Inheritance planning is one of the most prudent actions a Bitcoiner can take. Unfortunately, it’s not as popular within the community as one would think, but this reluctance is understandable. Nobody enjoys contemplating their own mortality. Yet, once Bitcoin becomes a part of your life, forward-thinking tendencies often kick in. People start adopting healthier habits and focusing on long-term financial strategies…..Story continues…..
By: Bitcoin News
Source: BitcoinNews
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As a general rule, digital assets that are owned outright can be passed down through a Will. The key is to confirm that the asset in question is transferable — as some digital assets may specify against it. Here are some examples of digital assets that can be inherited: Bitcoin and other forms of cryptocurrency.Because the security of crypto assets is tight, there will be nobody to assist in accessing the account.
In short, if a crypto investor dies without a will and without providing instructions on how to access their crypto assets, those assets are lost forever. Use a trust for digital assets. It may be best to name the trust as your beneficiary for cryptocurrency assets, so they do not go through probate and pass directly to beneficiaries named in the trust. Name a digital executor or trustee responsible for managing your digital assets after your death.
Cryptocurrencies are assets, so they’re subject to probate just like anything else. If there is a will, when a person dies, their cryptocurrency is passed on to their designated beneficiaries. If one person owns all the BTC coins, they have the monopoly to price this cryptocurrency. Moreover, they may decide not to sell Bitcoins. Consequently, people would turn to other cryptocurrencies and use them in transactions where they would otherwise use Bitcoin.
Bitcoin isn’t too complicated to understand as a form of digital currency. For example, if you own a bitcoin, you can use your cryptocurrency wallet to send smaller portions of that bitcoin as payment for goods or services. Bitcoin’s price is known for its volatility, experiencing rapid and significant fluctuations. This can lead to losses for investors who panic sell during market downturns, selling their Bitcoin at a lower price than they initially purchased it for.
Bitcoin roared back to life in late 2023, and then hit an all-time high on March 5, 2024, topping $69,000. But, if you lose money on any investment, you have options. If that’s you, consider declaring those losses on your tax return and see if you can reduce your tax liability — a process called tax-loss harvesting. To transfer Bitcoin to a bank account, sell your Bitcoin on a crypto exchange for fiat currency. Link your bank account to the exchange, complete identity verification, and then withdraw the fiat cash to your bank account.
Withdrawal times and fees vary depending on the exchange.To send bitcoins with confidence, first obtain a Bitcoin wallet. Next, acquire the recipient’s public address and choose an amount to send. Look over the transaction details, then hit ‘Send’.If you find evidence of a crypto exchange account (such as Binance and Coinbase), you may be able to contact these organizations to gain control of the account and the assets inside.
They may hand control over once you prove the decedent’s death, your appointment as their fiduciary, and legal entitlement to them. Crypto currency is an asset, just like any other and as such, is taxable. Gifting crypto currency to your children or anyone other than your spouse or civil partner, may result in you generating a capital gain on their disposal. There are also inheritance tax implications, should you die within 7 years of the transfer. Simple math shows that the average bitcoin holding per person is about 262,500 satoshis.
At $69,000 per bitcoin, that works out to an investment of about $180 to reach the global average bitcoin allocation. A significant majority of Bitcoin holders are small investors, as approximately 74% of Bitcoin addresses hold less than 0.01 BTC, worth around $350 as of November 6th 2023, as seen in Figure 1 below. However, some estimates can be made based on blockchain data and surveys of Bitcoin holders. According to data from Bitinfocharts, as of March 2023, there are approximately 827,000 addresses that hold 1 bitcoin or more, representing around 4.5% of all addresses on the Bitcoin network.
Cryptocurrency is a very volatile asset and unlike stocks, often does not have rationale behind price movements apart from market sentiment. However, based on all of this analysis, I believe that $100K BTC is definitely possible, which means you would need about 10 BTC to be a millionaire by 2030.According to a survey from lendingtree.com, conducted in November 2022, a higher percentage of 38% of cryptocurrency investors have reported to lost money rather than profited, 28% say they made a profit, and only 13% broke even. Be mindful, past performance is not an indicator of future results.
Bitcoin can generally be transferred anonymously from one country to another on various decentralized exchanges, but some exchanges are not allowed to conduct business in certain countries. Because the security of crypto assets is tight, there will be nobody to assist in accessing the account. In short, if a crypto investor dies without a will and without providing instructions on how to access their crypto assets, those assets are lost forever.
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