Anthony S. Park

Today we describe some real-world examples of mistakes made by non-professional executors dealing with probate real estate.

Making it personal with tenants

Often times, a non-professional executor is a family member or friend who has too much history with the tenants.

For example, one of our executors helped the decedent in her final years and felt that the tenants were taking advantage of the decedent (late paying rent, not cleaning up after themselves, poor property upkeep, etc.). So, when the decedent passed, the executor has lots of bones to pick with the tenants: where the tenants parked, the condition of property, etc.

If tenants want to be difficult, they can make probate very difficult. As we’ve talked about before, it can be very hard to get rid of bad tenants in probate, so picking a fight isn’t helpful. For the sake of probate, it’s often best to let it go and move on.

In our example, the executor got into huge fight with tenants and the tenants called the police. A huge production was made, and we had to spend months in litigation to get them to vacate.

When a professional executor is involved, he or she doesn’t have that blood-boiling history with tenants. A benefit of hiring a professional executor is that we don’t get emotionally invested.

Knowing what renovations are worth doing

In the past, we’ve discussed certain renovations that almost always make sense (Episode 254: Best Renovations to do Before Selling Probate Real Estate) These include a fresh coat of paint, cleaning out the home, etc.

We recently had an executor who believed the decedent’s home was fine to sell as-is. Let me tell you that the place was not fine. But the executor had the position that if “it was good enough for my aunt to live there, it’s good enough for buyers.” Perhaps it was something sentimental to her that the house looked a certain way, but that’s not what buyers are looking for.

Because of this, the executor declined even a basic paint job. It is almost certainly going to be a struggle to sell.

Choosing the right broker

Choosing the right broker is tricky, even with a normal sale. You need to pick the right fit for the property and the right demeanor as a seller. Of course, it’s even harder in probate.

Even if you find an excellent broker for the neighborhood, you also need someone who understands probate issues. For example, I am dealing with a situation where neither the buyer’s broker nor the seller’s broker understood that the seller was in probate. So, the day before closing, they said they “need something called Letters Testamentary before we can proceed.” Only then did they learn that the heirs were not in agreement, so there was no property to be sold! It was a huge waste of everyone’s time.

That was an extreme situation, but there are many other nuance situations where if you don’t have a broker experienced with probate, time and money are wasted.

For example, we have an executor who hired the dreaded “friend” broker. Friend brokers can be great, but this is not the time to repay favors to a friend via estate work. Estates are complicated already. The second problem was that the broker was from out of state and didn’t understand local customs. Third, the broker listed the home at a high price. In probate, you want to sell fast, but listing at a high price psychologically pegged the executor’s mind to that unrealistic number. A probate-experienced broker would avoid that situation. High prices turn away buyers who know the area and know that the seller has unrealistic expectations.

When an offer finally came in, the out-of-state broker prepared a binding contract and had the executor sign it. (In New York, a lawyer usually prepares or reviews the contract, because there are a lot of nuances that can cause disadvantages and risk). As a result, this executor unknowingly made some big concessions and promises she didn’t need to make.

These are things we’ve seen a lot lately. We share these scenarios to help you avoid future problems and consider the importance of hiring a professional executor. If you are interested in learning more, please check out my book called, “How to Hire an Executor,” available on Amazon.

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When someone passes away, it is the executor’s job to gather the decedent's assets. What are the Bitcoin wallets executors may overlook? We’ve discussed how to look for common bitcoin key storage (Episode 253 3 Steps When a Bitcoin Owner Dies), such as hardware wallets, software wallets, and seed phrases. But a professional bitcoin executor will also find these others.

Wallets on nodes

Think of a node as your own server on the bitcoin network. Bitcoin is a digital currency, and the way it travels through the world is through nodes. Nodes are intentionally inexpensive and meant for individuals to be able to afford and maintain. Nodes are meant for the individuals to be the backbone of the system, not big companies.

If a professional bitcoin executor sees the decedent was serious about bitcoin, privacy, and decentralization, the executor knows to look for a node. These nodes can even be on a Raspberry Pi or an old laptop, as long as there is sufficient memory space. Why look there? Because these nodes will often have a wallet inside them.

