Transcript+
Thank you for joining us this week. We're excited to bring you a webinar recorded last week by On Ramp Media on the topic of Bitcoin inheritance planning. This webinar features speakers Cam Stromi, On Ramps Head of Private Wealth and Amanda Keita, an attorney in the Trust Estates and Personal Planning group at Stradley, Ronan Stevens and Young LLP. Amanda concentrates her practice in the areas of estate tax and business planning as well as a state and trust administration with a focus on estate planning for Bitcoin and cryptocurrency holders. Cam and Amanda provide insights on securing Bitcoin for the long term and establishing an inheritance plan. The discussion covers key management, the custody landscape, multi institution custody, legal title, taxes, estate planning documents and trusts. The conversation covers a range of topics related to estate planning for Bitcoin and other digital assets. It includes discussions on trust, powers of attorney, gifting, tax planning, international structures in the process of setting up an inheritance plan. We hope you enjoyed the discussion. If you have any questions on any of the topics discussed, please reach out to a member of our team at on rampbitcoin.com/contactus. All right. I think we can get into it now. So thanks again, really appreciate you all carving some time out of the day to join us. As I stated at the top of this and as you know from registering, this is the Bitcoin inheritance planning webinar and would like to remind you before we get into it that the session is being recorded. So we'll share the recording on the On Ramp Media YouTube page, all of your favorite podcast platforms, and then via e-mail after the fact. Additionally, if you're interested in learning more about On Ramp and our suite of products built on multi institution custody, please visit our website at on rampbitcoin.com. We have products that are suitable for private clients, enterprises, advisors and asset managers. So without further ado, I would like to introduce our speakers today, Cam Stromi and Amanda Kita. Cam is the Head of Private Wealth at On Ramp where he leads our strategy and cultivates and manages relationships with our growing client base of individuals. Cam's background spans traditional technology and Bitcoin financial services. Namely, Cam has onboarded hundreds of clients to multi state Bitcoin custody solutions and has a deep expertise in guiding clients to safely secure their Bitcoin wealth. Amanda is an attorney in the Trust Estates and Personal Planning group at Stradley, Ronan, Stevens and Young. Amanda concentrates her practice in estate tax and business planning as well as the state and trust administration with a focus on estate planning for Bitcoin and cryptocurrency holders. So as you all know, today's topic is Bitcoin inheritance planning. This is a topic that could be quite complex in the world of traditional assets, let alone Bitcoin. But fortunately Cam and Amanda have prepared a detailed presentation and remarks to provide insights on how to secure your Bitcoin for the long term and how to establish and and or refine your Bitcoin inheritance plan. So this webinar will provide a detailed overview of the intricacies associated with Bitcoin inheritance planning and the role of multi institutional custody and preserving Bitcoin ownership across generations. And we hope at the end of this webinar the you'll be more informed and have actionable steps to help secure your Bitcoin legacy. And one final note. Today's presentation will run for approximately 30 minutes and then we'll open up for Q&A with the remaining time. So please, as you think of them or if you had any coming into this, please submit your questions in the Q&A function in the Zoom throughout the presentation and we'll address as many of those as we can at the end. So now with that, I would like to hand over the presentation to Cam and Amanda. Thanks Jackson, and thanks everyone for joining to discuss everyone's favorite topic. Death, you know, facing our own mortality. Always fun, but you know, of course, incredibly important and you know, part of being a responsible adult is planning for that eventuality. I'm based down here in Austin, TX as, as a few of us are on on, on our MTR. And so quite often I do presentations or meetings in Dallas and Fort Worth, and I drive the 200 miles up I-35. And if you've ever driven that, you've definitely contemplated death before because it's four lanes, It's jacked up pickup trucks and semis. They're going 90 miles an hour. There's debris. There's like Bucky's trash. There's exploded tires. You know, a lot of times I'm exhausted. It's it's dark. I'm trying to make it home. And you have the uncomfortable thought, like, man, if I really ate it right here and this was the end, would my family be OK? And then part of that thought that comes into your mind is, is the Bitcoin aspect of that, like what, how confident am I actually that they would be able to receive my Bitcoin? And for a while that was pretty uncomfortable where I thought hopefully or probably or maybe so we're going to be talking about Bitcoin inheritance today. As Jackson said, I'll get into key management and then very happy to have Amanda here to talk about the legal title aspect. Because I think, and I know this is from experience actually, that if Bitcoin holders at all have thought about inheritance, it typically focuses on the key management portion, which is very critical. But far a far less percentage have have really taken care of the legal title, the ownership aspect. So key management, you know, really I'm going to cover the core tenants of key management when you're talking about how do I secure a material amount of Bitcoin for the long term? And then briefly, what is the the custody landscape look like today and what are we doing at on ramp to fill some of these gaps in the market that we're seeing? How are we how are we providing 1/3 option in custody vis a vis multi institution custody? So when we're thinking about key management, the core tenant is eliminating single points of failure. Bitcoin is an asset that we know is fixed and supply, there's only over 21 million. It's also a bearer asset. So if it's lost, it's gone forever. So if it can be lost forever, it it necessitates the custody solution, which can, you know, withstand mistakes. You have to have the ability for that custody solution to be, you don't have to be perfect in the way that that custody solution is managed throughout the years and decades and next 50 years and then passing it down. So this concept of eliminating single points of failure, making sure that if one thing bad thing occurs, that your Bitcoin is still safe, that is crucial. And then there are different ways that you can accomplish that goal. Now historically we've had two options for custody. We've had third