Cryptocurrency has taken the world by storm. Many people are investing in currencies like Bitcoin in the hope of making good returns. If you have already invested or are planning to invest in cryptocurrency, make sure your investment is saved and passed on to your family when you die. To do this, you have to list your cryptocurrency on a family trust.
Note: If you’re looking for transparent and secure cryptocurrency exchange platforms in Australia, consider these:
- Swyftx (Recommended)
- Independent Reserve
What is a family trust?
A family trust is essentially a legally binding document that covers all the grantor’s assets in his lifetime and defines the terms of distributing those assets after the death of the grantor.
This means when the grantor sets up a family trust, he transfers the ownership of his assets to the trust itself but retains full control over these assets.
This estate planning scheme is used to benefit the family members of the grantor — the person who sets up the family trust. The individual who manages the family trust is known as the trustee. The grantor can choose to become the trustee himself. In case of death of the grantor, another authorized trustee takes his place in managing the trust.
Why set up a family trust?
Setting up a family trust can be useful for you and the trust’s beneficiaries in many ways. These include, but are not limited to, the following benefits.
- Solves the unlimited liability problem for the grantor. This means that when the grantor’s investment fails somewhere, his assets that are listed on the family trust are kept safe from the creditors.
- Makes the probate process needless as the assets are already distributed to the trust.
- Ensures that the family of the grantor is taken care of financially after he dies.
- Prevents potential fraudulent ownership claims after the grantor dies.
Benefits of listing cryptocurrency on the family trust
Cryptocurrency is an investment that ought to be treated like other assets. It should be listed on your family trust because:
1. It will make sure that your cryptocurrency is saved and passed on to your family members when you die.
If you die tomorrow without telling your family members about your cryptocurrency investment and how to access it, it’ll be lost and will not be passed on. One way to let your family know about it is by listing it on the family trust along with the directions for accessing it.
Doing this will ensure that your investment doesn’t go to waste and your family members can benefit from it after you pass away.
2. It will grant your family members speedy access to your cryptocurrency by eliminating the need for probate.
A probate is the process which deals with the estate of someone who has died. This process involves courts and lawyers, which makes it costly and time consuming.
If you list your cryptocurrency on the family trust, you won’t need a probate to decide for your estate because you would have already done that. This will get your family members quicker access to your crypto account.
The time saved by doing this can prove to be crucial, especially if you have invested in a volatile currency that needs to be micromanaged frequently.
3. It will keep your cryptocurrency’s information confidential.
The avoidance of probate will not only give your family quicker access to your assets, but also keep your cryptocurrency related information confidential.
If you don’t choose to list it on a family trust, the information regarding cryptocurrency could be made public during a probate, which could put the security of your cryptocurrency at risk.
4. It will get your cryptocurrency an exemption from being taxed.
In Australia you don’t have to pay taxes on the income that is distributed to beneficiaries via a family trust. The grantor can also share this income without getting taxed.
Final Word
The world is seeing a surge in cryptocurrency investment. If you’re also planning to invest in it, don’t forget to a) use a secure and affordable cryptocurrency exchange like Swyftx, and b) list cryptocurrency on your family trust to secure it and ensure that it gets passed on to your kids without too much hassle.