Lightning channels

On a high level, the lightning network is a second layer on top of the main bitcoin network. The lightning layer relies on “channels” between lightning nodes.

Say you use Vemno, and you are hanging out with your friend for dinner. Maybe you owe her $5 for the drink and she owes you $10 for dinner. Venmo is not actually transmitting money back and forth each time you do. Venmo keeps a tally of what is moving back and forth between you, and at the end of the day/week/month, it totals a net amount of dollars to be transmitted from your bank to your friend’s bank (or vice versa). Think of it like an abacus where you move the beads back and forth. Here, the main network is the banks and Venmo is the connector/second layer. Venmo has to hold some money to make sure those transactions happen.

Similarly, if you and I transact with bitcoin, we’re not going to send bitcoin to each other every time. We could set up a lightning channel between us. Let’s say we regularly send $100 between ourselves, so we probably have a channel with about $500. That $500 is locked into the lightning channel between us.

Upon my passing, my executor should close the channel and find out what is owed you and to my estate. A professional bitcoin executor will recognize a lightning wallet, and search for node to close channels to release channel funds.

The example of $500 may not seem like a lot of money. But, if the channel was established a while ago, and bitcoin has gone up in value, it might have a significant value.

Hopefully I got this right. If you are more technically savvy in cryptocurrency, please feel free to correct me!

Alternative exchanges

We’ve talked about the main exchanges before. Nowadays, even non-Bitcoin enthusiasts have heard of Binance, Coinbase, Kraken, and other large exchanges.

There are even more alternative exchanges that focus on privacy, international exchange, etc. They may not even be companies, but decentralized software. A professional bitcoin executor will also recognize alternative exchanges and know how to recover funds on alt exchanges such as Bisq or HodlHodl.

This topic is constantly evolving, and we will try our best to keep you up to date. Please send us your questions and we will do our best to respond!

If you want to learn more about professional executors, please check out my book, “How to Hire an Executor.”

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Business valuation is tricky even under the best circumstances. And the probate process adds a few more twists.

Not turnkey

The first twist is that you are probably not selling a turn-key business. Some people come to us with valuation approaches such as 1) Comparables (what similar businesses have sold for in the area) and 2) Discretionary income (meaning, what sort of income does this business throws off, multiplied by the number of years you expect to earn that).

Both approaches assume the business is fully operational, which isn’t always the case when the owner has passed away. You can’t use the grocery store where the owner is alive and running it as a comparable to the store in the midst of chaos since the owner passed.

In probate, the business often stops upon owner’s death. Even if the business doesn’t stop, the quality of the business tends to head downhill. People usually notice when the business isn’t run by the owner anymore. It's kind of like an “inmates running the asylum” type of situation... Not great for business, and therefore not great for the valuation of the business.

Buyers typically want to step into a seamless, ongoing operation. With a probate business, the buyer is not purchasing an ongoing business, but rather has to re-jumpstart a business that may have been temporarily closed for months. The buyer can’t walk into the restaurant and be open for business the next day with the menu ready to go.

No keyman

Without a keyman, the business doesn’t work. The keyman is so crucial to a business that you can buy “keyman insurance” in case he passes away. When a small business loses its keyman, it loses a lot.

First, there is no transfer of knowledge. If you buy a business from a living owner/operator, he can tell you the tips and tricks of the business. These tips are unlikely documented anywhere, just things that the owner knows.

Second, there are no relationships with customers. Without the owner, maybe some of the best customers don’t come anymore. There are no relationships with vendors who give the business a good deal. They may want to reset their prices and not give the new owner a grandfathered-in deal. Additionally, if the owner/operator doesn’t own the property, the quality of the relationship with the landlord is huge for determining the value of the business. Without a lease, there is no business. Also, since the landlord doesn’t know the new owner, he may want to renegotiate the lease.

Lastly, the keyman is important because valuation is sometimes based on discretionary income (the amount of income the business throws off). Small businesses don’t necessarily report on paper all that they earn. How can the seller convey to the buyer what the business is actually worth – the real income? That conversation between seller and buyer often happens when no brokers or lawyers are present. If the owner passed away, there is no side discussion of actual discretionary income. Without that conversation, is almost impossible to value the business based on discretionary income.

