Can NFTs be put in a living trust?
Whether your area of interest is tech or finance, you’ve probably heard your fair share of talk about NFTs. An NFT, or non-fungible token, is a unique virtual asset whose value cannot be replaced. Each token stores the asset’s information, designating the creator and owner of the asset. NFTs are not physical items; rather, people who purchase NFTs receive a digital file like a JPG, GIF, or MP3. Many artists and celebrities have designed collectible NFTs to be bought and traded in a fusion of the art and crypto worlds.
Even if you are an expert in NFTs and blockchain, it can be difficult to know where digital assets fit when it comes to estate planning. Can an NFT be included in living trusts or other estate planning documents? Here are a few things to consider when deciding how to allocate control of your assets that are digital, meaning not physical or tangible.
More to the process
Like any other possession or asset, you want to protect your NFT or cryptocurrency investment. You may even want to pass these assets down to your heirs. While including NFTs in living trusts or wills may not be a common practice yet, it is possible to do so through careful planning.
Since an NFT cannot be physically passed to a beneficiary, you must create a passcode or personal key to be given to the inheritor. This passcode is how to access the NFTs in your trust and ensure that only your trustee and beneficiary can access the asset. It is also important to include explicit instructions for how and when the NFT should be transferred into the living trust to ensure that it is not sold or liquidated in your absence.
Protecting all of your assets
Is it important to you that your living trust assets are managed and distributed according to your wishes? If so, then the estate planning process is crucial to safeguard your property. Not sure if you are up to the task? At the Law Office of David W. Foley, we can help you achieve digital asset protection in a living trust. With our extensive knowledge of U.S. and California estate planning and probate law, our team can take the stress and confusion out of the process. Contact us today to see if our services are right for your needs.