estate plan. Get in touch with our office today for a free consultation.

elderly man looking over estate planning document

How to Administer a Trust in California

Posted on

Many people are interested in creating a living trust in California to avoid probate and to enjoy many of the other advantages that a living trust provides. But not everyone understands how to administer a trust in California after the death of the trust’s initial creator, often called the settlor. There are many rules you need to know if you find yourself in this position. A California trust administration attorney can answer your questions, draft your trust documents, and help you administer the trust.

Notifying Creditors and Beneficiaries

The first step for a trustee, once the original settlor dies, is often to reach out to all the beneficiaries and potential creditors. Beneficiaries need to know that they are named in the trust. Known creditors, like the doctor and hospital involved in the settlor’s final illness, need to submit their final bills if they want to be paid. 

Creating an Inventory of the Assets

One of the main functions of a living trust is to distribute a person’s assets after they die. You need to find out all the property the decedent had. Most of it should be titled in the name of the trust.  But other assets intended to be in the trust might not bear the correct title. 

It can take quite some time to discover all the assets. Sometimes, the trustee needs to wait until the annual tax documents arrive to complete the inventory.

Managing the Assets

A trustee has a duty to manage the assets of the trust and preserve the assets’  market value to the greatest extent possible. The trustee will want to find out how the assets are titled, have appraisals performed, and determine what needs to be done to manage the different types of assets. 

Some assets, like large amounts of cash, might need to be invested for the period of trust administration. If the decedent owned real property, the trustee may need to engage in property management, for example, renting, selling, maintaining, repairing, and securing the property.

Evaluate Debts and Other Claims

When the bills come in, the trustee will need to evaluate these debts to make sure they are valid. Once the trustee analyzes all claims against the estate, he or she should pay the valid debts. Be sure to keep a careful accounting of all debts paid. Include all details you have about the debts that got paid as well as the ones that you denied.

Prepare Tax Filings

You will need to prepare, or hire an accountant to prepare, the personal income tax return for the decedent’s last year of life and the estate returns for each year or partial year that the estate remains open and the trust administration continues.  

Keep Careful Records

California requires trustees to keep accounting records. You will want to use the correct forms required by law. Beneficiaries have a right to receive an accounting. Failure to create the accounting can be grounds for a judge to remove you as a trustee.

Formulate a Plan of Distribution

After paying all the debts of the estate, you will want to devise a plan and schedule for the distribution of assets to the beneficiaries. Memorialize this distribution plan in writing and share it with the beneficiaries.

Settle the Trust

When wrapping up the estate, you will want to resolve any remaining disputes. You can then make the distributions after getting the consent of all beneficiaries. The distribution of assets will involve retitling assets from the name of the trust to the name of the recipient. After all distributions are complete and all expenses of the administration are paid, you will need to close out the trust accounts and prepare the final accounting. 

Hiring a Professional to Help You Handle the Trust

You do not have to do all of this work by yourself. You don’t need to put your life on hold for months because someone named you the trustee of the living trust. A California estate planning attorney can take care of many of these steps for you so that you can get back to your own life. Contact our office today for legal assistance.

Older woman working with estate planning attorney

Five Hidden Traps in Outdated Living Trusts

Posted on

If your living trust is five or 10 years old or more, it might look fine on its face.  But there may be problems hiding within your estate plan that will rear their ugly heads when it is time to put your trust document into action. The time to fix these issues is now, before they cause headaches for your heirs and beneficiaries. 

A California trust attorney can help you update your documents and answer your questions about changes you might need to make. Let’s go over five hidden traps in outdated living trusts. 

State and Federal Tax Laws Change

State and federal laws that can affect the tax treatment of assets are constantly changing. Even in years when the tax code itself does not change, previous changes to the tax law get phased in over quite a few years. In other words, a change to the tax law in one year can make things different every year or so for the next five years or more. 

Your estate planning documents, including your living trust, should strive to maximize the benefits of current tax law. However, since the tax law is a moving target, your attorney may need to tweak your living trust periodically to keep it running optimally. You could view these updates like taking your car in for a tune-up.

Your Assets and Family Situation May Have Changed

Your living trust can only manage and distribute assets that you title in the name of the trust. Think about the assets you had 10 or 15 years ago. How many of those things do you still own? Are all of your current assets part of your living trust?

Some of your assets, like your retirement account, have likely increased in value significantly since the drafting of your current living trust. You will want to make sure that you evaluate the current values of all your assets when considering the fairness of the distributions to your beneficiaries.

