Cryptocurrency and Your Florida Estate Plan

Blade • February 21, 2022

Cryptocurrency — Deerfield Beach, FL — Blade & Blade PA

A Primer on Cryptocurrency

Cryptocurrency is a form of digital currency that is not controlled by any government or central authority. Instead, cryptocurrency relies on encryption to generate new units and confirm funds transfer. There are several types of cryptocurrency, with Bitcoin being the most popular. As there is no physical component for this type of currency, it is often considered similar to cash.

The Law and Cryptocurrency

Though cryptocurrency has gained popularity as a form of currency, the tax code still requires that this asset be taxed like property rather than currency. This means that transactions involving cryptocurrency will need to reference its dollar value at the transfer time and may generate taxable income.

As it currently stands, the law treats cryptocurrency like other unconventional assets, such as art or gold coins. Though there are exceptions to this rule, most states recognize it as property rather than currency. As a result, some states require additional steps for transferring cryptocurrency before death. Because of these complications, it is recommended that you seek legal assistance when planning the transfer of your cryptocurrency.

For more information about estate planning, contact a knowledgeable attorney. When you work with a skilled legal professional, you can be assured that your interests will be adequately represented.

What Is Cryptocurrency?

Cryptocurrency exists in the digital space, and it cannot be forged or counterfeited because there is no physical item associated with it. Cryptocurrency is confirmed by multiple parties within the blockchain network when each transaction occurs.

The IRS has specific requirements regarding cryptocurrency transactions. All cryptocurrency transactions must be included on Form 8949 and Schedule D and filed with annual income tax returns. Reporting these transactions is necessary to avoid potential criminal charges for tax evasion.

While the IRS treats cryptocurrency as property instead of currency for most purposes, it does allow some exemptions from paying taxes on cryptocurrency transactions. For example, if cryptocurrency is used to purchase goods or services for personal use, it can be exempted from being taxed.

However, cryptocurrency that is held for investment purposes is subject to capital gains taxes when being sold or exchanged. This means that any profit made through investments in cryptocurrency cannot be removed from an individual’s income tax return.

Examples of Cryptocurrency

There are currently thousands of types of cryptocurrency. Some of the most popular versions of cryptocurrency include:

Bitcoin: A popular type of cryptocurrency that is decentralized and has a limited supply. It operates using blockchain technology; a digital ledger shared across a network by multiple parties. For any transaction to be recorded on the blockchain, the approval of each party involved in the transaction must be confirmed.

Bitcoin can be used to purchase goods or services, but it is primarily used as an investment.

Ethereum: An open-source type of blockchain technology that can build decentralized applications and execute smart contracts. Unlike Bitcoin, Ethereum uses gas prices to incentivize the participants in verifying transactions on its network by charging different rates for each transaction. Ethereum has the potential to significantly change how digital information is stored, but it currently has a much lower market cap when compared to Bitcoin.

Litecoin: Uses Scrypt technology, which was designed to make mining difficult, is often called “digital silver” in comparison to Bitcoin, which is known as digital gold. Litecoin was created in 2011 by Charlie Lee, the former director of engineering at Coinbase.

Ripple: A cryptocurrency that financial institutions use to transact quickly and reliably. Ripple cannot be mined because it already has a pre-determined supply. Instead, it operates using a consensus ledger, which requires validating transactions through a network of independent servers before being recorded in the blockchain. There are currently more than 100 banks that are actively using Ripple.

Monero: An open-source type of cryptocurrency that is considered to be highly private and anonymous. It offers a greater degree of privacy than other types of cryptocurrency because it uses stealth addresses, which makes transactions untraceable. Only the person who sends or receives a transaction can see the amount transferred.

Considerations for Cryptocurrency and Estate Planning

How do you hold cryptocurrency?
What is it worth?
How is it transferred upon death?
Who should be the beneficiaries and executor(s)?

