Since introduction of Bitcoin as a valuable retirement fund asset, the significance of blockchain technology has come to influence the estate planning process as well. Estate planning investors with cryptocurrency assets acknowledge blockchain technologies are vital instruments for ensuring a will or estate does not extend into a lengthy probate proceeding. By registering a will, estate, or trust on a blockchain such as “Blockchain Apparatus” or “Proof of Existence,” many of the traditional legal issues surrounding settling executor responsibilities are more readily negotiated. The result: time-efficient distribution of assets or liquidation of those assets on behalf of heirs.
“Self-executed” Registration and Modifications
Modification of blockchain wills, estate, or trust documentation is also easier. Estate holders can now elect to alter inheritance decisions without delay with smart contracts. The platform Blockchain Apparatus allows an estate holder to “self-execute” a will without assistance from an estate planner or attorney. While the verdict is still out on blockchain will execution services, niche market digital legal services specifically for cryptocurrency investors like “Will and Testament Coin” which is in the early development stage, may soon be an option for those planning an estate.
Blockchain Estate Settlement
If the future holds new opportunities in blockchain-registered wills, transfer of those smart contracts still poses some legal challenge. At present, cryptocurrency assets designated for transfer to an heir normally requires that an executor exercise power of attorney in administration of a digital wallet. Although we may be seeing a continuity with traditional estate settlement practices, the legal realm may be altered to override the instrumental use of a designated person, now replaced by a platform that automatically distributes assets from a decedent’s digital wallet to named heirs via blockchain.
Blockchain and NY Legal Reform
When the New York legislature referred Bill AB8780 to government task force operations “to determine the impact of cryptocurrencies on the financial markets” January 1, 2018, the bill revised the state’s technology law defining “blockchain technology” and “smart contract.” New York law currently recognizes the Commodity Futures Trading Commission (CFTC) definition of cryptocurrencies as “commodities” — fiat currency exempt from the current definition of “money” where transmissions are concerned (Application of the Definition of Money Transmitter to Brokers and Dealers in Currency and other Commodities, FIN-2008-G008, Sept. 10, 2008).
More Rule Reform on Horizon?
With new robo-retirement investment planning services gaining in popularity, predictions that no other innovation will impact estate law more than blockchain technology. More specifically, rule changes to power of attorney specifying the legal procedure for transfer of digital wallet assets from a cryptocurrency account may be on the horizon. Blockchain presents an agile solution to estate administration, and modifications of a living will. Any forthcoming legal reforms must ultimately address the risks associated with a ‘do-it-yourself’ estate planning vehicle, and execution of willed assets.
Estate Planning Attorney New York
Protect your family and your assets. A licensed estate planning lawyer can advise a client of legal risk connected to blockchain registration and administration of a will, estate, or trust. Ettinger Law Firm is a licensed attorney practice in New York, specializing in estate planning and probate litigation. Contact Ettinger Law Firm for a consultation about an estate planning strategy involving blockchain registration.
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