Do you include Cryptocurrency in Your Australian Will?

Answer: YES!

Cryptocurrency has become an increasingly common asset, with its value surging and more individuals investing in digital currencies like Bitcoin, Ethereum, and others. As Australians embrace this (now not-so-new) form of investment, it's crucial to consider the implications of cryptocurrency holdings in estate planning, particularly when drafting a will. Here are some important considerations for why accounting for cryptocurrency in your Australian will is essential.

Recognising Cryptocurrency as an Asset: Cryptocurrency is a valuable asset that should be treated no differently than traditional investments or tangible property when planning your estate. Failing to include cryptocurrency in your will can lead to complications and potential loss of assets for your beneficiaries.

Ensuring Proper Distribution: By explicitly detailing your cryptocurrency holdings in your will, you can ensure that they are distributed according to your wishes upon your passing. This helps prevent disputes among beneficiaries and provides clarity on how your digital assets should be managed.

Tax Implications: Cryptocurrency is subject to taxation, including Capital Gains Tax, when sold or disposed of. Properly accounting for cryptocurrency in your will can help minimise tax liabilities for your beneficiaries by providing guidance on how to handle tax obligations associated with inheriting digital assets.

Accessing Digital Wallets: Unlike traditional bank accounts or physical assets, cryptocurrency is typically stored in digital wallets secured by private keys. Without proper documentation and access instructions, your beneficiaries may struggle to locate and access your cryptocurrency holdings. Including detailed information about your digital wallets in your will ensures that your loved ones can access and manage these assets effectively. Importantly, this information does not go in your will; it is best to document the private keys and place the document in a safety deposit box or similar.

Protecting Against Loss or Theft: Cryptocurrency holdings can be vulnerable to loss or theft, especially if private keys are not properly safeguarded. Incorporating instructions for securely managing and transferring digital assets in your will can help mitigate the risk of loss or theft, ensuring that your cryptocurrency remains protected even after you're gone.

Updating Your Will Regularly: As the cryptocurrency market evolves and your holdings change, it's important to update your will regularly to reflect any new acquisitions or changes in asset value. By keeping your estate plan up-to-date, you can ensure that your wishes regarding cryptocurrency and other assets are accurately reflected and legally enforceable. 

Accounting for cryptocurrency in your Australian will is essential for ensuring proper distribution, minimising tax liabilities, and protecting your digital assets for future generations. By incorporating detailed instructions and regularly updating your estate plan, you can provide peace of mind knowing that your cryptocurrency holdings will be managed according to your wishes.

Please note, this article is general in nature and does not take into account your personal situation or circumstances. For further information please contact Kenney Legal at info@kenneylegal.com.au or contact us via our social media networks.

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