The rest of this article covers these issues and provides a much needed high-level overview and roadmap for estate planning with cryptocurrencies

1. How do you hold cryptocurrency?

There are several ways to hold cryptocurrency, but it is not easy to transfer, divide and pass on as other assets like gold or mutual funds. The best way is through a “paper wallet” (a printed version of the private key for your cryptocurrency), which should be stored in a safe, fireproof location.

2. What is it worth?

Cryptocurrency values can fluctuate significantly over time, so the value of your cryptocurrency may require frequent revaluation. The challenge is that you need to regularly obtain current market prices for your cryptocurrencies and then compare them to the amount you initially paid for them.

3. How is it transferred upon death?

The transfer of your cryptocurrency at your death should be dealt with as part of your estate plan, which should include a will or trust that designates beneficiaries and executors. It is not simple to do this, so you should seek out an attorney who is an expert in this area. The process of transferring your cryptocurrency at death may involve multiple parties, including the executor, escrow agent, and/or a cryptocurrency exchange.

4. Who should be the beneficiaries and executor(s)?

Most people designate their spouse as a beneficiary for all of their assets, but it is often a better idea to create trusts for your cryptocurrency. The reason is that, unlike gold or other tangible assets, it is not always clear whether the IRS will consider cryptocurrency to be an asset subject to estate taxes at death. So, suppose you designate your spouse as the beneficiary of your entire estate, including your cryptocurrency. In that case, they are responsible for paying any taxes on the appreciation of your cryptocurrency at your death. Therefore, a better approach is to designate a trust as a beneficiary for your cryptocurrency and let that trustee handle its distributions according to the terms of the trust.

Summary:

The transfer of cryptocurrencies can be handled in an estate plan essentially the same way as other assets. Still, it requires knowledge and expertise of the nuances of cryptocurrency transactions, wallets, and exchanges.

Handling Cryptocurrency in Your Estate Plan

Cryptocurrencies are becoming more and more popular, and as their popularity increases, so does the need for estate planning with regards to them. Here are some tips on how to handle cryptocurrency in your estate plan.

To protect and manage your cryptocurrency assets, make sure you include inclusive language in the estate plan. This will allow fiduciary access to information about them and how they can accomplish their tasks efficiently with proper authorities on hand if needed!

The best way to ensure that your cryptocurrency assets will be accessed and not an undue burden on the beneficiaries of a trust or will is by creating detailed step-by-step instructions for how they can access these private keys. This ensures nobody has trouble figuring out what needs doing for this money fund to work correctly after you’re gone!

Conclusion

If you are looking for more information about cryptocurrency or need assistance with estate planning, please call Blade and Blade at 954-429-1200 today!

< Older Post Newer Post >

When Is It Critical to Review Your Estate Plan and Why?

October 24, 2025

Like other important life tasks, your estate plan deserves your continued time and attention. We recommend that you work with us to review it every three to five years (or more frequently, depending on your circumstances). Think of it as your estate plan’s preventive check-up, and remember: Prevention is the best cure. A routine preventive check-up is not necessarily the only time we see a doctor. Similarly, a preventive planning meeting is not the only time to consider your estate plan. The occurrence of special life events may also mean that it is time to pick up the phone and call us. If you experience any of these significant life events, contact us , and we will help ensure that your estate plan still reflects your goals and wishes.

