With the New Year fast approaching, you might be considering diversifying your portfolio with some new assets. And, in turn, those new assets might make their way into your estate plan for your beneficiaries one day. One new asset that has grown more and more popular over the past decade is cryptocurrency. This article will serve as a basic “101” guide to crypto, its advantages and disadvantages, and how it fits in to your estate plan. 

What Is Cryptocurrency? 

Cryptocurrency is a type of digital currency, often used as an alternative form of payment. Crypto is created through encryption algorithms, which means that it is both a currency and a virtual accounting system. Popular cryptocurrencies include Bitcoin, Litecoin, Dogecoin, Ethereum, Tether, Binance Coin, and more. Crypto is usually separated into three categories, much like regular currencies: majors, minors, and exotics.

Cryptocurrency represents a new monetary paradigm, promising to streamline financial architecture and, in turn, make it faster and cheaper to handle money and pay for things. Crypto’s technology means that you can exchange value and money without involving intermediary institutions like banks and governments. 

The State of Crypto

The thing about cryptocurrency, which some view as a negative and others as a positive, is that it is very volatile. Currently, as of December of 2022, crypto is in a bit of a flux. It is a risky investment, and a major reason for this riskiness has to do with the collapse of crypto broker FTX, which incurred a $32 billion meltdown in November of 2022. This has shaken the crypto industry, though, quite possibly, this digital currency will bounce back over time. 

How To Invest In Cryptocurrency

Everyone’s financial situation is different, but there are still similar overarching steps to investing in cryptocurrency. Here is an overview of how to invest in crypto in 2022: 

1. Choose Your Currency. You might choose a major currency, such as Bitcoin or Ethereum, or you may want a minor currency or exotic. According to Go Banking Rates, a financial website, Bitcoin is the best currency in which to invest if you are a crypto newbie. It has been around for a long time, and it has a price and market cap that are higher than a lot of other coins. 
2. Select An Exchange. The easiest way to buy and sell crypto is through an exchange. Popular exchanges include Binance, eToro, TradeStation, Webull, Robinhood, and Gemini. Do your own research to find the exchange that works best for you.
3. Decide How Much You Want To Invest. Lastly, you’ll want to decide how much you want to invest. Start conservatively, especially if you are new, and consider adding this asset to an already diverse portfolio. Once you’ve made your financial decision, you can invest and become part of the crypto industry (as a buyer). Monitor your investment over time to decide whether you want to sell or hold.

Advantages & Disadvantages Of Investing In Crypto

Crypto has its pros and cons, and there are reasons to invest in and reasons to shy away from this digital currency. Common advantages of crypto include: 

• Crypto is protected from inflation, due to its centralization.
• Crypto is self-managed and self-governed. 
• Currency exchanges are easy. 
• Crypto is private. 
• It is cost-effective, in terms of transaction. 
• Crypto is a quick way to transfer funds. 

Disadvantages include:

• Some exchanges have incurred cybersecurity issues.
• The price is volatile.
• There is a lack of inherent value. 
• Cryptocurrency has a scalability issue.
• Crypto has not proven a safe long-term investment yet.

Your Estate Plan & Crypto

So, how does crypto tie into your estate plan? You can leave crypto as an asset, much like anything else, but you must include the keys and other ways to access it. The field of crypto in estate planning is still developing, and the digital currency has presented unique challenges to estate planning attorneys as a result.

While this guide is not the be-all-end-all to crypto information, hopefully, it has gotten you on the path to learning more about this fascinating digital currency and what it can do for you. Visit our website to learn more. 

Christmas is around the corner, and that means that Santa is on his way. This year, consider getting your kids a gift that will truly make a long-lasting impact: a trust fund. In this article, we will discuss what a trust fund is and how it works, dispelling any misconceptions you may have about this important financial tool.

What Is A Trust Fund?

You might know of the term “trust fund,” though you have likely heard it used in a derogatory fashion. Trust funds have a reputation of being only for the uber-wealthy, but that couldn’t be further from the truth. This estate planning tool allows you to put aside money and, if you want, assets that will be distributed to the beneficiaries you name on the trust. The distribution will take place at a later date of your choosing. Basically, a trust fund is created to house money and assets on behalf of another person. 

A trust fund is usually executed and managed by a licensed estate planning attorney. The trust fund requires a grantor (you, in this example), trustee, and beneficiary. The grantor sets the terms for how he or she wants the money gathered, held, and distributed, and the trustee executes the grantor’s directives. The beneficiary, as the name suggests, receives the cash and assets from the fund at a predetermined time. 

What Happens to Money In A Trust Fund? 

Trust funds can contain a large number of different assets, including bank accounts and money, businesses, heirlooms, and other types of investments. The assets remain in the trust fund until certain circumstances are fulfilled. Once these terms are met, the trust fund’s proceeds are distributed to beneficiaries. 

