E206 How to Set Up a Bitcoin Revocable Trust

<p>Cryptocurrency (such as Bitcoin) is a new and unique asset. It’s sort of like cash, personal property, and intellectual property all in one. You need to plan for this type of asset in a different way than you would for your bank or brokerage account.</p> <p>If you want a revocable trust for your bitcoin, you’ll need both a legal plan and a technical plan.</p> <h2>What to Include in Your Bitcoin Estate Plan?</h2> <p>If you want your trustee to hold bitcoin, you can’t rely on the same old boilerplate trust language. You’ll need to tweak a few things for your legal plan to work.</p> <p> </p> <h3>Opt-out of the prudent investor rule</h3> <p>Most trustees must follow the Prudent Investor rule, which (roughly) says the trustee may be liable for losses if he doesn’t invest the trust portfolio according to legacy investment principals. For example, 60% equities, 30% bonds, 10% cash. This doesn’t work for Bitcoin, since most people still consider it highly speculative. So a bitcoin revocable trust must include language opting-out of the prudent investor rule.</p> <h3>Access to devices and logins</h3> <p><img class="aligncenter size-medium wp-image-9666" src= "https://anthonyspark.com/wp-content/uploads/2021/03/What-to-include-in-your-bitcoin-estate-plan-300x200.jpg" alt="What to include in your bitcoin estate plan?" width="300" height="200" /></p> <p>Make sure to include language that gives your trustee access to your computers, devices, and logins. Without this, your trustee may technically be violating privacy laws.</p> <h3>Keep it flexible</h3> <p>It is important to keep your Bitcoin estate plan flexible since cryptocurrency continues to evolve.</p> <h2><strong>Bitcoin in a Living Trust</strong></h2> <p>With a traditional bank, you'd rename your account so that the trust owns it and not the individual. For example, you’d rename your personal checking account from “John Doe,” to “The John Doe Trust.”</p> <p>But this won’t work if you hold your bitcoin on a centralized exchange. Currently, exchanges don’t open account