party custody and self custody. Both present major drawbacks, particularly when it comes to inheritance, third party custody. So keeping your Bitcoin on an exchange or with a single institution, it's very easy, but it's not secure. Very easy to set up a Coinbase account or download the app, buy Bitcoin and keep it on there. But there's no shortage of hacks and things that can go wrong with keeping your Bitcoin on with a single third party. Conversely, self custody, very secure, but not easy. And we can run through do some of the requirements involved there. You know, for the most people I've talked to you, the typical starting place is we buy Bitcoin on an exchange and then you leave it there. But then pretty quickly you learn that OK, this is not the best long term solution for my Bitcoin is you. You go through, you know, a big point for your cycle and you see FTX and block Fi and Celsius and some of the most prominent names of the day implode virtually overnight and clients lose billions of dollars worth of Bitcoin. And this is unfortunately been occurring all the way back to 2013 when the first Bitcoin exchange, Mountain Gox imploded, was hacked and clients lost hundreds of thousands of Bitcoin. So then interestingly, you know, as the market does when it responded with a solution, So in 2014, the Ledger and the Trezor were created. So plastic consumer devices which you could buy at a low cost. You can set them up yourself and you can protect yourself from a single third party. You weren't beholden to one institution. You could pull your Bitcoin offline, which is an important concept it which is locally referred to as cold storage, where there's you're severing the Internet connection between your Bitcoin keys and in the Internet. So it's very secure. It's just not easy. You do have to spend quite amount of time to learn how to use these devices. And also it's, it's very clear that these devices weren't designed with inheritance in mind. So you know, the, the path that so many of us have taken in Bitcoin is, is something like this. So you, you buy a little bit on an exchange, you learn more about the, the, the, you know, really kind of the failures or the inherent threats of keeping it on an exchange or a single custodian. You pull it off and you start one using one of these hardware wallets. And you know, Bitcoin at the time is less than 1% of your net worth. And then the longer you hold Bitcoin, it tends to appreciate, you learn more about it and you invest more. All of a sudden your net worth is Bitcoin is 5% of your net worth. That's 25% of your net worth. You know, if you're crazy like some of us, it's over 50% of your net worth and now you've got a real problem on your hands in a good way, which is that you need to really make sure you're cussing this Bitcoin in the best way possible because it's such a large percentage of of your net worth. So then what a lot of folks do is start using multiple keys, which is called multi sig it. It's his native ability in Bitcoin to be able to secure Bitcoin using multiple keys. And that allows you to eliminate single points of failure. If one of the keys is lost or hacked or or misplaced, you're OK. So then what you do you, you starting to use multiple keys, you're distributing. If you're doing it right, you're distributing these keys in separate geographic locations. And then what you have to do is you have to sit down and write a list of instructions for your family to say, here's where the keys are located. And that gets really tricky. How do you divulge enough information but not too much? You want to make sure those asses pass at the time of your death, but maybe not before. Very difficult. So you know quite literally what you're doing is creating a treasure map. I, I have no plenty of people who literally dig holes in their ranches and that's where their seeds, seed phrases and their, their keys are stored. So it's kind of interesting we had this new digital asset, but we're kind of going backwards in a big way in terms of how we are securing it. So that the the best practice right now, from what I can tell is the treasure map accompanied with hey, honey, call my friend John. He's the Bitcoin guy. He hopefully he'll be around and and responsible and he'll help you to access the Bitcoin. So it can work. It's just, it's just clear that there are, you know, it is fraught with potentials, potential for things to go wrong, right? So you get to this point, your keys are distributed, you've left the treasure map. But then you think, well, what if the single point of failure in this setup is actually me, is me dying If the Bitcoin doesn't make it beyond me, You know, that is just, it's truly unacceptable. So this is one of the major gaps that we saw in the market as a team. It was a huge impetus for building on ramp and our multi institution custody solution, which as Jackson mentioned, this is the first of its kind. This has never existed before. It takes multi sig, this native protocol within Bitcoin, the ability to secure Bitcoin using multiple keys and it brings that to an institutional grade solution which is available for private clients, for family offices, corporates, pensions and institutions. It spans the gamut. This solution optimizes for the best of both worlds, so it's extremely secure, but it's also easy to use. You don't have to rely on a single third party to hold your Bitcoin, and you don't have to solve custody and leave a treasure map for your family. You eliminate single point of failure by leveraging 3 institutions which each hold one key. So how this works in practice is that we create segregated vaults for each of our clients and our clients retain unilateral control over their wallet. So they're the only ones who can instruct the institutions to sign with their keys and withdraw their funds. So it's very much in the spirit of not your keys, not your coins. But that really is trying to drive that is learning the lessons from the first exchange failure with Mountain Gox to say, don't trust one institution, know how your Bitcoin is secured and have as much transparency and mitigate as much risk as possible and retain control. So then as it relates to inheritance, what our clients uniquely are able to do are able to designate their beneficiaries right on our platform. And this is a really critical feature and especially as it relates to probate, which Amanda will explain So very, very plainly. If one of our clients were to pass, all their beneficiaries would need to do is simply contact on ramp to start the process to gain access to their Bitcoin. They provide a death certificate. Of course, there's a process of due diligence where both on Ramp and Bitco is the primary and secondary key signers are authenticating your beneficiary, reviewing the death certificate, all those things. But now it's eliminated is the need for