Chayet & Danzo, LLC Chayet & Danzo, LLC
Law Pay

Call for a Free Initial Consultation

Direct 303-872-5980
Toll-Free 888-472-1088
Email Us


After careful review of the COVID-19 environment, the law firm of Chayet & Danzo, LLC, will be conducting in-person appointments in our offices on a limited basis and with strict social distancing protocols.

During this time, our team will continue to diligently work remotely on all client matters and will maintain communication through email, telephone, and video conferencing. Our main office number, (303) 355-8500 will continue to be answered during our normal business hours of 8:00 a.m. to 5 p.m. Monday - Thursday and 8:00 a.m. to 4:00 p.m. on Fridays.

This decision to have limited appointments in-office while following strict social distancing protocols is in the best interest and health of our team, clients and community.

We will continue accepting new clients during this period as well as fully servicing our existing clients.

We wish you and your family continued health during these unique and challenging times.

Compassion, talent and dedication: guiding colorado families and Their Trusted Advisors During Times of Need

Estate planning issues regarding Bitcoin and other cryptocurrency

Cryptocurrency is a concept first introduced in 2009 with the first offering of bitcoin, the most well known virtual currency. Many people do not understand the concept, but it can be an asset with value, so it should be included in the owner's estate plan. Legal concepts are evolving regarding how cryptocurrency will be passed to heirs or beneficiaries through means like gifts, wills, trusts or by operation of law like other property when someone dies without a will. 

What is cryptocurrency? 

Cryptocurrency is an encrypted digital, virtual (existing only on computers) currency that is not created by any government or central banking authority. Rather, it is created through a process of resolving math problems online, called mining. Bitcoins are used to conduct transactions or for investment. 

The IRS considers bitcoin to be property. Gain from bitcoin transactions is taxable like gain from other property transactions and wages paid in cryptocurrency are also taxable. However, the IRS only taxes transactions if the virtual currency is "convertible," meaning it can be exchanged for real currency like dollars. 

Bitcoin ownership issues 

If someone owns cryptocurrency that is convertible to regular money, what happens to that asset when the owner dies? 

Bloomberg published an article about the accidental death of a 26-year-old man who owned bitcoin of significant value. His father spent three years trying to solve the problem of accessing the currency. According to the article, unless the deceased owner gave someone "the keys to access [the person's] digital wallet," it could be inaccessible and considered abandoned. 

In this case, the son's "wallet" is hosted by a company. A wallet can have an "unlimited number" of addresses, each having bitcoins, so it is impossible to comprehensively identify every bitcoin a person owns unless each of the addresses are known, in addition to the keys.

Cryptocurrency that can have value raises the stakes of leaving the information necessary to access it, including online addresses and private access keys. 

Bloomberg reports that CoinBase, a virtual currency custodian, will keep a customer's keys and in case of death, documents like a will and death certificate could be used to get the assets transferred to survivors. 

Unfortunately, encryption and other protections used to protect virtual currency from hacking also prevent legitimate family survivors from accessing it in case of the owner's death. 

Anyone with cryptocurrency should speak to an estate planning lawyer about how to direct its transfer to beneficiaries of the owner's choice at death, such as in a will (along with providing keys and addresses). This is an evolving area of law that attorneys will follow closely to assist clients in preserving this potentially valuable asset.



No Comments

Leave a comment
Comment Information

Watch Our Firm Video

We are the premier Elder Law firm in the Colorado region. We set ourselves apart from other law firms in the area with our talent, dedication, compassion and ability of our attorneys to handle any case in Elder Law. We serve Colorado families with experience and dignity in your time of need.

View More Videos

Denver Office
650 S.Cherry St., Suite 710
Denver, CO 80246

Toll Free: 1-888-472-1088
Phone: 303-872-5980
Fax: 303-355-8501
Denver Law Office Map

Edwards Office
105 Edwards Village Blvd.
Edwards, CO 81632

Toll Free: 888-472-1088
Toll Free: 1-888-472-1088
Fax: 303-355-8501
Edwards Law Office Map

Aspen Office
600 East Hopkins Avenue
Suite 301
Aspen, CO 81611

Toll Free: 888-472-1088
Toll Free: 1-888-472-1088
Fax: 303-355-8501
Aspen Law Office Map

  • Rated by Super Lawyers Macro Chayet
  • Rated by Super Lawyers Frank J. Danzo, III
  • Member National Academy of Elder Law Attorneys, Inc. TM
  • Avvo Rating 10.0 Superb Top Attorney Elder Law
  • 2015 Five Star Professional Wealth Manager Multi-Year Winner
  • Our new 2015 Medicaid Book: how to protect your Family's Assets from devastating nursing home costs
  • Peer Review Rated For Ethical standards & Legal Ability TM Martindale Hubbell