For some people, drafting a simple will may be all that they need to complete their estate planning. But far more Californians discover that they need more sophisticated estate-planning options.
One emerging option is a crypto will. In fact, having a way to pass on your digital assets might be the only way to keep the state of California from claiming them.
Bill proposed for asset seizure
California Assembly Bill (AB) 1052, if passed, would allow the state to seize cryptocurrency assets that remain unclaimed on the marketplace for three years or longer. However, there currently is an exclusion included in the proposed bill for individuals and self-custodied wallets.
But this proposed change brings into focus the inherent challenge of passing crypto assets to loved ones after you have gone.
Why crypto wills might be necessary
People are starting to use blockchain and crypto wills to distribute their digital assets after they pass away. Because this is a new area of estate planning, the laws take a while to catch up.
But planning ahead for an unknown future is important. Rather than having your assets claimed by the state one day, should the proposal get signed into law, you can draft your own cryptocurrency will that can ensure preservation of your digital assets.
Other benefits of crypto wills
When it comes to security, this technology is as secure as it gets. If you want protection from hackers, this is one way to do it. Having a crypto will can also shorten the probate process because there is no need to track down assets.
California has not yet addressed code-based wills’ validity. But electronic wills are legal here. Those interested in creating crypto wills can find guidance when planning to disburse their digital assets.
