One area of estate planning that is largely overlooked is funding the trust. The first step is developing the trust. The second step is ensuring that all the assets you want included are properly transferred over as needed. This can be especially difficult in today’s digital-driven world because there are more and more places where funds can be stored away. Thanks to the advent of the internet and digital banking, funds are no longer just kept in savings accounts and piggy banks. Instead, they are spread across various apps, like Venmo and PayPal, stored in digital savings, like Capital One or Ally, and even invested in cryptocurrency. As we kick off our mini-series on funding trusts and managing assets, we’re dedicating this one to all things digital assets and how you can ensure your heirs can access them after you’re gone or in the event of incapacity. You don’t want to miss out – Tune in now!
Time-stamped Show Notes:
0:00 Introduction
1:45 In this episode, we’re putting an emphasis on digital assets, and to start us off, we’re looking at apps designed to move money around, such as Cash App, Venmo, and PayPal. What happens if you still have money in these accounts after you die?
5:15 Every platform has its own set of procedures, so it’s important to know how they operate to ensure proper planning and the protection of your funds.
7:11 If you have any cryptocurrency, you’ll want to tune in here as we discuss how you can ensure your investments don’t become forever inaccessible.
9:51 Our last word of advice on the topic is to write down your login information and ensure someone else knows how to access your digital assets.
Transcript:
Hello, everyone. Welcome to Absolute Trust Talk. I’m Kirsten Howe, and Madison Gunn is here, as usual. We don’t have a celebrity death to talk about this week, but we do want to start a little mini-series of episodes on one of our favorite topics. Madison has said this many times. We could talk about this every single week because it’s needed. It’s necessary because we see these problems all the time.
We’re going to be learning lessons not from celebrity estate plans but from our trust department, our administration department, and our after-death department. The topic I’m talking about is funding. Funding of your trust and how we deal with these assets after death. Today, we will be talking about not so much funding but unusual assets that we have to think about and deal with after death and ideally plan for during life.
Madison, do you want to start us off? Yeah. Normally, for funding, we tell you to go to the bank and change your accounts. But what about the accounts that you can’t go somewhere? You can’t go to CashApp, you can’t go to Venmo, you can’t go to PayPal. But you can’t walk in and talk to somebody. Your account is probably not even titled with your name and social security number like a normal bank. We’re going to talk about digital money and cryptocurrency a little bit because I don’t know if that’s digital money or not, but it has some sort of value. It’s digital something. I might have a law degree, but I don’t know what cryptocurrency is. We do know how it’s treated if you die or become incapacitated, so we’ll talk about that.
The big one is what everyone uses to split a bill at a restaurant or pay someone back – anything of that nature, Cash App, Venmo, or PayPal – not Zelle, because you don’t hold money in Zelle. That’s just peer-to-peer only. Right, so for those apps that you just mentioned, what they have in common is you move money to them, and then they move it to who you are directed to. You could pass away, and they’ve got some of your money. It’s not in your bank account, it’s not in your friend’s bank account, it’s in the middle. Right, you have to actively move it. If someone pays you, you have to actively move it into your own bank account. It doesn’t automatically go into your account. It will sit there in your Venmo until it gets moved into a bank account. Yeah. Okay. It’s making me want to go check my Venmo to make sure I don’t. I was like, “Oh, I did just get Venmo money. Did I transfer it out? I know I spent it already, but did I actually move it into my checking account?” Yeah.
These types of accounts typically can’t be titled the name of your trust. It might not even have your name on it. It might just be your email address. You know, it’s not anything. I mean, I guess some of them might report to the IRS now because there have been some changes, so they might have identifying information, but you still can’t title it the name of your trust. And you may or may not be able to put a beneficiary on it. Unfortunately, each one’s a little tricky. You have to go through what each business requires to ensure that this ultimately goes to your trust or avoids probate.
Right, that’s something that I know we all do. We all carefully read the Terms of Service before signing up for the new thing we just heard about on the internet. But on the off chance that you didn’t read the terms of service, and you don’t know, I think they each have a process, their own unique process that you would go through if you are somebody’s executor or administrator or survivor in order to get that money that’s in the account. So, you have to investigate that.
Yeah, it’s something that, even if there’s not enough money in it to trigger a probate in California, many companies will require a probate to gain access to it. The issue is not usually the amount. Who’s keeping a hundred eighty-five thousand dollars in their Venmo account? Not likely. I mean, it’s not going to be a big issue in terms of the – the issue is not the dollar amount, the issue is someone needs to get that two hundred dollars that you have sitting in there. And they should and have a duty to get that two hundred. They have to get it. They have to go get it or get all the beneficiaries’ permission to abandon it. Right. What happens if it costs more money to get it than it is to abandon it? And you’re going to get.
But if somebody dies, they generally, at least the ones that I looked at, do have a process that doesn’t necessarily require letters of administration or letters of testimony. In other words, it doesn’t necessarily require a probate. You have to look at each one, and they will change over time. Yep. So, you know there’s nothing you can say, “I know for sure what’s going to happen,” until it happens. Yeah, the important part is disclosing everything to your estate planning attorney so we can talk about it and ensure that you follow each company’s procedures.