The Federal Estate Tax Cutoff is Different

For many people, their estate plan involves trying to minimize estate taxes by engaging in gifting during their lifetime and charitable contributions. You will want to review your living trust in light of the current federal estate tax cut-off and the anticipated changes to the amount of value your estate can have before federal estate taxes apply.

Your Goals Have Changed

What you wanted to accomplish when you initially set up your living trust has likely changed over the years. Let’s say that you had kids in high school when you created your original living trust. Twenty years down the road, you are probably less focused on making sure they can go to college. You might want to re-shuffle the deck to create a longer legacy plan, including providing for your grandchildren. 

Your Marital Status Can Change

After the passing of 10 or 20 years, the marital status of people in your family might have changed. You might have divorced or remarried in that time. One or more of your children or other beneficiaries might have married, had children, or divorced. Your older living trust was a snapshot of your life and the people who were important to you at that time. You will now want to update your trust to make sure it will accomplish your new goals based on your current situation. You should contact a California estate planning attorney to get started. Contact our office today for help, we offer a free consultation.

cryptocurrency symbol

Investing in Cryptocurrency: The Hot Tax and Estate Planning Issues

Posted on

Investing in cryptocurrency is a trend that appeals to many because banks and governments cannot directly control this asset, and there is a limited level of privacy involved in its ownership and financial transactions that use crypto. The Internal Revenue Service (IRS), however, takes taxation issues of crypto quite seriously.

Also, there are things you need to know if you intend to include cryptocurrency in your estate plan. A California estate planning attorney can answer your questions about investing in cryptocurrency.

An Overview of Cryptocurrency

If you are considering investing in cryptocurrency and leaving it to your heirs in your estate, you need to understand what it is and how it can affect your tax basis.

Cryptocurrency is a type of digital asset that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrency is decentralized, meaning it is not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services. 

Some investors hold cryptocurrency as a long-term investment, while others trade it frequently in an attempt to generate short-term profits. When cryptocurrency is held as an investment, it may appreciate or depreciate in value and can be subject to volatility. When cryptocurrency is exchanged for goods or services, any resulting gains or losses could be taxable. As with any investment, you should consult with a tax advisor to determine how cryptocurrency would impact your tax liability.

It is easy to steal cryptocurrency or to lose it forever. Someone merely needs to get hold of your crypto key, the 64-digit code that is the password to your crypto. When someone obtains that password, they then have control over your crypto. Since you cannot access your crypto without the key, if you lose that precious 64-digit code, you have lost the asset itself. You cannot get a new key for the asset. Imagine if you lost your house key, and the result was that you no longer owned your house.

Taxation Issues of Cryptocurrency

Crypto gets taxed just like any other financial transaction with other parties. If someone pays you more than $600 worth of cryptocurrency for services or goods, you have to disclose that on your tax return. If you buy crypto and then sell it at a higher price than you paid for it, you have a taxable gain. 

Crypto has a fair market value (FMV) that can determine the amount of taxes due. Even though the FMV fluctuates constantly, so does the stock market, and buying, selling, and inheriting shares of stock can have tax consequences. 

Including Crypto in Your Estate Plan

It could be challenging to transfer your crypto to your heirs after your death because they will have to get your 64-digit key. You should never include the key code in your will or trust because anyone who sees your documents could steal the asset using the key. If you write the code on a piece of paper and store it in your file cabinet at home, a house fire could destroy your ownership of the crypto.

Your options are to use a “wallet” to store your key code instead of writing your code on paper or giving the key to a friend or relative and hoping that they never succumb to temptation. “Hardware” wallets are physical devices that store your key code, like a USB thumb drive, but those can get lost or be stolen.

Using a secure, cloud-based password storage software is an option, but again, someone must know where to look to access your key. 

Finally, as recent news reports demonstrate, an investment in cryptocurrency could lose some or even all of its value, if the fundamentals of the company issuing the cryptocurrency prove to be unsound.  

You should always seek advice from a licensed financial advisor and investigate any investment before proceeding. But with crypto it’s especially important that you plan even for worst-case scenarios. By diversifying your investments across different types of assets you may best ensure that your assets are preserved, even if some of those investments fail to turn a profit. Talk to a California estate planning attorney about tax questions and adding cryptocurrency to your estate plan. Contact our office today for legal help, we offer a free consultation.