Estate Tax Planning and your Digital Assets: Protecting your Online Life
- Mackenzie Sorich
- Apr 23
- 2 min read
The rise of digital assets have brought a new layer of complexity to financial and estate planning. As tax season approaches, it's crucial to consider how these assets impact your overall tax strategy and estate plan. View Ridge Family Law & Estate Planning can guide you through these intricate issues, ensuring your online life is protected and your tax obligations are met.
The Growing Prevalence and Complexity of Digital Assets
Given that cryptocurrency is becoming increasingly common, it's crucial to understand its implications for estate planning. Approximately 28% of American adults hold cryptocurrencies in 2025, highlighting the importance of estate tax planning and digital assets when creating or updating your estate plan. Digital assets are digital representations of value that are recorded on a cryptographically secured distributed ledger (or any similar technology) that is not cash. Examples of digital assets include:
Cryptocurrencies
Non-fungible tokens (NFTs)
The increasing use of digital assets has prompted Congress and the IRS to create new rules for reporting information on digital asset transactions. Failing to report digital asset transactions can result in penalties.
Action Items for Digital Assets and Estate Planning
Make sure you have a plan for your digital assets, such as cryptocurrency, in your estate plan.
Report all income from digital asset transactions. Use forms like Form 1040, 1041, 1065, or 1120, as applicable.
Keep detailed records of all transactions. This includes dates, amounts, and the purpose of each transaction.
Coordinate with tax and legal advisors. Navigating the complexities of digital asset taxation requires knowledge.
Consider your beneficiaries. Update beneficiary designations to align with your wishes.
Update your will or trust. Make any necessary changes in light of your new assets.
How We Can Help
At View Ridge Family Law & Estate Planning, we ensure your online assets are protected and properly integrated into your estate plan. We help you navigate tax implications, secure access for your loved ones, and create a strategy that aligns with your financial goals.
Whether you need assistance with:
Updating your will or trust
Figuring out what to do with your digital assets as part of your estate plan
Understanding tax implications
Ensuring your loved ones are protected
Contact us at 206-703-0764 or reach out online to schedule a consultation. We’re here to help you protect your online life and plan for the future.
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