What to Know about Estate Planning for Digital Assets

Bloomberg Tax Management Estates, Gifts, and Trusts Journal

Introduction to Blockchain and Digital Assets

As Digital Assets become more accepted by the investing public, whether as part of a diversified portfolio or as an alternative medium of exchange, attorneys, advisors, and valuation professionals must become equipped to advise owners of Digital Assets about how to value and dispose of these assets as part of their estate planning.

Once upon a time, only governments created and issued currencies (often referred to as ‘‘fiat currencies’’). Now, developers create cryptocurrencies that are held in digital wallets. These cryptocurrencies, sometimes referred to as virtual currencies, alternative currencies, digital tokens, or ‘‘coins’’ (collectively, ‘‘Digital Assets’’) are digital stores of value that allow for immediate transactions and borderless fund transfers.

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“What to Know about Estate Planning for Digital Assets,” by Michelle Ann Gitlitz, Mark Shayne,* Sean R. Weissbart, and Jennifer L. Zegel,* was published September 2019 in Bloomberg’s Tax Management Estates, Gifts, and Trusts Journal (Vol. 44, No. 5), a publication of The Bureau of National Affairs, Inc. Reprinted with permission.

This article was subsequently reprinted in Bloomberg Tax’s Daily Tax Report and included in Bloomberg Tax’s Insights newsletter in October 2019.

* Jennifer L. Zegel is the practice leader of the Estates and Trusts group and partner in the Business and Finance Department at Kleinbard LLC. Mark Shayne, ASA, is a managing director at Empire Valuation Consultants, LLC, and practice leader of the Hedge Fund & Private Equity effort.