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Protecting Your Digital Wealth: A Guide on Estate and Legacy Planning for Crypto Assets

Jan 24, 2024

protecting-your-digital-wealth-a-guide-on-estate-and-legacy-planning-for-crypto-assets
protecting-your-digital-wealth-a-guide-on-estate-and-legacy-planning-for-crypto-assets
protecting-your-digital-wealth-a-guide-on-estate-and-legacy-planning-for-crypto-assets

Sheltering Your Cryptocurrency and NFT Portfolio in a Digital Estate Plan

In today's digital age, cryptocurrencies and NFTs are rapidly gaining popularity as assets. However, have you planned what will happen to these holdings after death? Without the right arrangements, your crypto wallets and NFT collections could be lost to your heirs.

Creating a digital estate plan is crucial for ensuring your cryptocurrency, NFTs and other digital assets are rightfully distributed to your loved ones after your passing. This guide will show you the simple steps on how to create digital estate planning within a trust for the future. By following these best practices, you can rest assured your digital portfolio will live on and generate wealth for generations to come.

What is Digital Estate Planning?

Digital Estate Planning refers to the process of organizing and managing one's digital assets in preparation for incapacity or death. It involves creating a plan to ensure that your digital assets, such as cryptocurrency holdings and NFTs, are properly handled and transferred to designated individuals or beneficiaries.

Why is Understanding the Scope of Your Digital Assets Important?

Taking inventory of your valuable digital holdings is crucial because it allows you to appropriately plan how they will be managed upon your passing. A trust is an ideal legal vehicle for administering digital assets after death. While naming a traditional trustee alone may not suffice for managing your digital assets, UTGL's innovative platform empowers you to provide clear instructions for accessing accounts and passwords while seamlessly bypassing probate proceedings. Using a trust also protects your loved ones from navigating a lengthy and stressful probate process without guidance for settling online accounts and assets.

By creating a trust and appointing a trustee to administer it, you safeguard these digital assets from threats like identity theft, hacking or fraud. Some trust companies now offer specialized digital custody services that can further protect your digital assets. With top notch digital custody, your assets are securely held by the trustee using cutting-edge encryption and two-factor authentication. This prevents unauthorized access to your accounts. It also ensures your assets remain safe and can easily be distributed according to the terms of your trust after your death. Establishing a digital trust with a company providing custody gives your family much-needed peace of mind.

Setting up a Trust for digital estate planning in 4 steps

Now that you understand the importance of safeguarding your digital assets, it's time to take action by setting up a trust for your digital estate planning. You can properly establish your trust following these 4 steps:

  1. Compile an Inventory

List all crypto wallet addresses, NFTs, and any other digital holdings.

  1. Name a trustee Select the trust company that will manage and distribute your digital assets

  2. Determine Asset Distribution

Set a timeline for distributions, such as immediately upon your death or after certain conditions are met.*

  1. Fund the trust

This puts assets under the trust's protection.

1.Take Inventory

In this initial step, you'll make a complete list of all your digital assets such as cryptocurrency wallets and NFTs. Having an inventory ensures nothing gets overlooked in your digital estate plan.

2.Choose a Trustee

It's important to select a reputable trust company that specializes in digital asset management. Look for a company that offers dedicated digital custody services to securely hold your crypto, and other digital assets according to your trust instructions, both during your lifetime and after your death.

Companies like UTGL provide digital custody, which allows you to place your digital assets under their protection even while you are still living. Their digital custody solution utilizes advanced encryption and multi-factor authentication provided by Fireblocks and similar solutions gives you added assurance that your assets remain safely stored.

3.Determine Asset Distribution

Start by categorizing your assets and specify your wishes for each category and individual asset.

For cryptocurrency, determine if you want individual coins/tokens transferred directly to beneficiaries. Alternatively, they could remain under the trustee's control and managed over time. Designating your step-by-step asset distribution plan now ensures your digital estate transitions seamlessly according to your true intentions.

4.Fund The Trust

In this final step, you will transfer ownership of your digital assets to your trust, ensuring they are injected and protected under the legal terms you established.

For cryptocurrency, you would transfer coins and tokens from personal wallets to the dedicated custody account set up by your trustee.

Properly injecting your digital assets into the trust is vital for leaving your online legacy as intended. This funding step gives ultimate protection and peace of mind and facilitates smooth inheritance of your digital estate.

A thoughtful digital estate plan and revocable living trust work together seamlessly to distribute your online assets precisely according to your wishes upon your passing. With a trust, not only can ownership of digital resources like accounts, domains and cryptocurrency holdings transfer immediately to beneficiaries, but you can assign specific percentages of each asset.

For example, you may specify that your NFT transferred to your designated beneficiaries. Your trust also allows assigning 25% of your bitcoin to one beneficiary and splitting the remaining 75% evenly between other heirs. This level of customization and control avoids potential privacy or access disputes that could arise if digital properties went through the public probate process instead. With a trust, your digital assets will transfer effortlessly according to the individual percentages you took the time to designate for each valued digital heirloom.

Our services offer the ultimate peace of mind that your digital and real property legacies will be preserved precisely as you intend.

Ready to protect your legacy? Get started on your digital estate plan with UTGL!

*subject to the applicable client trust plan and terms and conditions

Ready to get started?

Unlock the power of trust with UTGL today. Take the first step by exploring our Trust Platform or create an account for an instantly rewarding experience.

© 2024 UTGL. All rights reserved.

Disclaimer: The information provided on this website is for informational purposes only. It should not be considered legal, financial or tax advice. UTGL makes no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display or use. All information is provided on an as-is basis.


This website may contain links to external websites that are not provided or maintained by or in any way affiliated with UTGL. Please note that the UTGL does not guarantee the accuracy, relevance, timeliness or completeness of any information on these external websites.


Links to external websites are provided as a courtesy and do not imply UTGL's endorsement of those sites or their content, products or services. UTGL assumes no liability for damages resulting from the use of or reliance upon the information provided herein.

Ready to get started?

Unlock the power of trust with UTGL today. Take the first step by exploring our Trust Platform or create an account for an instantly rewarding experience.

© 2024 UTGL. All rights reserved.

Disclaimer: The information provided on this website is for informational purposes only. It should not be considered legal, financial or tax advice. UTGL makes no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display or use. All information is provided on an as-is basis.


This website may contain links to external websites that are not provided or maintained by or in any way affiliated with UTGL. Please note that the UTGL does not guarantee the accuracy, relevance, timeliness or completeness of any information on these external websites.


Links to external websites are provided as a courtesy and do not imply UTGL's endorsement of those sites or their content, products or services. UTGL assumes no liability for damages resulting from the use of or reliance upon the information provided herein.

Ready to get started?

Unlock the power of trust with UTGL today. Take the first step by exploring our Trust Platform or create an account for an instantly rewarding experience.

© 2024 UTGL. All rights reserved.

Disclaimer: The information provided on this website is for informational purposes only. It should not be considered legal, financial or tax advice. UTGL makes no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its display or use. All information is provided on an as-is basis.


This website may contain links to external websites that are not provided or maintained by or in any way affiliated with UTGL. Please note that the UTGL does not guarantee the accuracy, relevance, timeliness or completeness of any information on these external websites.


Links to external websites are provided as a courtesy and do not imply UTGL's endorsement of those sites or their content, products or services. UTGL assumes no liability for damages resulting from the use of or reliance upon the information provided herein.