3 Tips for Your Digital Legacy

October 21, 2025

Digital assets are a category of commonly overlooked assets that play a crucial role in your estate plan and the legacy you leave behind at your death. It is all right if you did not consider these items when you first created your will or trust; such a mistake is surprisingly common and, luckily, easy to correct. What are digital assets? They include all of the following: ● your digital photos and videos saved on your phone, in the cloud, or on an external hard drive ● files (such as emails, financial documents, digital business records, etc.) stored in the cloud or on your computer’s hard drive ● cryptocurrency ● nonfungible tokens ● domain names (URLs) ● social media profiles (e.g., Facebook, LinkedIn, X, TikTok, Instagram, Twitch) ● content creation accounts (e.g., YouTube) ● affiliate marketing accounts (e.g., Amazon, Google, ClickBank) ● accounts associated with e-commerce businesses (e.g., Etsy, Shopify) ● physical device backups ● databases (e.g., medical records, cloud storage services) Such digital assets often carry significant real-world value and, in some cases, generate substantial income. Examples include cryptocurrency wallets, domain names (URLs), monetized YouTube channels, influencer accounts, and digital business platforms. These assets may represent a meaningful portion of your estate, sometimes even its most valuable components. You can no longer afford to adopt a wait-and-see approach. Whether or not you proactively plan, your legacy now includes more than just the monetary inheritance, family heirlooms, and personal property you intend to pass along. In today’s world, you must also consider and create a plan for your digital assets. To that end, here are three tips to help you create or update a plan to properly manage, transfer, or preserve your digital assets. 1. Inventory your digital assets. Make a list of every online account you use. If you run a business, be sure to include spreadsheets, digital records, client files, databases, and other digital business documents. Not only will you need this information for your estate plan, but it will also play a crucial role in any business succession plan you create. If it exists online or in the cloud, connects to it, or pertains to it, put it on the list for your attorney and your trusted decision-makers (agent under a financial power of attorney, executor or personal representative, or successor trustee). This list can act as a critical resource when someone needs to step in and manage your digital assets. 2. Designate a Digital Fiduciary (Sometimes Called a Cyber Successor). This is someone you trust who can access your online accounts and business on your behalf if you are incapacitated or after your death. In most cases, this person will also serve in a traditional fiduciary role, such as your agent under a power of attorney, trustee, or personal representative, depending on timing. Access to digital assets is governed by state law (such as the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, enacted in most states) as well as the terms and conditions of each platform. You should keep your access information secure and consider using the online tools offered by providers (such as Google Inactive Account Manager or Apple Digital Legacy) to ensure your fiduciary can act quickly and legally. 3. Determine the necessary tools to properly record and carry out your wishes and ensure that your legacy continues as you want. Depending on your unique situation, it may be advisable to fund some of your digital assets into a trust or even include specific access in a power of attorney. We can help you determine the best way to protect and pass on your digital assets, select your trusted decision-makers and beneficiaries, and ensure that the right tools are in place so your assets can be accessible when needed. The laws in this arena are evolving, so any planning you have done in the past needs to be reviewed and possibly updated. Potential Pitfalls of Failing to Plan for Digital Assets The worst thing you can do is nothing. Inaction could result in the loss of digital family photo albums, disruption of your business if you are incapacitated, or worse. If this process feels daunting or you are unsure where or how to start, call us. We can help you identify, track, and protect your digital assets to give you peace of mind.

Do Your Parents Have an Estate Plan?

October 15, 2025

Creating a comprehensive estate plan is an absolute necessity, contact Blade & Blade to see how we can help.

Probate law: judge’s gavel symbolizing the legal system.

A Probate Attorney in Boca Raton, FL, Saves You Effort.

September 19, 2025

Need a probate attorney in Boca Raton, FL? Blade & Blade, P.A. offers expert probate help. Call 954-429-1200 now for clear, reliable support.

A gavel next to a small house model symbolizes legal aspects of estate planning and property.

Why Estate Planning in Boca Raton FL Is Essential for Every Family

July 24, 2025

Learn why Estate Planning matters with Blade & Blade P.A. in Boca Raton, FL. Protect your family’s future—call (954) 429-1200 or click here to start.