your beneficiaries to be technical, to understand these devices, to know where they're located to to make sure that they're the Bitcoin isn't lost or stolen as they're trying to gain access to it in that in that critical time. So that covers the key management aspect of it. I'm always happy to talk with with any individuals one-on-one. You can schedule time with me, but now I'd like to hand it over to Amanda to discuss the legal title aspect of Bitcoin inheritance. At On Ramp, we believe that Bitcoin will be the most important asset to own in the 21st century. Our Multi Institution custody solution is the safest and most secure way to ensure that your Bitcoin remains in your and your family's possession for decades to come. Multi Institution custody maximizes security and minimizes counterparty risk, leveraging Bitcoin's native properties to eliminate single points of failure that have historically complicated Bitcoin ownership. On Ramp provides Peace of Mind for your Bitcoin journey. For more information, check us out at on rampbitcoin.com. Awesome. Thanks for turning it over. And you know, just something that I want to want to really hit on is that with that beneficiary designation on the on ramp account result that also will transfer legal titles to the beneficiary. So you're not relying on any sort of state planning documents or intestate laws. That beneficiary designation does transfer legal title and and if you are self custody in your Bitcoin. So if you're holding it by yourself, not in a trust, that legal title issue is still going to be there. You're not, there's nothing, there's no sort of wallet or any protocol level, any protocol that will solve for the legal title issue if you are self custody. So that is something to consider when you're when you're thinking about your inheritance for your Bitcoin. And I guess we'll just move into the legal title topic specifically. But before I start, I just want to say that this isn't legal advice. This is not investment advice. We're only providing this for informational purposes only. But in this section, I'm going to be talking about a couple of different topics, starting with taxes, because everybody always wants to know about taxes and how to pay as little as possible. Then we're going to talk about specific estate planning documents such as wills, trusts, powers of attorney, and then also gifting strategies for your Bitcoin and how all of those should be and could be incorporated into your estate plan. All right, next slide. All right, starting with taxes, all of my clients want to pay as little as possible and they often ask me, all right, how much am I going to be paying in federal estate and gift taxes? And the answer is it depends. Hopefully nothing. And they say, well, how can I be paying nothing? It's that there is this unified credit for federal and the state gift tax, which is the amount that you can die with or gift during your lifetime without having to pay any federal and state tax on that device or gift. When I first started practicing in 2013, that amount, the unified credit amount, was $5 million. In 2017, the Tax Cut and JOBS Act was signed into effect and that doubled that unified accredited amount to $10 million. That $10 million is indexed for inflation every year. So that number goes up theoretically every year as inflation keeps going up and they keep printing more money. So if you were to die in 2024, so this year you could give away $13.61 million without having to pay any federal estate or gift tax. So that, that that's, that's the golden number right now. It's important to note, though, that the Tax Cut and JOBS Act is scheduled to sunset on January 1st, 2026. So if Congress does nothing, then that number effectively gets cut in half again starting on January 1, 2026. So if you die before then, you're safe. If not, if Congress doesn't act, then that number gets cut in half. I'm not sure what's going to happen. Congress is unpredictable. They could always extend the the unified credit amount of $10 million and keep it going forward, or they could raise it or they could lower it. So that's something that you want to be keeping it kind of in the back of your mind. And you know, it's to the extent that you watch the news, seeing if it's any sort of legislation is coming through. And as we get closer to January 1, 2026, you want to be making sure that your estate plan is is up to date and that if there hasn't been any recent legislation, making sure that you're not at exposure for that decreased unified credit amount, OK? So as I said, you could give away $13.61 million to anybody without incurring any federal estate tax. You could also give away any amount to a spouse if you are both U.S. citizens or to a charity because the marital deductions and the charitable deductions are both unlimited. OK, so as I said, this is a unified credit. So this is a lifetime and after death credit amount. So if you had six $16.61 million and you gifted 10 million of it in Bitcoin to your daughter during your lifetime, that $10 million won't incur any sort of federal estate or gift tax. But that sort of gets deducted from the amount that you have left. So if you had 16.61 and you give 10 million during your lifetime, you have six point or $3.61 million left of exclusion after you die and then say you die with it in your taxable estate. Then you would have another 3.61 that you could give away to any of your beneficiaries at your death without incurring any federal state to get taxed. But that remaining three would be subject to tax and the tax rate is like income tax and that it goes from 18% to 40%. So on that first million dollars, the rate is between 18 and 37%. I think it's 18% for the 1st 10,000 and then keeps on going up and up and up until you hit $1,000,000 over that exemption amount and then the remaining anything above that is taxed at 40%. So again, during your lifetime you had 16.61 million giveaway, 10 no tax during your lifetime, three at death, no tax during your lifetime, or 3.61. The remaining three is subject to tax and the top amount of 40% for the top 2 million. It's also important to note that there is portability between spouses. So say I have $20 million and I die and I give everything to my husband. There's no tax at that time because of the unlimited marital deduction. But my husband is going to want to file a federal estate tax, gift returns, and make affordability election so that when my husband dies, he can use his total exemption amount, his 13.61 million, and he can also use my unused exemption amount. So that effectively will double that number for married couples if you're acting appropriately. That is just federal estate and gift tax. Unfortunately. States want a piece of the pie too. And depending on where you live, your state may have and inherit an inheritance or an estate tax. It's not