Rapidly declining value

In probate, a non-operational business rapidly declines in value.

First, inventory may be expiring and rotting with every passing day. This is assuming that in the absence of the owner, the business ceases to function or functions poorly.

If the business closes for a couple weeks or months, that may not feel like a long time to an heir who has never run a business. But that is enough time for its most loyal customers to find a new favorite store. Not only that, but closed businesses attract theft and vandalism. A closed business is an easy target for a crime of opportunity.

Lastly, even while the business is non-operational, it is still bleeding expenses (rent, security, taxes, utilities) while no revenue is coming in.

For those reasons, the faster you sell in probate, the better in order to keep the value from falling farther. The longer the business sits, the more money it loses. We have experience in this area and have seen these scenarios first-hand.

If you want to learn more about how probate works, please check out my book, “How Probate Works,” available on Amazon. If you are dealing with a situation like this, please feel free to reach out to me.

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To my surprise, we keep getting calls from Solo Agers in California asking me to serve as their executor and trustee. Let's explain why this is surprising.

California is a leader of professional executors and trustees

I thought that California has a robust and developed industry of professional executors. For instance, California has a state licensing agency: Professional Fiduciaries Bureau. You have to apply to receive a license to be an in-state professional fiduciary. There are also trade groups like the Professional Fiduciary Association of California.

There is a whole infrastructure for personal executors in California that you don’t see in other states. This led me to believe that there is an abundance of professional fiduciaries in California.

Yet, solo agers can't find professional executors in California

While Californians are able to find professional executors, it is hard to find a professional executor that is focused on Solo Ager issues. So, these Solo Agers feel like they’re put into a cookie-cutter plan. For example, some Solo Agers are being told to just leave everything to their kids – even when they are estranged, or they don’t have kids!

Yes, I can be executor outside of NY, including California

For the above reason alone, I want you to know that even though I am based in New York, I can be a professional executor for someone outside of New York, including California.

Just keep in mind that there are some drawbacks when you choose an out-of-state executor. There may be travel costs and slightly less familiarity with local customs. The trade-off is that you’ll have a professional that you are comfortable with. A professional executor is well-versed in administering an estate generally, even if not specific to a certain location’s customs.

Whether you live here or across the country: If you are looking for a professional fiduciary to focus on your Solo Ager issues, it would be my honor to help you.

If you want learn how probate works for Solo Agers, check out the link to my free book, “The Solo Ager Estate Plan.”

Free copy of "The Solo Ager Estate Plan"

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Our clients want a professional executor for many reasons. Most commonly they have no heirs, or their family lives abroad. But those aren’t the only reasons. We’ll share a few recent examples of why clients want a professional executor.

19 Heirs!

Mr. and Mrs. K. are in their 70s, and they want a professional executor for when they pass. They have 19 nieces and nephews as heirs, scattered across the US. Mr. And Mrs. K. do not want to choose from the 19 heirs for a couple of reasons.

First, they don’t want to sow discord by singling out one heir to be executor. When just 1 out of 19 has more authority or power, the others may become jealous or suspicious.

Secondly, Mr. And Mrs. K. know what probate can be like from past experiences. They understand that having 19 heirs across a dozen states is going to be a headache for the executor. Even having two heirs in different states is a hassle, especially when original wet signatures are required on certain documents. Having a professional executor is beneficial Mr. and Mrs. K.’s of situation.

Son cannot manage own finances

People from all walks of life can benefit from hiring a professional executor, not just Solo Agers. For example, Mr. and Mrs. J. have an adult son who, for various reasons, has not taken flight from the nest. Although the son doesn’t live at home, Mr. and Mrs. J. financially support him, including paying his rent.

Understandably, Mr. And Mrs. J. don’t feel comfortable having their son handle their estate. Since he is financially dependent on his parents, Mr. and Mrs. J. need a professional trustee to continue to manage funds and financially support their son when they’re gone.

Executorship would be too much

Some clients don’t want to burden a loved one with the responsibilities of executorship. Ms. H. is single mom with 2 adult daughters. One daughter lives in Europe, so it is unrealistic for her to be the executor. The other daughter lives nearby, but she is busy raising her 3 young kids.

