What’s The Afterlife of a Bitcoin?

present a new challenge to inheritance law. There's more and more money pouring into these assets, and people are starting to think about their digital legacies. But how do you pass on something that's built on the principles of anonymity and individuality and that requires both passwords and tech savvy to access. Today, I'm joined by Bloomberg Report to Jill Shaw to explore these questions about estate planning when it comes to crypto. Jill, thanks so much for joining us.

Thanks for having me so Jill. Before we kind of dive into the question of like, how to rich people apostle on their crypto, what made you interested in the story in the first place, Well, I've been thinking a little bit about wealth. I was on the wealth team

at the time. And you know, a lot of people are making a lot of money in crypto, and I've been reporting a bit about people using their crypto through regular payment methods, having credit cards that are like essentially linked to their crypto, and I started to think about, well, where's all this money that people are making in crypto going. And you know, there's an entire world of wealth planning that's out there that is basically still catching up to crypto,

and I wondered how that was going. And when we say wealth planning, as a person who does not myself have a wealth ploto, what do these folks do? You have entire teams of lawyers and other experts who help you structure your wealth, who help you figure out how to pay as little hole taxes on your wealth, who help you, you know, um, pass along your wealth through trust.

So there are entire vehicles and industries around people being able to maintain their wealth, to reduce their tax liabilities, and then to be able to pass it on to their airs. And given that these folks have been around for a long time, they're experts in many different asset classes, but crypto as an asset class has existed for less

than two decades. In your reporting, you know, you shared an anecdote of a gentleman who was like, Okay, I want to do this, and then you interviewed some state planners and they were like cool, So tell us a little bit more about that. It's kind of befuddling for people in the wealth in a state planning world. I mean, if I were to describe the estate planning world, I would say it's kind of a sleepy place. It's like

a kind of stable place. And um, people don't like surprises when it comes to their money, and these people are experts in their not being very many surprises when it comes to your money. And so crypto is kind of the opposite of full full of surprises, full of volatility. And what I found was that this world is still trying to catch up to think about what this what this asset class means. Is it property in the legal sense?

Is it an asset class? Is it closer to gold when they're trying to think about comparisons to other asset classes that they've helped manage before. So there's a lot of open questions. So, you know, wealth planning has clearly been around for as long as there have been rich people who need their money managed. Crypto as an asset class hasn'tly been around for, you know, less than two decades. How are those folks in that industry adapting to these

folks in this industry? I have to say that as an asset class, it's like a befuddling asset class for these people. Estate planning and wealth planning is a very stable place. It's an almost sleepy industry there. People don't like surprises when it comes to their money, and estate planners and wealth planners are experts and they're not being

surprises when it comes to your money. So crypto as an asset and a world is very different from that, and there's tons of volatility, and so all these people are still trying to figure out how do we manage this, how do we make sure there aren't surprises when it

comes to your crypto wealth. So, in practical terms, in the story that you wrote, you found somebody who was actually trying to make sure that his airs, his kids, his grandkids would have access to his bitcoin and his n f T s. What was that like for this person who was trying to figure out how to do that? So this person is a lawyer and so probably has more knowledge than most people about how to pass along your wealth, but holds a bunch of crypto tokens and

assets that need to be described in excruciating detail. Um and so one of the things that I learned over the course of the reporting is that he has a twenty five page document that lays out exactly what websites to go to, which wallets to connect, you know, how to get access to all of this. And you know, one of the things he said, like, I've tried to lay this out as best as I can, but they might need an expert to even be able to access all of it and to be able to move it

around if I were to pass away. So this is kind of somebody who's comfortable taking it on themselves. He's laying out this stuff in documents. He's teaching his children how to use wallets. But in this case he probably has a smaller amount of assets. When you have a large large amount of assets, you do need experts to help you kind of figure out how to structure them.