uniform across every state. Some states don't have it. Where I practice and live in Pennsylvania there is an inheritance tax and that is taxed on all gifts at death to and the rate is dependent on the relationship. So again if I were to die and give money to my husband that's taxed at a 0% rate. Anything to lineal descendants or ancestors. So up the lines of parents, grandparents or down the line to kids. Grandkids is taxed at 4 1/2 percent, siblings it's 12% and anybody else other than the charity it's 15%. So that's something that you want to keep in mind as well. OK, next slide. All right, so we've talked about taxes. Now let's talk about our actual estate planning documents. And the first one that I'm going to talk about is your will and probate. So people know what a will is. They know that they need one, but they don't necessarily understand the difference between what happens if you die with a will or without a will. If you die with a will, your what your will is going to do is leave instructions for how your assets should be distributed. But it's not all of your assets. It's only what's called your probate assets. So as I already stated, if you have a vault with on ramp, that vault will have a beneficiary designation. If you choose to sign up for that, that becomes a non probate asset because you have that beneficiary which is a legal designation. OK. And that means that your will will not govern that. So even if you say I want my all of my assets to go to my spouse, if on that beneficiary designation on your on ramp account you put down your brother, all of your Bitcoin in that account is going to your brother regardless of what your will says, OK. And then so wills also only govern assets that you hold in your individual name. So anything that's jointly titled or any other accounts that has a beneficiary designation, such as life insurance, retirement accounts, investment accounts, anything that's held in a trust is not a probate asset. And your will does not govern that, OK. Also, if you don't have a will, the same rule applies for intestacy. So intestacy means you just died without a will. So intestate succession means you died, you didn't have a will, and basically the government gets to decide on how your probate assets should be distributed. So again, this only applies to individually titled assets, not a probate assets. But if you don't have a will, the rules of intestacy are determined by the jurisdiction where you live. So it's different from state to state. And you're not really going to want to look it up and make sure that it works for you. Because in Pennsylvania, again where I live, intensity would not work at all for me because I have small children. If I were to die without a will, my husband would get the 1st $30,000 of my probate estate and then the remainder would get split equally between my husband and my kids. That doesn't work for me because I want my husband to have everything and I trust him to take care of my kids. If my kids are getting some money while they're still minors, we're going to have to have a port for action in order to appoint guardians to manage those funds or that Bitcoin for them, which is a nightmare, especially if you have Bitcoin because that guardian is immediately going to want to sell it. So that that's a consideration next slide. Another thing that your will can do is they can make specific because they class or they can just dispose of the residue. Specific requests are like that specific gift. So under my will, I give five Bitcoin to my brother and then the residue means I give everything else to either a person, a group of people or a trust. So a specific request. If I had five Bitcoin going to my brother, that would come off the top. And then whatever is left is goes to whatever my will directs. As far as the residue, it can also create trust under your will. So you could say I give five Bitcoin in trust to my kids and it'll leave instructions for how that trust could be administered. Or I could say I give everything in my estate to my trustees to hold in trust for my kids or my cousin or my dog or whatever you want. And then also your will will appoint your fiduciary. So that's your executor, which is the person who has the always fun job of administering your estate, paying final taxes, distributing assets, trustees of any trust under your will that would administer the trust and then guardians for any minor children that you may have. And a guardian is important because that in in certain jurisdictions would keep the courts out of deciding who gets to take care of your kids. The next slide is talking about trust. All right, so we just did Will and now we're going to talk about trust and how they're a little bit different. You may need a trust or you may not need a trust. Trust depends on where you live, where you live, and what your goals are. And when we talk about trust, I usually think of that in two different categories. They're revocable trust and irrevocable trust. Revocable means that you can change it, you can revoke it, you can put assets in, take assets out of it, and irrevocable trust, which means exactly that you should think of them as being unchangeable assets that you place into the trust. You should not expect to get back out. You can't change the terms of them, and there are benefits and drawbacks to both. So revocable trust do not provide any sort of tax benefits and they don't provide any creditor protection. So assets in a revocable trust are still included in your taxable estate for federal estate and gift tax purposes. Income produced by assets in those trusts are still taxed to you on an individual level for income tax purposes. There's no creditor protection. And you might be asking, OK, well, why would I do it then if there's no benefit for taxes or creditors? And the reason is, is that they do offer a higher level of privacy and also they can be used to avoid probate. So we've talked about probate and non probate property, but probate itself is the process of lodging one's will at the register of wills or the probate court of the jurisdiction where you live and having an executor appointed and sworn into office and then giving branching the court oversight over the administration of your estate. And depending on where you live, probate can be easy peasy or it can be a real pain in the butt. And it's, it really just depends on where you live. And in jurisdictions like Florida and New York, it can be very burdensome and very expensive. In other jurisdictions like Pennsylvania and New Jersey, where I primarily practice, it's not that big of a deal. It's easy, it's not too expensive. So a lot of clients choose to just have a will as opposed to revocable trust. But another an important consideration is that probate is a public process. So your will will become public record and not to the extent