It is simply not realistic to ask either daughter to execute an estate, given distance and everyday business of their own lives. Being an executor is a whole job on top of whatever job(s) you already have in life. As we’ve discussed many times, the probate process can be long and difficult. Not understanding the documents and requirements of probate adds to the difficulty of administering an estate. Let alone, dragging 3 small children with you to the banks!

These are all great reasons for considering a professional executor. If you want to learn more about how a professional executor can help, check out my book, “How to Hire an Executor,” available on Amazon.

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After someone dies with Bitcoin, among all the other chaos, are questions about taxes. How do you pay capital gains from during the decedent’s life? Or if he was a long-term holder, how much capital gains tax will the heirs owe? What about estate tax?

Final year capital gains tax from trading

If decedent was not a true holder, and was buying/selling, there are probably realized gains. You have to sell something to owe capital gains tax.

But how does an executor sort through to find the basis, the sales prices? It's still complicated, because at least for now, cryptocurrency is not a well-established industry and is constantly evolving.

First, check the decedent’s devices for apps that track basis. There isn’t a main app out there right now, so Google “cryptocurrency tax tracking” to see which apps are popular at the time. If you find an app, it’s somewhat good news. The downside is that some of these apps don’t work very well.

Next, check the exchange that the decedent was using (Coinbase, Kraken, Gemini, etc.) Some of the exchange platforms do basis tracking, but again it’s not that good yet. Even traditional stock exchanges don’t always track the basis. So, it’s a bit unrealistic to expect the crypto exchanges to do as good a job of tracking basis. When someone is alive, it’s easier for them to track their own basis. But, like any other estate, things become a bit messier when you're doing it for someone who has passed away. It takes work to reconstruct the portfolio to find the values.

What happens if you don’t find the basis? You can’t wait around forever; at some point the executor must take a position on the basis. Then the executor files the 5495 with the final 1040, holds his breath and waits to see what the IRS says. Obviously, this is what the executor does after LOTS of legwork to come up with the best guess for the basis. Filing with the IRS should not be the first step, and you should have a very strong argument supporting your guess.

Long-term Bitcoin gets stepped-up basis

Like all other capital-appreciated assets (homes, stock, etc.), Bitcoin will get stepped-up basis.

As a quick review, the basis is your adjusted purchase price. If you bought a house twenty years ago, your purchase price is your basis. Same with stock. If you bought stock for $50 a share ten years ago and now it’s worth $500 a share, you made a ten-fold increase.

Capital gains are calculated by what the asset is worth now (when you sell) vs. what you paid for it (when you bought it). When a person passes away, there is a very rare freebie from the IRS called the “stepped-up basis.” If you bought Bitcoin for $1 and it’s currently trading at $100,001, your gain is $100,000. You’d owe a lot of tax on that. But, if you pass away and your heirs get it, their stepped-up basis becomes $100,001. If the heirs sell it the next day for $100,002, their capital gain is $1.

Long-term Bitcoin holders may have SIGNIFICANT gains, so passing it on to the heirs could be a huge tax benefit.

Estate tax on Bitcoin

Is there estate tax on Bitcoin? Yes, it is an asset, just like anything else. Estate tax is a tax of your net worth upon your passing. Your executor or heirs need to put together a balance sheet or list of all your assets, minus liabilities, and present it to the IRS.

The good news! Most people do not need to worry about estate tax because, currently in 2022, the tax only applies to estates over $12mm (and $24mm married).

However, there are probably some Bitcoin holders that are very close to being over the exclusion amount. Earlier, we discussed the stepped-up basis to avoid the capital gains tax. But, if your gains have gone up so much that you’ve shot past the estate tax threshold, you’re trading capital gains tax for estate tax. If your estate is worth that much, you should consult with an attorney or an accountant.

This topic was based on a question from one of our listeners. Thank you and please keep the questions coming!

If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your situation.

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What happens during a late probate, meaning you don’t begin the probate process until many years after death? In a recent case, we probated an estate 40 years after death. This case study shows just a few problems with late probate.

