WEBVTT - What’s The Afterlife of a Bitcoin? 0:00:04.400 --> 0:00:07.760 I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News, 0:00:08.039 --> 0:00:11.240 and this is Bloomberg Crypto at Daily Bloomberg I Heart Podcast. 0:00:11.840 --> 0:00:22.520 It's Wednesday June. What happens to your crypto after you die? 0:00:23.079 --> 0:00:26.600 Beyond the existential question of the permanence of the blockchain, 0:00:27.040 --> 0:00:31.159 the answers here aren't straightforward for estate planners. What to 0:00:31.200 --> 0:00:34.120 do with digital assets like bitcoin and non fungible tokens 0:00:34.440 --> 0:00:38.600 present a new challenge to inheritance law. There's more and 0:00:38.720 --> 0:00:41.880 more money pouring into these assets, and people are starting 0:00:41.920 --> 0:00:44.879 to think about their digital legacies. But how do you 0:00:44.920 --> 0:00:48.040 pass on something that's built on the principles of anonymity 0:00:48.120 --> 0:00:52.240 and individuality and that requires both passwords and tech savvy 0:00:52.280 --> 0:00:55.720 to access. Today, I'm joined by Bloomberg Report to Jill 0:00:55.800 --> 0:00:58.640 Shaw to explore these questions about estate planning when it 0:00:58.680 --> 0:01:04.760 comes to crypto. Jill, thanks so much for joining us. 0:01:05.000 --> 0:01:08.440 Thanks for having me so Jill. Before we kind of 0:01:08.520 --> 0:01:11.839 dive into the question of like, how to rich people 0:01:11.840 --> 0:01:14.640 apostle on their crypto, what made you interested in the 0:01:14.640 --> 0:01:17.240 story in the first place, Well, I've been thinking a 0:01:17.280 --> 0:01:19.920 little bit about wealth. I was on the wealth team 0:01:19.959 --> 0:01:22.319 at the time. And you know, a lot of people 0:01:22.360 --> 0:01:25.240 are making a lot of money in crypto, and I've 0:01:25.280 --> 0:01:30.800 been reporting a bit about people using their crypto through 0:01:31.520 --> 0:01:34.800 regular payment methods, having credit cards that are like essentially 0:01:34.840 --> 0:01:37.720 linked to their crypto, and I started to think about, well, 0:01:37.760 --> 0:01:40.920 where's all this money that people are making in crypto going. 0:01:41.680 --> 0:01:44.360 And you know, there's an entire world of wealth planning 0:01:44.760 --> 0:01:47.920 that's out there that is basically still catching up to crypto, 0:01:48.000 --> 0:01:49.920 and I wondered how that was going. And when we 0:01:49.960 --> 0:01:53.080 say wealth planning, as a person who does not myself 0:01:53.280 --> 0:01:57.200 have a wealth ploto, what do these folks do? You 0:01:57.280 --> 0:02:01.800 have entire teams of lawyers and other experts who help 0:02:01.840 --> 0:02:04.880 you structure your wealth, who help you figure out how 0:02:04.880 --> 0:02:07.880 to pay as little hole taxes on your wealth, who 0:02:08.000 --> 0:02:11.639 help you, you know, um, pass along your wealth through trust. 0:02:11.680 --> 0:02:15.639 So there are entire vehicles and industries around people being 0:02:15.680 --> 0:02:20.239 able to maintain their wealth, to reduce their tax liabilities, 0:02:20.320 --> 0:02:21.720 and then to be able to pass it on to 0:02:21.840 --> 0:02:25.240 their airs. And given that these folks have been around 0:02:25.240 --> 0:02:27.679 for a long time, they're experts in many different asset classes, 0:02:27.720 --> 0:02:30.160 but crypto as an asset class has existed for less 0:02:30.160 --> 0:02:33.560 than two decades. In your reporting, you know, you shared 0:02:33.600 --> 0:02:37.800 an anecdote of a gentleman who was like, Okay, I 0:02:37.840 --> 0:02:40.079 want to do this, and then you interviewed some state 0:02:40.120 --> 0:02:42.959 planners and they were like cool, So tell us a 0:02:43.000 --> 0:02:45.560 little bit more about that. It's kind of befuddling for 0:02:45.760 --> 0:02:48.240 people in the wealth in a state planning world. I mean, 0:02:48.320 --> 0:02:50.200 if I were to describe the estate planning world, I 0:02:50.200 --> 0:02:53.040 would say it's kind of a sleepy place. It's like 0:02:53.080 --> 0:02:56.280 a kind of stable place. And um, people don't like 0:02:56.320 --> 0:02:58.720 surprises when it comes to their money, and these people 0:02:58.760 --> 0:03:01.720 are experts in their not being very many surprises when 0:03:01.720 --> 0:03:04.880 it comes to your money. And so crypto is kind 0:03:04.880 --> 0:03:09.200 of the opposite of full full of surprises, full of volatility. 