Crypto Currency – Potential traps from an Accountant’s Perspective -Part 1 of 3

Succession! Succession! Succession!

Crypto Currency investing and use can sometimes create unexpected tax and other issues for clients.  Often by the time an accountant is contacted, or it is exposed to them (i.e., through ATO data matching), it can be too late to adjust plans and investment decisions.  This three-part series of reflective articles from a practising accountant outlines some common traps and possible solutions to help clients through their journey.

I hope hearing this opens your mind to the ‘what ifs’.

As much as people don’t want to know this, everyone does die and we often don’t know when this will happen no matter your age.  Assets that are held or managed by centralised groups such as banks, ASX and Titles offices can usually be accessed through legal means.  However, accessing Crypto Currencies often are not as simple. 

I would expect that in time, unclaimed Crypto Currency fortunes will increase.  For example, if you have Crypto Currency investments or accounts, does anyone else other than you know about the holding, where or how to access your wallet, usernames, passwords etc? If not, how would your loved ones receive/be the beneficiary of your Crypto Currency Assets? They may not receive them at all.

With differing family dynamics, I do not have a perfect answer but hopefully these points get you thinking about estate planning.  In discussion with lawyers, who specialise in estates, some suggest leaving the information with them in a file that they would lock away securely.  These arrangements, however, does not eradicate potential misconduct from them or admin staff, which may also be difficult to trace.  This underscores the importance of having a good relationship with a trusted lawyer who has good systems. 

There’s no one size fits all solution, but if you’re investing in crypto currency, you simply have to think about future proofing your investment.  Talk to us and legal professionals about protecting your future and that of your loved ones. 

About the Author
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Josh Davey , Hobart
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