To the extent we’ve already talked about it, you would do the same for your Gmail account, Facebook account, or other things like that. You know, everybody has their own procedure and even banks – even though we do things in a standardized way for bank accounts, you still have to follow each bank’s – every bank is different. There’s not a uniform act regarding financial institutions anywhere.
Some of this might apply to online savings accounts, too, like Capital One or Ally, that maybe started as a lending company and ended up being an online banking company. They might apply the same way, right? I think an important point from a planning perspective is to make sure, in your planning documents, you authorize your person, whether it’s a trustee or an executor or an agent under a Power of Attorney, to deal with these kinds of digital assets. You want to make sure your planning documents say that.
And then there’s the quick and dirty advice: Make sure that your login credentials are available and accessible, even if you pass away. It’s so much easier for someone to log in and move the Venmo money into your checking account than to try and jump through Venmo’s hoops.
I think there’s a little bit of a caveat, though, on that. We don’t want anyone getting in trouble. Right. Yeah. We don’t want to run afoul of what regulations exist, especially criminal ones. If you’re going to do that, it’s not your money. It’s your fiduciary responsibility to ensure everybody else gets their share of that money.
One of the other topics that goes with this digital money is cryptocurrency or Bitcoin because I don’t know anything else. What was the name of that company? FTX was like the brokerage, right? The one that went down. Yeah. Well, there’s like Dogecoin. I don’t know. There are many other types of cryptocurrency, but Bitcoin is the number one everybody recognizes. Yeah. They have ETMs. They’re like the Jell-O or the Kleenex of Cryptocurrency. Yeah.
The problem with cryptocurrency, at least in this aspect, is that it’s designed to be anonymous, right? There are no names on it. it. It’s just a, I don’t know, 40-character code. That’s the title of your account. And then you have login credentials and all that. That’s if you have it in a wallet, if you have it in, like a brokerage account, brokerage-ish account for cryptocurrency, like Coinbase or formerly like FTX, although if you did, I’m sorry.
In Coinbase, you know, you have a login with them, but it still doesn’t – they don’t allow you to name things in a trust. It’s just attached to your email address. There’s nothing, you know, you might have to report cryptocurrency transactions now, but I think that’s a self-reported thing. For example, Bitcoin is not reporting to the IRS. So, nothing’s really on your Social Security number, things like that. You have to be very careful. We’ve seen the news stories, right?
Someone lost the hard drive with their – what do they call that? Your code? And it’s worth millions of dollars, and they’re searching a landfill for it. Same thing, you have to ensure that your executor, trustee, agent, or Power of Attorney can access this somewhere. Yeah. That’s the only thing. Maybe you can open a probate and get a judge to issue a court order saying, you know, “Bitcoin, you got to turn this money over,” but I wouldn’t count on it. It’s not set up that way. It’s meant to be stealthy. It’s meant to be hidden. And they are just not going to turn it over unless you are able to log in. Right. And they’re not held to any banking standards or federal regulations. You’re not going to have any help. There’s not really jurisdiction. That’s why they’re not going to take a court order. Very important if you are an owner of any kind of cryptocurrency to make sure somebody knows how to get in there if you aren’t able to.
Okay, anything else about that? That’s a kind of a downer. We’re like, we have no hope for you. Nothing to offer you. If you’re making millions of dollars on crypto, and we have had clients who have gotten in and gotten out with crypto at the right time. If you have that, I’m sure you can keep all of that wallet information or key information secure. Just make sure someone else knows how to access it. Right. You know, it’s like putting all your important stuff into a safe and not giving that code to anybody else, and then you die. It’s not helpful. Somebody else has to know or at least know where to find it. We at least know where to look. Okay, good advice.
Thank you, Madison. Thank you all for joining us. I hope you learned something useful, and we look forward to connecting with you next time.
Resources Related to This Episode:
- Absolute Trust Talk Episode 109: Wondering How NFTs are Changing the Future of Fine Art?: https://absolutetrustcounsel.com/109-wondering-how-nfts-are-changing-the-future-of-fine-art/
- A Will is Not Enough – Securing Your Legacy with Estate Planning Life can change in an instant. A will is not enough to be prepared. Get free access to our actionable E-book Guidebook #1 and start protecting your legacy today. https://absolutetrustcounsel.com/guidebooks/
- Learn how to comfortably define gray areas and assess your own unique needs to effortlessly build a secure future now. Check out Guidebook #2, Estate Planning Beyond the Basics, here > https://absolutetrustcounsel.com/guidebooks/
- Get our free introductory guide to the most used estate planning tool, family trusts, and understand how we plan to help protect your family. Guidebook #3: https://absolutetrustcounsel.com/guidebooks/
- Absolute Trust Counsel would love to offer access to our Incapacity Planning resource page: https://AbsoluteTrustCounsel.com/Incapacity-Planning/. We’ve collected our top planning information all in one place so listeners can find videos, guidebooks, blog posts, and a host of information with tips and strategies on implementing, planning, and protecting themselves and their loved ones.
- We’re pleased to provide a library of e-books to address common estate planning questions and concerns in practical, easy-to-understand language. https://AbsoluteTrustCounsel.com/Resources/.
- ASK KIRSTEN: If you’d like Kirsten to answer your question on the air, please email her at Info@AbsoluteTrustCounsel.com.
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