0:03:09.320 --> 0:03:11.480 And what I found was that this world is still 0:03:11.480 --> 0:03:14.200 trying to catch up to think about what this what 0:03:14.280 --> 0:03:17.639 this asset class means. Is it property in the legal sense? 0:03:17.840 --> 0:03:20.960 Is it an asset class? Is it closer to gold 0:03:21.120 --> 0:03:23.919 when they're trying to think about comparisons to other asset 0:03:23.919 --> 0:03:26.880 classes that they've helped manage before. So there's a lot 0:03:26.919 --> 0:03:30.360 of open questions. So, you know, wealth planning has clearly 0:03:30.360 --> 0:03:32.200 been around for as long as there have been rich 0:03:32.240 --> 0:03:35.160 people who need their money managed. Crypto as an asset 0:03:35.200 --> 0:03:37.960 class hasn'tly been around for, you know, less than two decades. 0:03:38.520 --> 0:03:42.280 How are those folks in that industry adapting to these 0:03:42.320 --> 0:03:45.280 folks in this industry? I have to say that as 0:03:45.280 --> 0:03:48.280 an asset class, it's like a befuddling asset class for 0:03:48.360 --> 0:03:51.840 these people. Estate planning and wealth planning is a very 0:03:51.880 --> 0:03:55.960 stable place. It's an almost sleepy industry there. People don't 0:03:55.960 --> 0:03:58.920 like surprises when it comes to their money, and estate 0:03:58.960 --> 0:04:01.400 planners and wealth planners are experts and they're not being 0:04:01.400 --> 0:04:05.320 surprises when it comes to your money. So crypto as 0:04:05.360 --> 0:04:10.120 an asset and a world is very different from that, 0:04:10.840 --> 0:04:15.400 and there's tons of volatility, and so all these people 0:04:15.440 --> 0:04:17.560 are still trying to figure out how do we manage this, 0:04:17.680 --> 0:04:19.800 how do we make sure there aren't surprises when it 0:04:19.800 --> 0:04:23.800 comes to your crypto wealth. So, in practical terms, in 0:04:23.839 --> 0:04:26.120 the story that you wrote, you found somebody who was 0:04:26.160 --> 0:04:30.120 actually trying to make sure that his airs, his kids, 0:04:30.200 --> 0:04:33.440 his grandkids would have access to his bitcoin and his 0:04:33.560 --> 0:04:35.919 n f T s. What was that like for this 0:04:35.960 --> 0:04:37.480 person who was trying to figure out how to do that? 0:04:38.400 --> 0:04:42.280 So this person is a lawyer and so probably has 0:04:42.320 --> 0:04:45.120 more knowledge than most people about how to pass along 0:04:45.160 --> 0:04:50.000 your wealth, but holds a bunch of crypto tokens and 0:04:50.640 --> 0:04:55.520 assets that need to be described in excruciating detail. Um 0:04:55.760 --> 0:04:58.280 and so one of the things that I learned over 0:04:58.279 --> 0:05:00.280 the course of the reporting is that he has a 0:05:00.360 --> 0:05:05.920 twenty five page document that lays out exactly what websites 0:05:05.960 --> 0:05:09.000 to go to, which wallets to connect, you know, how 0:05:09.040 --> 0:05:11.479 to get access to all of this. And you know, 0:05:11.480 --> 0:05:13.600 one of the things he said, like, I've tried to 0:05:13.680 --> 0:05:16.400 lay this out as best as I can, but they 0:05:16.480 --> 0:05:20.120 might need an expert to even be able to access 0:05:20.160 --> 0:05:21.680 all of it and to be able to move it 0:05:21.720 --> 0:05:25.280 around if I were to pass away. So this is 0:05:25.360 --> 0:05:29.520 kind of somebody who's comfortable taking it on themselves. He's 0:05:29.839 --> 0:05:32.680 laying out this stuff in documents. He's teaching his children 0:05:32.920 --> 0:05:36.279 how to use wallets. But in this case he probably 0:05:36.320 --> 0:05:39.080 has a smaller amount of assets. When you have a 0:05:39.200 --> 0:05:41.640 large large amount of assets, you do need experts to 0:05:41.680 --> 0:05:44.960 help you kind of figure out how to structure them. 0:05:44.960 --> 0:05:55.320 Thank you, Jill, We'll be right back. One of the 0:05:55.400 --> 0:05:58.880 other things that I find fascinating, right, like wealth planning 0:05:59.000 --> 0:06:02.240 depends on the longevity of the institutions that are involved. 