that someone can look it up online, but they could go down to the courthouse and get a copy of your will. And they can also get copies of your inventory and the inventory of the assets in your estate and the names and addresses of your beneficiaries, which a lot of my Bitcoin clients don't want to happen. They want their lives and their estates to be as private as possible. And so in those situations, I do try and steer them more towards irrevocable trust, even though it, it does add an additional document, an additional layer of actually getting the assets into the trust, which it's not too much of A, of a, of a lift, but it's just an additional thing. Irrevocable trusts are, like I said, irrevocable and they remove assets from your taxable estate for federal estate and gift tax purposes. Some types of irrevocable trust are life insurance trust, charitable trust, special needs trust. So if you have a beneficiary who receives government benefits or has special needs, either because of a medical disability or addiction issues, special needs trust are used to allow you to place assets into them to supplement or supplement supplements their lives, but not interfere with any government benefits that they may receive. So that's a good option. Grantor trust are used to you would pay any income taxes on the trust, but they're still excluded from your estate for federal estate tax purposes. And then qualified personal residence trusts are other or just a a variety of trusts or some of the ones that we use frequently. Next, actually go back, go back. Sorry. One thing that I did want to point out is that if you are utilizing trust, revocable trust, not so much. If you are self custodying, you would still be the trustee and the person that's managing the assets. So you could still self custody your Bitcoin in a revocable trust. If you are using irrevocable trust and you're transferring Bitcoin to that trust, basically you are are giving control of the asset over to the trustee. So the trustee is the one who's going to be managing your asset. And as far as where I think things are going, I don't know many trustees who would take the liability of self custodying. So they would be looking for some sort of custodial solution just to limit their own liability in those sorts of situations. So that's, that's something to consider. OK. Next slide again, sorry. The next thing that I want to talk about is powers of attorney. I don't hear many Bitcoiners talking about this at all, whereas with your wills that people talk about a lot. Allow your executor to manage your estate after you die until you're until you die. Even if you nominate someone as executor or administrator of your estate, they have no power or authority to manage your assets during your lifetime. Your will only becomes effective upon your death once it is probated and once they are sworn in. Same thing with a trust. If you have a revocable trust upon your death, a success or trustee would have the ability to act. But during your lifetime, if they're not acting as trustees, they have no access to your assets. The reason why powers of attorney are really important is God forbid, like Cam said, you're driving down the road and you get hit by a tractor trailer and you're still alive, but you're in a coma or you for some reason you can't manage your own affairs. A power of attorney would allow your designated agent to manage your affairs, to access your Bitcoin, to access your accounts and and make transactions, whatever you need going on. Healthcare powers of attorney, I'm not going to spend that much time on because it's related to healthcare as far as living wills and things like that. But general durable powers of attorney are something that I think are almost as important as a will because you never know what's going to happen and you need to make sure that there's somebody who has authority to act on your behalf. If you are unable to do so, if you don't have a general durable power of attorney and something does happen and you can't manage your affairs. And what's going to happen is your loved ones are going to have to go to court and they're going to have to start a procedure to get you declared incapacitated. And you're going to have to have a surrogate or a guardian appointed of your estate. And again, that is an expensive process because it's the courts are involved. It's always expensive and it's time consuming. A lot of times if, if something's happening, you're going to need someone to access your assets quickly. So that's that's something that you want to consider as well. All right, next slide. Now we're talking about this is just a consideration as far as when you're thinking about your trust and what's considered taxable in your state for federal state taxes and non taxable. Do you have control of the over the asset? If you do, it's taxable. Can you change the beneficiary? Are you receiving a benefit from the asset? Those would all lead you to believe that if it's in a trust, it's still taxable in your estate. Did you transfer it and retain a string? So did you give it as a gift? But I like say I want the ability to get it back. It's still that. Could it cause inclusion into your estate for federal estate and gift tax purposes? Right, next slide. OK, we talked a little bit about what happened to to your assets when you die. And you might say, OK, well I don't want to pay gift tax. I have all of this Bitcoin. I don't need it right now. Like what? What are the benefits of utilizing gifting during my lifetime? As I said before, there's a unified credit amount of 10 million indexed for inflation, that's 13.61. So that amount gets told whether or not you gift during your lifetime or after your death. But an important thing to consider is if you leave your Bitcoin to your beneficiaries upon your death, if you devise it through your will or your trust, they would get a step up in basis for that Bitcoin based on the date of death value. If you were going to gift it during your lifetime, there's a transferred basis. So what I'm what I'm saying is that say I have 10 bit or I have one Bitcoin that I bought at $20,000 and I give it to my daughter right now. I don't know what the value of Bitcoin is right now. Somebody at Cam you wanna help me out with the? It's 70,000 around there. Let's see. Yeah, let's see 70,000. How much? 70. Thousand. OK, So I bought it at 20 and I want to give it to my daughter today and the value is 70. So when I give it to her, my basis of $20,000 transfers to her. And if she was going to sell it today at 70,000, then she's got that $50,000 of of gain that she's going to have to be pay taxes on. OK. If I were, if I bought it at $20,000 and then I died today and my daughter gets it under my will, then her basis is my date of death value. So the $70,000 is her basis in that big point. So that's something that you