The notion that people can become wealthy without any effort is misleading. If you want to accumulate wealth, you’re going to have to put in a lot of hard work. Often, some people might not even enjoy their wealth, so they pass this on to their families. Some popular investment opportunities these days come in the form of stocks and cryptocurrency investments.
However, passing on your stocks and cryptocurrencies can be quite tricky. If you have stocks but not cryptocurrency investments, the family has to follow legal procedures to inherit your shares. With regard to cryptocurrency investments, family members can inherit these, but it comes with special rules. Fortunately, there are now inheritance options available for those who wish for their family members to receive these assets after they pass one.
With that said, here are a few things you must consider so your family can reap what you’ve sown in your investments:
What Are Stocks?
In layman’s terms, stocks can be considered as a share in a company. When you purchase the stock of a specific company, it means that you own part of it. If the company becomes very successful and you decide to sell your shares back to the market, you’re allowed to convert this into money.
If you want your family to receive your stocks after you pass, they have to follow the legal procedures set by law. One of the rules is that you have to maintain your stocks for a certain period. Another rule is that if one of your family members has inherited stocks from you, they cannot sell them for six months after receiving them. They will also have to provide feedback on how they received this in your inheritance tax return forms.
The upside is that your heirs can inherit these right away after you’ve passed away.
What Is Cryptocurrency?
Whether you’re aware of it or not, cryptocurrency is gaining widespread popularity all over the world. The biggest cryptocurrency is Bitcoin, followed by Ethereum. Although crypto prices are very volatile, it’s still considered a valuable asset because it can be converted into money or used for trade-in various platforms.
If you have invested in cryptocurrencies, your family members can inherit these assets after you pass away. However, there are some rules that they must follow first before they can inherit these investments. One of the rules is that by the end of the year following your death, your heirs will have to pay capital gains tax on any unrealized profits made on the crypto assets. They may also receive exemptions for some cryptocurrencies acquired through inheritance.
Additionally, your heirs will also need to appreciate that cryptocurrency values can be extremely volatile. For instance, Bitcoin had a price of less than $1 in 2012 and reached nearly $20,000 by December 2017. It has now reached its all-time high, close to $69,000 as of writing.
What Constitutional Provisions Exist with Cryptocurrencies?
Cryptocurrency is a relatively new type of currency, which is why it might be difficult for your family to understand how cryptocurrencies work. However, if you want them to inherit these assets, then they need to consider the following provisions under the Constitution:
- Ownership: Your family members can inherit directly or indirectly through your will.
- Management: Inheritance of cryptocurrencies not limited to just the act of receiving them but also to how they are used after you pass away. You can provide instructions so that your heirs know what needs to be done with these investments.
- Disposal: There is no time limit for your heirs to dispose of your investments.
Your Family’s Inheritance
Family members who wish to inherit your assets should understand that there might be special rules and regulations for this. As such, they must hire family-law attorneys to make sure the family member qualifies as a legal heir or successor. This means you can’t leave digitalized investment assets to someone who never had any family ties with you.
But family members don’t automatically qualify for inheriting digitalized investment assets. The family member must be able to prove that they have been your family and have been closely connected to you. For instance, family members can inherit cryptocurrency investments even if they were not a part of your will when you passed on.
If your family members cannot prove they can inherit your cryptocurrency investments, you need to make a special arrangement in your will. You must ensure that you have outlined how these digitalized assets should be passed on after you die. This means a set of rules and regulations for inheriting cryptocurrencies must also be included in the will.
Cryptocurrency investments are a new type of asset. Make sure you have your will updated with instructions on dealing with these assets if you pass away before they can be disposed of. This way, your family members won’t have any trouble understanding how to handle your crypto assets and stocks after your death and know what’s available for them as an inheritance.