Thank you, Jill, We'll be right back. One of the other things that I find fascinating, right, like wealth planning depends on the longevity of the institutions that are involved. There's this idea that you die, but in twenty five years, the bank that your money in is still going to be operating, or the safety deposit box is still going to be accessible. Crypto has um slightly more of an ephemeral vibe to it. Sometimes it's not a place that

has a particularly strong tracker code of like consistency. Things disappear, projects go to zero, Entire companies cease to exist in what feels like a very short span of time compared to you know, say a Swiss bank that's been around for hundreds of years. Is that something that wealth managers are also trying to wrap their heads around there, like this website could just not exist in a year, much

less in fifteen. Look, one of the things that I realized is that most wealth managers, most estate planners would tell you to liquidate immediately that to accommodate that kind of risk. They will be like, no, let's immediately liquidate these assets into like FIAT and make sure we can fastlet alog and so you know, I think that those who have like a more complex view of that of crypto,

and probably a little bit more experience. Are still struggling with that, I think, and there are solutions out there to be able to maybe transfer your assets into more stable coins things like as we've learned. So I think that it's still something that they're figuring out, and that is the biggest risk for these wealth managers. I think the quote that you had in this story is, you know, the natural inclination would be to tell clients to sell,

you know, but some people won't listen. Some people will be like no, no, no, My n f T means the world to me. I would like my children to also have this monkey and fair. But valuations are hard, right, So the other elements of longevity is some kind of predictability around how much things are worth. And again, as you mentioned earlier, there's this intense amount of volatility even in a short amount of time, but also frankly over

a longer time horizon. What are some of the strategies that the folks who are embracing that more complex view using to think about things like valuation. It's it's basically to treat it as property in the sense that you want a valuation and an appraisal of the value. And there are different experts out there who can do something like that. But all in all, everyone is kind of

discovering this for themselves as they encounter crypto clients. One of the people that I talked to who didn't make it into this story is someone who used to be a nurse and you know, left their day job to

trade crypto and has made millions in crypto. And he said, I'm basically the guinea pig for every tax professional, financial professional that I work with, And so you know, I think like treating it as property and trying to get an appraisal and then trying to work that into your understanding of the access that you'll have to pay, the vehicles that you might have to use, is the strategy

right now. It does sound like perhaps the kids that were mentioned in that story, by the time they might want to pass on their cryptos to their heirs, of crypto is still around then, we don't know, there might be more infrastructure for them. But you know, right now, I'm getting the distinct impression that trial and error is the vibe of the day. Yeah, I mean, even getting people to tell you where all their crypto is. If you're an estate planner, a wealth planner, is a challenge.

So if you're willing to share that, then estate planners and wealth planners have ways to accommodate accessing that crypto, making sure that there are multiple approvals in place for transactions to happen. But otherwise everyone is kind of doing

it differently and uniquely to each case right now. I like that you mentioned the willingness to share, because for some people, the attraction of crypto is they don't have to tell anybody about it, which is of course in direct contradiction to making it possible for someone else to manage that for you. I remember we have reporting a few months ago about how crypto is becoming an issue in divorce cases, where there was one the question of okay, well,

how do you value this as an asset? Exactly as you're saying, But also you discover, like the hidden wallet that a spouse had that mysteriously had five hundred thousand dollars in bitcoin that wasn't previously declared, So there are

all kinds of ancillary, very interesting issues here. It sounds like, yeah, look, you know this anonymity that's being able to shield your wealth is basically at odds with a system that can distribute it to people when you die, and that's like probably the crux of the issue is if no one knows you have the crypto, or you forget all your keys, then how will your daughters and sons be able to

access it? Question for our times. Thank you, Jill. That was a very helpful and fun explanation and appreciate you taking the time. Thanks so much. You can find more of Jill's reporting on the Bloomberg Terminal on Bloomberg dot com, or or follow Jill on Twitter at Jill R. Shah. On the next episode of Bloomberg Crypto, it's been a wild ride for crypto markets, and the main direction prices

are heading in right now is down. Bloomberg Report is Muya Shan and Matt Turner join us tomorrow to discuss what's been happening to crypto tokens and crypto related stocks like coin base, and why sentiments across all of these markets feel so negative right now. I'm Stacy Marie Ishmael, and this is Bloomberg Crypto, a daily podcast from Bloomberg and I Heart Radio. For more shows from I Heart Radio, visit the i Heart Radio app, Apple Podcasts, or wherever

you get your podcasts. Email your comments, questions, or suggestions to Crypto at bloomberg dot net. Find us on Twitter at Crypto. The supervising producer of this episode is Vicky Vergolina. Associate producer is zan Ab Sudiki. Blake Maples is our engineer. Original music by Leo Sidron. Bloomberg's head of podcasts is Francesco leav