want to consider. Another thing is that you know that 10 million or $13.61 million that you can give away at any time during your life. There's also another caveat in that you can give away a certain amount every year without dipping into that exclusion amount. So again, this number changes pretty much every year, but this year the it's $18,000 per recipient that you could give anyone without it dipping into your lifetime or credit. So if my husband and I have a daughter and she's married, I could give her $18,000 this year, I could give her husband $18,000 this year, my husband could give her $18,000 this year, and he could give her husband $18,000 as well. And that's a good way to move well to a beneficiary without causing any sort of tax repercussions and save the Bitcoin. So you could give it in cash or you could give it in Bitcoin. It doesn't matter. There is an unlimited gift for spouses as long as you are both U.S. citizens. If you're not U.S. citizens, there is a limit to the amount that you could give to spouses during your lifetime transfers. The educational institutions and medical providers don't pull that lifetime gift credit. So if you have a child who goes to college, you can pay their college tuition. That's not a gift that you have to report. Same thing for if they have medical bills. If you want to pay their doctor directly, then that's not something that would be considered a gift as well as gift gifts or charity. Next slide, additional Bitcoin considerations for estate planning. So the law that governs access to digital assets, including Bitcoin, is the Revised Uniform Fiduciary Access to Digital Assets. Hopefully I've convinced you all that you guys need some estate planning documents in place at this point. And it's important to note that your documents should grant your fiduciary power to access, retain, and manage your digital assets to avoid liability under privacy laws. So you know your will, your power of attorney, your trust should grant your trustee, your executor, your agents under power of attorney, the ability to access and manage your Bitcoin just so to to protect them from liability. If you're working with an estate planning attorney that isn't necessarily well versed in Bitcoin, I would recommend that you ask them to ensure that your documents have digital asset provisions and just to make sure that their coverage because most estate planning attorneys would include them. But it's something to double check. And then as always, security is is still a consideration for estate planning documents. I cannot harp on this enough. Do not put private information in your estate planning documents. Don't put your treasure map in there. Don't put your passcodes, don't put your keys, don't put your pins in any of your estate planning documents. Whether or not it's a will, a trust, a power of attorney, just because the will is the only one that likely becomes probate, a public record at the time of probate. Any of these documents could become public documents at any time, especially if there's litigation. Anytime I'm involved in any sort of litigation or dispute regarding a trust or power of attorney, that document is always filed with the filing. So it that's an important consideration. Do not put any private information in any of these documents. Also make sure when you're considering who to appoint as agent, executor or trustee, make sure that that fiduciary is someone that you really do trust. They do have duties of obligation to act in your best interest, but things happen and people take advantage of other people. So I can't harp on it enough to make sure that you really think about who you're appointing to manage your assets either during your lifetime or after your death. And then if you are self custody in your Bitcoin. Again, I spent all this time going through legal documents to resolve the legal title issue, but the key management issue is still there. So make sure that you are reviewing and updating your plan frequently if you are changing how you're testing your document, your Bitcoin, if you are getting new wallets, making sure that everything is clear and concise and that your beneficiaries or whoever has legal title to your Bitcoin knows how to access them. And they're not going to make any mistakes because, you know, when they are in mourning after you pass, that's not the time for them to be frazzled because what you left was a convoluted treasure map that was like shoved in your junk that they have to like call their friend and say, all right, is there something about a pin? It says I have to go to the safety deposit box. And but he closed that. He got rid of that two years ago. I don't know where it is. So just make sure that you're very diligent as far as your plan for access after you die or even during your lifetime if something could happen and you need somebody that's the manager of state like under pot returning. So I guess the key takeaways are that the state inheritance planning, it will protect your loved ones and ensure your attentions are carried out and your Bitcoin is not lost. But one size does not fit all when it comes to key management, and it doesn't fit all for estate planning as well. You need to review your Bitcoin holdings in conjunction with other assets to determine a proper plan. Estate and inheritance planning does not mean sharing your keys or executing a will, but it could also mean utilizing trust, powers of attorney, advance health care directives, and it should involve some financial planning. And then you also want to consider tax planning and consequences when you are planning your gifts and your your estate after you die. Excellent. Well, Amanda and Cam, thank you both. Very, very informative presentation, if I may say so myself. We got some questions coming in from the audience now. And just a reminder to everyone with the remaining 15 minutes or so, you can submit your questions at the bottom on the Q&A function of the Zoom and we'll just get through as many of them as possible. So Cam, I think I have one or two for you. First, I'll give Amanda a break. So could you speak to the process Cam of setting up an inheritance plan, just maybe high level steps of of what's involved for an on ramp client if, if or perspective client if they want to set that up? Sure. So a large percentage of our clients on board and create an account with on ramp in the name of their trust. So it's very common because of the benefits that Amanda just described. So that is the entity, the trust is the entity that owns that the Bitcoin in that account. And then that makes inheritance very smooth from that that point of view. What our clients do in either case, whether they're onboarding as an individual or as an LLC or a trust or another entity, they're onboarding and going through the know your customer process, the KYC process