How To Set Up A Trust Fund

There are a few main steps to setting up a trust fund. Everyone’s financial situation is different, but these general steps apply to most people. Here are the steps: 

1. Set Goals. Be clear about why you’re setting up the trust, as well as what terms and assets you want to include. Make sure that your children get what you want them to get. Clarity is very important when setting up this type of document, hence why legal counsel is a must-have.
2. Choose What Type of Trust. Your attorney will help you determine the type of trust that is best for you. For example, a revocable trust, one of the most common types, is flexible, allowing you as the grantor to make changes in certain circumstances.
3. Determine the Terms. Name your trustee, as well as who will get what. Determine distributions and provisions, as well as any other details that will help you achieve your “Step 1” goals.
4. Create The Trust Documents. After making all your decisions and getting your information together, you will set up your trust fund, with legal counsel, abiding by Florida law.
5. Fund the Trust. You can fund your trust through real estate, bank accounts, life insurance policies, and more. The trust will not function as intended until you fill it with assets. 

Advantages And Disadvantages Of A Trust Fund

As with anything, a trust fund has its pros and cons. While a trust fund is far more wide-ranging than you might have thought before reading this article, this financial tool is still not for everyone. 

Advantages of a trust include: 

• You can avoid probate. 
• There may be tax benefits involved (legally). 
• You can customize and control the way in which your wealth is distributed. 
• You can provide for your beneficiaries’ financial future. 

Disadvantages of a trust include: 

• The structure can be complex.
• A trust can be expensive to both maintain and establish. 
• Trustees’ powers are restricted by the trust deed. 

Hopefully, this article has opened your eyes to what a trust fund can do for you and your family. It isn’t just a tool for the wealthy—it is great way for families of all economic backgrounds to ensure their kids have a stable future.  Contact us if you have questions and to get started. 

This might shock some people, but 2022 is coming to an end in less than one month. This year has been eventful, filled with ups and downs, new memes, an election, celebrity kookiness, and more as we have filled out yet another page in this chapter of American history. How did your year go? Did you accomplish everything you wanted? 

As we look back at our year, it is important to consider whether we made progress with our long-term goals. For example, did you set up an estate plan? If you didn’t have this as a goal, you should. In this article, we will discuss why an estate plan is important. If you haven’t set up one in 2022, make this your New Year’s Resolution (and then make sure you then accomplish it). Listed below are the life-changing benefits of protecting your assets and loved ones through an estate plan. 

Beneficiaries Are Protected

When you die, who gets your assets? When we refer to assets, we are talking about property, cash accounts, physical items, and similar possessions. At some point, your assets will no longer be your own and, without an estate plan, they could wind up in the hands of your creditors, if not the government (eek!).

Through an estate plan, your beneficiaries are protected, and your assets are distributed expeditiously, tax-efficiently, and legally. Through documents like a last will and testament, you can ensure that your possessions go to the people you want and no one else, inadvertently.

Here are some of the benefits of a last will and testament, a document that is the final expression of where you want your assets to go after you die: 

• You control what happens to and with your property after death.
• You can leave assets and property to specific people. 
• You can appoint certain persons to manage and handle the distribution of your property. 
• A will can, if done properly, be the “last word,” minimizing disputes and feuds between heirs and other relatives.

A last will and testament is just one example of the many legal documents and tools in an estate plan, some of which you learn about when you read through this article.

Kids Are Protected

If you have minor children (kids who are under eighteen), then you especially need an estate plan, not only so that you can name your children as your beneficiaries, but also so that you can set up guardianship papers. 

Guardianship papers are a “worst-case scenario” type of documentation. These papers detail who will be your kids’ legal guardians in the event that something terrible happens to you (and your spouse, if you have one). Talk to your proposed guardian before appointing them to this big role. Make sure they are willing to take on this responsibility, and ensure that they can take care of your kids’ day to day needs, much in the same way you would.

Probate Is Minimized (Or Even Avoided)

Though a last will and testament must go through probate, a trust does not. A trust is a common tool in estate planning. It is a three-party fiduciary relationship in which the grantor (you) gives title of an asset to a third party for the benefit of a beneficiary. 

At a time you specify, such as when you die, the title to the asset will pass to your intended beneficiary. The trust does not have to go through probate, which protects you and your family’s privacy. It is easier to transfer title of your assets via a trust than if you had to pass through the time and expense of probate court. 

Assets Are Managed Even If You’re Incapacitated

While many documents in an estate plan deal with what to do after you die, there are some, such as a healthcare directive and power of attorney, that involve what happens to you if you are too incapacitated, due to illness or injury, to make decisions for yourself. Through these documents, you can ensure your wishes are still honored. Here is a brief overview of each: 

• Healthcare directive. This “living will” details what you do and don’t want, as far as medical treatment and lifesaving care goes. This document, which often deals with resuscitation and similar procedures, is very personal. It is also important to ensuring your wishes are met, even if you can’t communicate them. 
• Power of attorney. A power of attorney is a trusted person that you appoint to manage your financial and/or healthcare affairs in the event you are unable to make decisions on your own behalf. 

Again, these documents are just two of many examples of how estate planning can help you take control of your present and future. Contact a WFP attorney today to create your own estate plan.