Creditors get impatient

Creditors are usually patient, and they understand that when someone first passes, they won’t get the decedent’s money immediately. Once the creditors know that the estate is opened and the attorney is involved, they sit tight for a bit.

BUT, if it’s been a decade – or four in this case - they understandably get impatient. Creditors need someone to sue to get their money; they can’t sue a dead person. If no one is appointed as executor, then there is no one to drag into court. Eventually, if the heirs don’t probate, then creditors will ask the court to appoint someone (usually the Public Administrator, a court-appointed stranger) to be executor/administrator. The creditors aren’t going to request that an heir be appointed; it will be a court-appointed person who has no relationship to the estate.

Multi-generational probates

If you wait decades to probate, then you will likely end up with multi-generational probate. As time lapses, more people will pass away.

For example, granddad passed away 40 years ago, and no one probated his estate. Eventually, his kids and grandkids will pass away too. Granddad died in 1970 and was survived by five sons at the time. Since then, two of the sons and even some grandsons have passed away.

In this situation, courts will usually require you probate in reverse: starting with the grandsons’ estates, then the sons’, then you will be allowed to probate granddad’s estate. Why? Granddad’s estate requires someone to represent the interest of his five sons. But, if two sons died, there is no one to represent those sons. Someone needs to be appointed for the deceased sons’ estates. But, if those sons had sons (grandsons of the granddad) who passed away, then you can’t set up the two sons’ estates until you set up the grandsons’ estates.

That’s why you have to work backwards: you set up the grandsons’ estates, which allows you to set up the sons’ estates, which allows you to set up granddad’s estate. If this all sounds like a mess – it is.

We get calls from grandkids who haven’t probated; they just keep living in the grandparent’s home after his passing. But now the grandkids want to sell the home and they don’t realize the amount of work ahead of them. A lot can happen in 40 years. In this case, it took a week’s worth of emails and phone calls just to figure out who is who in the family tree.

Tenants get too comfy and won’t leave

If tenants stay in the decedent’s property even for a year, they get very comfortable living there. They are used to staying in the house without rent increases and act as if it is their own place. The tenants generally do not want to leave. This is true of both family members of the decedent and also unrelated tenants.

If the tenants act like this after a year or two, imagine if the tenants have stayed in the house for decades. Because they have been maintaining the home for decades, they get upset when an executor comes in and tells them that they have to pay more rent or leave.

We’ve highlighted three of the problems that can happen if an estate is probated late, especially after 40 years. These are problems that can be fixed but be ready to have a lot of patience through the process.

If you want to learn more about how probate works, check out my book on Amazon, “How Probate Works.”

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What happens if you become a Solo Ager later in life? How does this happen? How does this affect you toward the end of your life? And what are some consequences to your probate estate?

Let’s review “Ms. B.’s” situation and discuss.

How Ms. B. became a Solo Ager late in life

Ms. B. was married with a daughter, so she was not your typical Solo Ager. Her adult daughter moved far away out of state. The daughter was not quite estranged, but not much involved either. They stayed in touch and were friendly, but the daughter was effectively estranged, as she was not there to see to her mother’s care.

Then, Ms. B.’s husband got sick and passed faster than anyone expected. So, Ms. B. was alone, rather unexpectedly. Ms. B. did not have a solo-ager plan, or a support network established, because she did not expect to be in this situation.

How Ms. B. got a court-appointed guardian

As is common, sadly, soon after her husband passed, Ms. B. degraded physically and mentally. As mentioned earlier, because she didn’t expect to be a Solo Ager, Ms. B. had no support network. Once she was hospitalized, there was no one to whom the hospital could release her. So, she was shuffled from rehab to a nursing home.

Wanting to go home and understandably frustrated, she was deemed “uncooperative.” This led the nursing home to petition the court for a guardian appointed for Ms. B. (a court-appointed stranger). The court-appointed guardian was a nice attorney, but he had never met Ms. B. before. Now, this court-appointed guardian is responsible for carrying out her wishes, and he understandably has no idea what those wishes are. His job is to help her get out of the nursing home and to keep the nursing home from compelling her to take medication that she didn’t want. Unfortunately, the guardian was unable to remove Ms. B. from the nursing home before she passed away.

