A recent survey found that 89% of Crypto owners are worried if they pass away, their families will not be able to identify and access their Cryptocurrencies. So, what does financial legacy planning look like for Cryptocurrency?
How should you include digital assets in your estate plans? What do your heirs need to know about inheriting these assets? Here are some answers and tips on estate planning for your financial legacy when owning Cryptocurrencies.
What is Different When Crypto is Included in your Estate?
The IRS treats Cryptocurrency, or Crypto, like artwork, that is as personal property; and, like artwork, including Cryptocurrency in your estate has financial implications that require proper planning to ensure that your assets are passed on to your heirs according to your wishes. Here are some important details to consider when including Cryptocurrency in your estate plan:
APPRAISALS. Appraisals are required for any taxable transfer of Crypto (especially NTFs) that do not regularly trade in the market or are illiquid as part of the estate administrative process. It is important to obtain one or more appraisals from certified experts and keep records of them...Continue reading.,…
Dynastic wealth is monetary inheritance that is passed on to generations that didn’t earn it. Dynastic wealth is linked to the term Plutocracy. Much has been written about the rise and influence of dynastic wealth including the bestselling book Capital in the Twenty-First Century by the French economist Thomas Piketty. Bill Gates uses the term in his article “Why Inequality Matters”.
It is further argued that the degree to which economic status and inheritance is transmitted across generations determines one’s life chances in society. Although many have linked one’s social origins and educational attainment to life chances and opportunities, education cannot serve as the most influential predictor of economic mobility. In fact, children of well-off parents generally receive better schooling and benefit from material, cultural, and genetic inheritances.
Likewise, schooling attainment is often persistent across generations and families with higher amounts of inheritance are able to acquire and transmit higher amounts of human capital. Lower amounts of human capital and inheritance can perpetuate inequality in the housing market and higher education. Research reveals that inheritance plays an important role in the accumulation of housing wealth. Those who receive an inheritance are more likely to own a home than those who do not regardless of the size of the inheritance.
Often, racial or religious minorities and individuals from socially disadvantaged backgrounds receive less inheritance and wealth. As a result, mixed races might be excluded in inheritance privilege and are more likely to rent homes or live in poorer neighborhoods, as well as achieve lower educational attainment compared with whites in America. Individuals with a substantial amount of wealth and inheritance often intermarry with others of the same social class to protect their wealth and ensure the continuous transmission of inheritance across generations; thus perpetuating a cycle of privilege.
Nations with the highest income and wealth inequalities often have the highest rates of homicide and disease (such as obesity, diabetes, and hypertension) which results in high mortality rates. A New York Times article reveals that the U.S. is the world’s wealthiest nation, but “ranks twenty-ninth in life expectancy, right behind Jordan and Bosnia” and “has the second highest mortality rate of the comparable OECD countries”.
This has been regarded as highly attributed to the significant gap of inheritance inequality in the country, although there are clearly other factors such as the affordability of healthcare. When social and economic inequalities centered on inheritance are perpetuated by major social institutions such as family, education, religion, etc., these differing life opportunities are argued to be transmitted from each generation. As a result, this inequality is believed to become part of the overall social structure.
- “LSU Law: Louisiana Civil Code”.
- “Contrasting legal conceptions of family obligation and financial reciprocity in the support of older people:
- The New Forced Heirship in Louisiana: Historical Perspectives, Comparative Law Analyses and Reflections upon the Integration of New Structures into a Classical Civil Law System Archived
- Quarterly Journal of Economics,
- “You call this a meritocracy? How rich inheritance is poisoning the American economy”. Salon. Archived
- Inequality – Inherited wealth”. The Economist. Archived
- The ‘Self-Made’ Hallucination of America’s Rich”.
- One in three Americans who get an inheritance blow it Archived
- 70% of Rich Families Lose Their Wealth by the Second Generation Archived
- Journal of Economic Perspectives
- “How do mortality rates in the U.S. compare to other countries?”.
- “Why Inequality Matters”,
- Abolition of Inheritance”.
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