with both us here at on ramp and then separately with bit go. So you have two separate institutions that are in taking documentation, running background checks, those sorts of things. And then that documentation is encrypted into a digital folder and then shared with a third key partner, which is coin cover. So they are more than the passive third key role where they're only going to be assisting if in the unlikely event that something happened to on ramp or bit go. But then if that event were to happen where let's say on ramp or Bit Go ceases to be a going concern. Coincover has all the information they need about you as a client to be able to help you and to be able to recover your Bitcoin, to be able to sign with Coincover's key and to sign with let's say Bit Go's key or Onramp's key. So the process that a client on boards directly with both Onramp and bit Go. And then in terms of the inheritance aspect, again, clients can either onboard a trust or if they choose to onboard as an individual, right within the platform, our clients can designate their beneficiaries. So their name, their e-mail address, their relationship to the client. They can designate a primary beneficiary and then also contingent beneficiaries and designate the amount of Bitcoin that should be distributed to those beneficiaries. And then so importantly, that avoids the probate process, which Amanda describes. So there's then there's no possibility or no risk of the the names and addresses and the amount and the the fact that Bitcoin is going is being distributed to as beneficiaries because you've listed them. You designate your beneficiaries on the on ramp platform. Thanks, Kim. Appreciate that. Maybe just one other thing to piggyback on there that we got as well is this is the beneficiary designation that you just described. Is this like separate? Do do people have to pay an additional charge for this or is this part of the custody offering? It is complementary with every custody offering, so every honor and client at no extra cost is able to designate their beneficiaries on the platform. OK. Thank you. All right. So Amanda, maybe one for you then. I think you might have touched on it throughout the presentation, but it might be worth reiterating. So question came in, could you pass your children Bitcoin inheritance to them now and pay capital gains on it at 60 K rather than the possibility of you know a million or 2 million in the future? Yeah. So if you're gifting your Bitcoin now there's that's not a taxable event, you're not paying capital gains at the time of this transaction if it's a gift. So you're transferring your basis of whatever that is to them. So if they ultimately decide to sell it at any point in the future, then they will be on the hook for either a capital gain or or they could recoup a capital loss depending on what your basis is. But you know, if you are at risk of exposure to federal estate tax, you would want to gift it before it would grow too much because so let's say you have, you know, $20 million worth of Bitcoin and you gift, you know, 13 million now and then. So they would they would get 13 million that would use your exclusion. But then Bitcoin the value increases significantly. If it double S all of that growth you don't have to pay federal estate or gift tax on. So that would be the benefit to doing it during your lifetime. Awesome. Thanks, Amanda. All right, we're getting a lot, so just we'll keep it rolling. Here's another one for you, Amanda. So recognizing that Bitcoin has historically demonstrated the capability of dynamic upward price movement, what considerations might a family that has 10 million in estate today consider an estate planning in advance of a multiplying price movement? In other words, would there be smart planning now that can benefit an estate later example, revocable today, moving to irrevocable trust in the future? That's probably, you know, there's probably a lot of ways you could answer that, but just in the interest of time, like any high level thoughts there or anything actionable? You know, your safety is always, it's, it's a, it's kind of a moving Organism. It's always developing as your assets chain and something that you know, you might want to might be beneficial now you might have to revisit later as the price increases. Like I said, there are benefits to transferring items or transferring Bitcoin to an irrevocable trust. Now if you think that the price is going to increase significantly because that will remove that asset at today's value from your estate and any growth in the trust will not be subject to federal estate or gift tax. So that I guess would be how I would answer that. Excellent. Thanks. Amanda, another one for you. Sorry you're you're a hot commodity here with these questions. So are there particular states recommended to form trusts? I'm familiar with some attorneys recommending South Dakota for estate planning. Also, does your planning service deal with international structures if people want to relocate abroad? So maybe we can take the first piece. Yeah. So our benefits to creating in different states, it really depends on your goals and what you're looking for. So yeah, you can create trust in different states. I'm, I'm not going to really provide advice about which ones are the best ones because it, it, it depends on the client. And then as far as international structures go, you know, if, if you are relocating abroad, you're still subject to, if you're AUS citizen, you're still subject to US estate tax. So you're going to need documents here. You, if you are having assets abroad, if you buy like a house or something abroad, then you might need to consult with an estate planning attorney wherever you are living as well. So it's, yeah, we do help. We have a lot of clients that live abroad but sometimes we have to work in conjunction with a local council. Excellent. All right, Cam, could you just speak to what's included like what, what type of services are offered with on ramp multi institution, multi institution custody? I know you spoke to the core custody offering, but maybe beyond that, just like speaking to what functionality exists within the client dashboard, what they can expect with our level of client service, etcetera. Certainly so the, the, you know, part of the goal of on ramp is always to provide a very high touch service so we can have individual relationships with each of our clients in the same way, some of the way that Amanda does with hers and get to know them and really take care of them and their families for whatever they need in Bitcoin. So certainly I'll kind of talk a little bit about the core set of services we offer, but what I do for my clients, I know what Jackson does too is really, really work to be a a long term partner in Bitcoin for whatever they need. So they they, and that could be well