Why a court-appointed guardian makes probate harder

Though Ms. B.’s court-appointed stranger was a nice, professional attorney, he had no prior relationship with Ms. B. As with most guardianships, there is a disjoin between the guardian (who has control of the funds) and the estate.

The guardian, upon Ms. B,’s death, has to make sure the court approves of how he conducted himself during Ms. B.’s life. The guardian has to keep records of how the money was controlled and spent under the guardianship. If the court approves of how the guardian conducted himself, then the guardian gets released. This may sound simple, but we’re talking about a check register that could span a few years. (When we saw Ms. B.’s register, it was pretty thick).

Also keep in mind that Ms. B. was not his only client; he probably has dozens of others.

The accounting procedure could take months or years after the client passes away. During this time, the executor (me, in this case) and the heirs are stuck waiting. There are things we need to take care of, and that is hard to do without knowing about or having access to the estate’s funds.

For example, Ms. B.’s apartment needed repairs to leaks and mold, as well as some renovations just to get it ready for sale. The accounts are stuck with the guardian until the accounting is complete. Until then, the executor has to bootstrap and even take out loans to take care of the necessary expenses.

How can one avoid this situation? If you even suspect that a guardian may soon be required or forced upon you, then you should make a revocable trust. When creating a revocable trust, YOU choose the trustee who will manage your funds. Secondly, it's a seamless transition from the person managing your money while you were alive to the same person managing your money after your death. Lastly, this could help avoid court delays during probate.

I hope this helps you understand what could happen if you become a Solo Ager late in life. Below is a link to my book that sheds some additional light on the topic.

Free copy of "The Solo Ager Estate Plan"

Complete this form to receive your complimentary copy of Anthony’s Amazon best-seller, “The Solo Ager Estate Plan”

 

Every bitcoin estate plan must include a simple, easy-to-understand letter of instruction to your heirs or executor. If you don’t, all of your hard-hoarded bitcoin may disappear.

Explain Bitcoin to a Child

Keep it super simple! Write the letter like you are explaining bitcoin to a child. Do not give the whole history of bitcoin, block chain, sound money, etc. Just write enough to get them past this treacherous stage: handling new and complex assets while grieving.

In your letter, write about:

1. High-level concepts;
2. Major pitfalls to avoid when working with cryptocurrency; and
3. Immediate to-dos or checklist.

Bitcoin vs Banks

Most of your heirs understand banks and brokerage accounts. So, explain how bitcoin is different. Explain that cryptocurrency can be lost forever if handled wrong, unlike dealing with a bank. There is no password recovery.

If your heir is a little more financially savvy, explain that bitcoin is like a bearer instrument. Bearer instruments are certificates where whoever holds them owns the money. (Cash is essentially a bearer instrument). When you give someone your bitcoin keys, that person has complete no-consequence access to your funds. No one will check their ID or verify their signature.

Where You Store Your Bitcoin

In your instruction letter, explain where you store your bitcoin keys. You should have a rough inventory of what you’re holding so your heirs know what to look for. Most bitcoiners have a little bit on an exchange (Coinbase, Binance, Gemini, etc.). You may also have some hot wallets online (apps, browser extensions, etc.). Lastly you may have cold wallets, which are not connected to the internet at all (hardware or paper certificate).

It is important that your instructions are in a letter, not in your will. Your holdings could change, and you won’t want to update your will for every change.

Next, explain how the heirs can access the items on your inventory.

Exchanges are simple to explain, because they are more similar to banks than anything else. You heirs will send the death certificate and letters from the court and the exchange will turn over possession to the heirs.

Wallets are a little different. A good solution for a hardware wallet is to give a clone wallet to an executor or heir and give the PIN to someone else. Or you can split up a seed phrase and pass phrase among different heirs and they must collaborate to access your bitcoin.

Bitcoin letter of instruction example

If you're reading this, I'm either dead or incapacitated. If I'm not dead or incapacitated, PLEASE STOP READING NOW.

This letter is about my Bitcoin and other cryptocurrency, and how to access them. I won't even try to explain everything about Bitcoin here, but I want you to know enough to not get robbed or lose everything.