Estate Planning in Florida: A New Year’s Goal for Peace of Mind

March 24, 2025

As the New Year begins, many of us take the opportunity to set goals for personal growth, financial stability, and overall well-being. While these resolutions often include exercising more or saving money, one essential goal that often gets overlooked is estate planning. For Florida residents, the importance of establishing or updating an estate plan cannot be overstated. Here’s why making estate planning a priority this year is one of the best decisions you can make for yourself and your loved ones. What Is Estate Planning? Estate planning involves preparing for the management and distribution of your assets in the event of your incapacitation or passing. A comprehensive estate plan typically includes a will, powers of attorney, healthcare directives, trusts, and beneficiary designations. It’s not just for the wealthy—anyone with assets, children, or specific wishes regarding their healthcare or property can benefit from having a plan in place. Why Is Estate Planning Critical in Florida? Protecting Your Loved Ones Florida’s probate process can be lengthy and costly, potentially causing stress and financial strain for your family. By having a well-prepared estate plan, you can simplify or even avoid probate, ensuring your loved ones have access to the resources they need without unnecessary delays. Avoiding Intestate Succession If you pass away without a will, Florida’s intestate succession laws dictate how your assets are distributed. This can lead to outcomes that may not align with your wishes. Creating a clear estate plan allows you to determine exactly who receives what, giving you peace of mind that your legacy is protected. Addressing Unique Florida Considerations Florida’s homestead laws, which protect your primary residence from creditors, and its tax-friendly environment make estate planning especially advantageous. However, these laws also introduce complexities that require careful planning to ensure your assets are handled as intended. Preparing for Incapacity Estate planning isn’t just about what happens after you’re gone. Documents like a durable power of attorney and healthcare surrogate designation ensure your financial and medical decisions are made by someone you trust if you become incapacitated. Steps to Start Your Estate Plan Take Inventory of Your Assets: Identify your property, financial accounts, and other assets. Don’t forget to account for non-tangible items like digital accounts or intellectual property. Define Your Goals: Decide how you want your assets distributed and who should make decisions on your behalf if you’re unable to. Consult an Estate Planning Attorney: Laws vary by state, and working with an attorney familiar with Florida’s estate laws ensures your plan is legally sound and optimized for your situation. Blade & Blade, P.A. offers a free consultation which can be done in person at our offices, Zoom or by phone. Update Beneficiary Designations: Ensure accounts like life insurance, retirement funds, and payable-on-death accounts reflect your current wishes. Communicate with Your Loved Ones: Discuss your plans with family members to minimize confusion and potential conflicts in the future. Make It a New Year’s Resolution Starting or updating your estate plan doesn’t have to be daunting. Break it down into manageable steps and set realistic timelines to complete each phase. By prioritizing this goal early in the year, you can approach the months ahead with confidence, knowing you’ve taken a significant step toward securing your family’s future. Final Thoughts Estate planning is not a one-size-fits-all process. Your plan should be tailored to your unique needs and Florida’s specific legal environment. As you set your New Year’s resolutions, consider the peace of mind and security an estate plan provides. It’s an investment in your legacy and your loved ones’ well-being—one that will pay dividends for years to come. Take the first step today and make 2025 the year you prioritize estate planning. Your future self—and your family—will thank you. Give us a call at 954-429-1200 to schedule a consultation!

Estate planning lawyer in Boca Raton, FL advising clients on wills and trusts at an office meeting.

Plan Ahead With an Estate Planning Lawyer in Boca Raton, FL

March 9, 2025

Estate planning lawyers in Boca Raton, FL, can help with wills, trusts & asset protection. Secure your future! Call Blade & Blade P.A. at (954) 429-1200 today.

Health Care Surrogate

By Blade • August 9, 2022

Most of us live hectic lives. We rush from one task to another, trying to fit in as many activities The post Health Care Surrogate appeared first on Real estate, probate, and family law - Blade & Blade P.A..

Estate Planning — Deerfield Beach, FL — Blade & Blade PA

Revocable Trusts vs. Irrevocable Trusts – Understanding the Difference for Florida Residents

By Blade • July 20, 2022

Estate Planning Estate planning in Florida is a set of activities that includes creating different documents to determine the distribution The post Revocable Trusts vs. Irrevocable Trusts – Understanding the Difference for Florida Residents appeared first on Real estate, probate, and family law - Blade & Blade P.A..

Living Trust — Deerfield Beach, FL — Blade & Blade PA

The Major Advantages of Living Trusts in Florida

By Blade • May 20, 2022

What is a Living Trust? A Florida living trust is an estate planning legal instrument that people use to transfer The post The Major Advantages of Living Trusts in Florida appeared first on Real estate, probate, and family law - Blade & Blade P.A..