Connecticut is one of more than 40 states to have laws on the books that permit executors to manage digital assets in the same way they do traditional assets. The rise of digital assets in recent years, including cryptocurrency, has introduced some additional complexities to estate planning.
It is important for people to think about both the technical and legal side of estate planning when it comes to digital assets. Without taking care of the technical side, relatives might have the legal right to access the assets but be unable to do so in a practical sense. The opposite would be true if the legal side were neglected.
One attorney suggests simply listing the needed technical information on a piece of paper. These would include the assets, locations of keys, timelock requirements, passphrases, PINs and any other necessary information. She advises creating at least two copies of this document. The problem with using a USB drive is that technology can fail. The attorney advises active traders to do weekly updates of their lists, but more infrequent traders may be able to update just once a year. One complication cryptocurrency might present for an executor is the volatility of its value. This could mean that the executor would want to sell it quickly to avoid the appearance of mishandling the asset if its value drops.
People who have digital assets might want to visit an attorney to discuss estate planning. People who already have an estate plan but who have not updated it to reflect the existence of digital assets may want to do so. Digital assets are not limited to cryptocurrency accounts; they could include emails, photographs, mailing lists, social media accounts and more. Laws differ between platforms regarding when and how these assets can be accessed, so it is important to look at individual situations.