Some important high-level concepts:

(1) Cryptocurrencies can be lost, forever! There's no FDIC, or bank customer support to stop payment or reverse a bad transaction. Once it's gone, it's gone.

(2) There's no password reset or "recover lost password." If you lose the passwords (known as seed phrases, I'll explain below), Bitcoin and other cryptocurrencies are gone forever.

(3) Bitcoin and other cryptocurrencies are "bearer" assets, like cash. Whoever holds it, owns it. So if you hand someone the seed phrases, it's like handing them an untraceable bag of cash.

Nervous enough? No worries, Just follow these instructions, and you should be fine.

On Exchanges

I hold some Bitcoin and other cryptocurrencies on the following exchanges:

- Binance.com/Coinbase.com/Gemini.com

This is the easy part: just ask my executor or probate lawyer to contact the exchange with an original death certificate and letters testamentary, and they'll give further instructions on how to transfer my Bitcoin and other cryptocurrencies.

Now it gets harder.

On Hardware Wallets

I also hold some Bitcoin and other cryptocurrencies on hardware wallets. What's a hardware wallet? It looks like a large USB thumb drive, and my passwords/seed phrases are securely stored inside the device. You need my PIN code to access my hardware wallet.

My hardware wallet (and duplicate copies) are located:

- Describe locations

You should automatically receive an email with the PIN within six months of my death (I set up a "Dead Man's Switch"). Just remember: anyone who has both my hardware wallet and PIN has full, irreversible access to the Bitcoin and other cryptocurrencies inside.

Seed Phrase

If you cannot find or access any of the hardware wallets, you can still recover my Bitcoin and other cryptocurrencies using my "seed phrase." This string of 24 ordered words is the secret password to control the funds, even without the hardware wallet device.

I've given the first 12 words to these trusted people: Bart, Lisa, and Maggie

And the second 12 words to: Moe, Larry, and Curly

Contact whoever you need to complete the 24 word seed phrase. And remember: whoever has the full 24 word phrase has full, irreversible access to the Bitcoin and other cryptocurrencies inside.That's it.You probably won't be able to navigate all this without some help.But at least you now know how to find and protect the hardware device and seed phrases while you figure out the rest.

Also, consider choosing an executor who understands bitcoin custody. If you want to learn more about how a professional executor can help , check out my book, “How to Hire an Executor,” available on Amazon. I don’t have a Bitcoin chapter yet, but you'll get a sense of how choosing a professional can make things easier, especially for something complicated like an estate that includes Bitcoin.

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One of our podcast listeners asked: “Is it possible to open a Binance account that is funded by a trust account? If so, does that by default make that particular Binance account a trust account with the beneficiaries named on the bank account that is used for funding it?”

Great question! To answer it, we need to break it down a bit:

What is a trust account?

There are a lot of different names for a trust account at a bank: ITF (in trust for), Totten trust, TOD (transfer on death), POD (paid on death), and other similar names. Basically, it is beneficiary designation that is added to your bank accounts.

It’s the same concept as life insurance policy: when you completed the forms, you most likely named who gets the account when you die. They become the beneficiaries on this particular policy.

A trust account at a bank is not the same as creating a Trust for estate planning purposes. I believe the question here is: “Does the Binance account take on the beneficiary designations that are on the original bank account?”

Do beneficiary designations transfer with funds?

The answer is NO. If you send money from your Citibank bank account to a Vanguard account to buy some stock, the Vanguard account does not automatically inherit your Citibank beneficiary designations. You’d have to fill out forms at Vanguard to name beneficiaries.

Beneficiary designations do not follow the dollars. That’s the case for moving from bank account to crypto exchange, as well.

How to name beneficiaries on cryptocurrency exchange

What is a cryptocurrency exchange? The big ones like Binance, Coinbase, Kraken, Gemini, are like E-Trade or Robinhood for cryptocurrency. And as of now, you can’t name beneficiaries on the account.

A main reason is most likely due to the fact that the laws are not set up for that yet. Therefore, cryptocurrency exchanges don’t offer that feature. So, you will need to make a Last Will and Testament or move your crypto off the exchange to a wallet that can be governed by your revocable trust or your will.

If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.

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