{"id":26669,"date":"2022-11-07T08:00:53","date_gmt":"2022-11-07T14:00:53","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=26669"},"modified":"2022-10-03T12:37:08","modified_gmt":"2022-10-03T17:37:08","slug":"crypto-estate-planning-will-or-living-trust","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/crypto-estate-planning-will-or-living-trust\/","title":{"rendered":"Crypto estate planning: Will or living trust?"},"content":{"rendered":"

Even though most crypto<\/a> traders are under 40, estate planning is especially important for them because of the complexities of the digital asset class and the high value of some investors’ portfolios. The estate planning process involves many difficult decisions, but one of the most important is whether to leave a will and testament, or establish a trust.<\/p>\n

A last will and testament names an executor and passes on the decedent\u2019s instructions for distributing their assets upon their death. A living trust comes into effect before a person\u2019s death. It is a financial agreement that gives the grantor continued control of the trust\u2019s assets until death, at which time control passes to a successor trustee. Wills are typically simpler and less expensive to prepare than trusts, which are complex financial documents that can cost thousands of dollars to establish.<\/p>\n

However, a trust lets an estate avoid probate, something a last will and testament doesn\u2019t do. Probate can be a long, burdensome process for someone\u2019s survivors. Any probate can be difficult, but the process can be especially challenging for those with crypto because it is an asset class that many probate courts and executors don\u2019t know much about.<\/p>\n

I typically advise that crypto investors set up a trust. Here is some guidance you can review and use in your practice.<\/p>\n

Choose a revocable living trust<\/b><\/h2>\n

Revocable living trusts are a good choice for many crypto investors. Although irrevocable trusts may result in estate tax savings for clients, their terms are final. This doesn\u2019t give the grantor the flexibility to adapt the estate to changing personal or financial circumstances. Seventy percent of crypto investors are under 44<\/a>, so there\u2019s a fair chance that they will want to change their trust\u2019s terms before their death.<\/p>\n

Your client needs to name the trust with something like John Smith Living Trust Dated 01\/01\/2000. More importantly, remind them that they\u2019ll need to title any future transactions and accounts in this name. Existing assets will be moved to the trust in a signed statement of transfer, except for existing real estate assets, which will need to be transferred by quitclaim deed.\u00a0<\/span><\/p>\n

Recordkeeping is vital to a smooth estate settlement. It helps ensure crypto assets are included in the trust and accessible by successors. You\u2019ll find more content on recordkeeping in this recent blog<\/a> for the Intuit\u00ae Tax Pro Center<\/a>.<\/p>\n

Benefits of a revocable living trust<\/b><\/h2>\n

There are many benefits to having a trust, rather than simply having a will\u2014some are tax-related and some are not.<\/p>\n

Non-tax benefits of a revocable living trust:<\/p>\n