Cryptocurrency continues to become more and more important to many people's personal wealth. New Jersey residents need to plan for digital assets from Ethereum, Bitcoin, NFTs, and much more as part of their estate plan. The thing is, crypto has its own set of problems and challenges. One of the biggest is how to give your beneficiaries access to your assets without exposing your private keys. With the right estate planning, you can protect your assets now and in the future. 

At Pedrani Law LLC, our New Jersey estate planning lawyer understands the importance of protecting your private keys. Our team can help you protect your cryptocurrency and ensure digital security. If this sounds like you, we are ready to provide a personalized consultation of your case. 

Why Cryptocurrency Needs a Little Extra Special Planning

Cryptocurrency presents different challenges than typical assets of the past. Crypto is decentralized. There is no bank or central authority to protect those assets if your keys are lost. If your keys are lost or stolen, your hard-earned crypto could be gone forever. Of course, this is a major problem for many people.

In New Jersey, you can take estate planning steps to help protect your digital assets. You can also ensure they pass the way you want them to, preventing access before the appropriate time. Careful planning with an experienced attorney can make all the difference.

Step 1: Create an Inventory of Your Digital Assets

First, look at everything you have. All of your crypto should be accounted for and collect information such as:

• All of your wallet types

• The specific assets and types you have

• Note all exchange accounts, such as Binance, Kraken, or Coinbase

• Inventory all NFTs

• List all blockchain-based assets

When you create this document, do not put your private keys or seed phrases with it. Instead, list where you store these assets. This might be a password manager, a USB drive, or some offline vault. Keep this inventory updated regularly to ensure it is always up to date.

Step 2: Pick the Right Way to Transfer Your Crypto

You can choose to transfer crypto in several ways. Two are very common. You can pass crypto along in a will during probate, but this could expose sensitive information. This is not a good way to pass crypto because of the significant risks of doing it this way. Your information can easily become public record, exposing critical crypto information no one else should have.

Trusts are the highly preferred and recommended method for passing crypto. Trusts offer you a lot more privacy and let you avoid probate. They also tend to be more flexible in how you transfer crypto assets. 

In New Jersey, a trust is often the preferred method. It lets you better maintain confidentiality both during and after your life. It can also protect the assets for your beneficiaries more efficiently. Speak to your attorney about the best way to handle it in your particular situation.

Step 3: Have a Digital Fiduciary

New Jersey law allows you to pick a fiduciary to access your digital assets. You must specifically grant access to your digital assets to that fiduciary. You must also utilize specific language under both federal and state law to ensure that grant of authority is effective. 

Some choose to appoint different fiduciaries for different purposes. Perhaps you want to name a trusted family member as your executor, but they don't have the technical knowledge needed to protect your digital assets. A “digital fiduciary” can help you do this.

Step 4: Securely Store Your Credentials

With the help of an experienced attorney, you can take steps to protect your passwords, keys, and seed phrases. Steps might include, but are not limited to:

• Password managers

• Multi-signature wallets

• Encrypted USB drivers

Get In Touch With a New Jersey Crypto Estate Planning Attorney

Planning for your digital assets and how they will pass is an important matter. Even many attorneys lack the experience necessary to handle these modern day assets. You need a lawyer well-versed in federal and state digital asset protection laws and estate planning law in general. 

Our team at Pedrani Law, LLC can help you with your New Jersey crypto estate planning needs. Contact us today for a consultation.