beyond the scope of what we offer, whether it's, you know, we've got large networks in Bitcoin making introductions to, you know, Bitcoin miners or other if they're interested in making, you know, venture capital investment, helping our clients with whatever they need and providing that white glove service. So then more specifically within what, what do clients benefit from within on ramp? One is just really easy ability to be able to view and manage your Bitcoin and to withdraw again with the with the key manager part extrapolated and without the reliance on a single third party. And then we you we've built a proprietary application where you can log in, view balances, deposit and withdraw whenever you'd like, just like with any other some of how you would with any other Bitcoin wallet. You can buy Bitcoin and that'll be deposited for you into your on ramp vault. You can sell Bitcoin. The inheritance services are of course included. We do have a Bitcoin IRA service as well. So if you have Bitcoin in a traditional or a Roth IRA or a previous four O 1K, we can help you to roll over those assets. And if you hold and hold Bitcoin in a multi institution vault and you know, many other services coming down the pipe. The last one I'll mention too is we recently launched the first ever insurance product for individual Bitcoin holders, which is really powerful and we're happy to talk with anybody one-on-one at length more about this product. But it's through our partnership with Coin Cover and we're able to ensure client transactions up to $5,000,000, which insurance and Bitcoin previously has been kind of a hand WAVY feature because it's been insurance applied to an omnibus balance at an exchange or custodian where a small percentage of the total assets at that firm are insured. And then, you know, the firm fails and the insurance doesn't pay out for one reason or another. So we very intentionally created this insurance product in a way where each client who opts into this, you know, they already have segregated vaults. Those vaults can be very easily underwritten. And the insurer is very comfortable with this arrangement because the of the custody solution at its core that there is no single point of failure and that there are three institutions secured in that Bitcoin. Awesome. Thank you, Cam. All right, so we have, call it four or five more minutes left. Try to get a few more of these in. And then if anyone does have questions that we don't get to, you can just reach out to Cam or or myself directly Cam at on rampbitcoin.com or Jackson at on rampbitcoin.com. So Amanda, one, one question for you. What documentation is required to gift during the year? It really depends on the gift. If you are giving under that annual exclusion amount, the less than $18,000, you don't really need to to provide any sort of documentation. If you're making a big gift to a trust that you want to like get like A10 Bitcoin to a trust, then you would need to do either an assignment or a deed, a gift to get that into the trust. And then you would also want to file a seven O 9, which is the federal, state federal gift tax return. There's not going to be any tax due at that time if you haven't used all of your exclusion, but you still need to file the the return. Thank you. All right, Cam, back to you. Will on ramp allow Will on ramp allow an owner of a personal account to change it to a trust ownership of the Bitcoin? We certainly will the, and we've had clients do this. We can't simply change it. The client would need to go through an additional onboarding process from start to finish with their trust. But we certainly, certainly can do that. So yes, you don't have, I think the, the spirit of that question, which I really appreciate is, you know, don't let the perfect be the enemy of the good, you know, start somewhere, upgrade your security. You can start with a personal account. And then over time, as you're working with Amanda, are you working with an estate planner to create a revocable trust or will your powers of attorney? Then later on you could come back to us and say, hey, you know, I'd like to sunset this personal account and I'd like to instead create an account in my trust. Or you can have you can have two accounts, you can have an individual account, and you can have an account under your trust. Excellent. So will the recording be shared? Yes, we will be sharing the recording. It'll be available on a few different mediums and we'll follow up with e-mail as well. OK, So Amanda, another one for you with remaining time here. So, are there any best practices for Bitcoin estate planning between US and non-us citizen spouses and family members? Things to watch out for, things to definitely avoid, or things you should definitely consider. Yes. So something that you need to consider is if you have a non citizen spouse, you want might want to consider the use of AQ dot, which is a qualified domestic ownership trust so that you can access their Bitcoin to them without incurring federal state tax. If you really want to be careful that you're not making gifts to a non citizen spouse because that is taxable for every gift over $185,000 a year. So that's something that you you really want to consider, especially, you know, if if you have like a citizen spouse and you are self custody in your Bitcoin, it's a lot easier to make the argument that that Bitcoin is joint property than it is if you have a non citizen spouse, because any sort of yes to them is subject to tax over a certain amount. So that I if you have a non citizen spouse, definitely contacting the state planning attorney and and figure out the best way to to manage your assets. Excellent. Well, I know we're about to be at the top of the hour here and want to be mindful of both Amanda and Cam's time and then also all the attendees as well. So thanks again for joining today. Hope it was informative to you all. And there's some clear next steps that you could take to really solidify and secure the Bitcoin wealth that that you've created for your family. And just to reiterate as well, if if you want to get in touch and learn more about what we're doing at On Ramp, please feel free to just reach out to Cam or myself directly or you could go to our website, which again is on rampbitcoin.com. And from there on the home page, you can schedule a consultation, speak with either one of us or other members of the team. So with that, I I guess we'll conclude the webinar. Just special thanks again to Amanda Kita for just bringing a ton of knowledge and expertise. Extremely valuable, Amanda. And, and you know, just thanks again for your time. All right. Thank you both. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit on rampbitcoin.com/contact. Schedule a consultation with one of our private client advisors.
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