0:06:02.640 --> 0:06:06.520 There's this idea that you die, but in twenty five years, 0:06:06.600 --> 0:06:08.600 the bank that your money in is still going to 0:06:08.680 --> 0:06:11.800 be operating, or the safety deposit box is still going 0:06:11.800 --> 0:06:14.960 to be accessible. Crypto has um slightly more of an 0:06:14.960 --> 0:06:19.520 ephemeral vibe to it. Sometimes it's not a place that 0:06:19.600 --> 0:06:24.800 has a particularly strong tracker code of like consistency. Things disappear, 0:06:25.080 --> 0:06:29.400 projects go to zero, Entire companies cease to exist in 0:06:29.480 --> 0:06:32.440 what feels like a very short span of time compared 0:06:32.480 --> 0:06:35.120 to you know, say a Swiss bank that's been around 0:06:35.120 --> 0:06:38.839 for hundreds of years. Is that something that wealth managers 0:06:38.839 --> 0:06:40.640 are also trying to wrap their heads around there, like 0:06:40.680 --> 0:06:43.520 this website could just not exist in a year, much 0:06:43.600 --> 0:06:47.480 less in fifteen. Look, one of the things that I 0:06:47.520 --> 0:06:51.560 realized is that most wealth managers, most estate planners would 0:06:51.560 --> 0:06:56.560 tell you to liquidate immediately that to accommodate that kind 0:06:56.760 --> 0:07:01.720 of risk. They will be like, no, let's immediately liquidate 0:07:01.760 --> 0:07:05.120 these assets into like FIAT and make sure we can 0:07:05.160 --> 0:07:09.520 fastlet alog and so you know, I think that those 0:07:09.520 --> 0:07:12.640 who have like a more complex view of that of crypto, 0:07:12.720 --> 0:07:16.080 and probably a little bit more experience. Are still struggling 0:07:16.240 --> 0:07:20.280 with that, I think, and there are solutions out there 0:07:20.440 --> 0:07:23.800 to be able to maybe transfer your assets into more 0:07:23.800 --> 0:07:29.400 stable coins things like as we've learned. So I think 0:07:29.440 --> 0:07:32.800 that it's still something that they're figuring out, and that 0:07:33.000 --> 0:07:35.680 is the biggest risk for these wealth managers. I think 0:07:35.680 --> 0:07:37.680 the quote that you had in this story is, you know, 0:07:37.880 --> 0:07:40.480 the natural inclination would be to tell clients to sell, 0:07:41.240 --> 0:07:43.280 you know, but some people won't listen. Some people will 0:07:43.280 --> 0:07:44.640 be like no, no, no, My n f T means 0:07:44.640 --> 0:07:46.360 the world to me. I would like my children to 0:07:46.360 --> 0:07:52.280 also have this monkey and fair. But valuations are hard, right, 0:07:52.320 --> 0:07:54.880 So the other elements of longevity is some kind of 0:07:54.880 --> 0:07:58.920 predictability around how much things are worth. And again, as 0:07:58.920 --> 0:08:01.760 you mentioned earlier, there's this intense amount of volatility even 0:08:01.800 --> 0:08:03.880 in a short amount of time, but also frankly over 0:08:03.920 --> 0:08:06.640 a longer time horizon. What are some of the strategies 0:08:06.640 --> 0:08:10.120 that the folks who are embracing that more complex view 0:08:10.760 --> 0:08:14.320 using to think about things like valuation. It's it's basically 0:08:14.400 --> 0:08:16.880 to treat it as property in the sense that you 0:08:16.960 --> 0:08:21.040 want a valuation and an appraisal of the value. And 0:08:21.320 --> 0:08:24.560 there are different experts out there who can do something 0:08:24.640 --> 0:08:29.120 like that. But all in all, everyone is kind of 0:08:29.160 --> 0:08:33.040 discovering this for themselves as they encounter crypto clients. One 0:08:33.080 --> 0:08:34.840 of the people that I talked to who didn't make 0:08:34.880 --> 0:08:38.200 it into this story is someone who used to be 0:08:38.360 --> 0:08:41.439 a nurse and you know, left their day job to 0:08:41.559 --> 0:08:45.600 trade crypto and has made millions in crypto. And he said, 0:08:45.600 --> 0:08:49.760 I'm basically the guinea pig for every tax professional, financial 0:08:49.760 --> 0:08:53.000 professional that I work with, And so you know, I 0:08:53.040 --> 0:08:55.319 think like treating it as property and trying to get 0:08:55.320 --> 0:08:58.600 an appraisal and then trying to work that into your 0:08:58.880 --> 0:09:01.040 understanding of the access that you'll have to pay, the 0:09:01.120 --> 0:09:03.319 vehicles that you might have to use, is the strategy 0:09:03.440 --> 0:09:08.080 right now. It does sound like perhaps the kids that 0:09:08.160 --> 0:09:10.160 were mentioned in that story, by the time they might 0:09:10.200 --> 0:09:11.880 want to pass on their cryptos to their heirs, of 0:09:11.920 --> 0:09:14.280 crypto is still around then, we don't know, there might 0:09:14.320 --> 0:09:16.720 be more infrastructure for them. But you know, right now, 0:09:16.760 --> 0:09:20.280 I'm getting the distinct impression that trial and error is 0:09:20.320 --> 0:09:22.800 the vibe of the day. Yeah, I mean, even getting 0:09:22.840 --> 0:09:25.559 people to tell you where all their crypto is. If 0:09:25.600 --> 0:09:28.120 you're an estate planner, a wealth planner, is a challenge. 0:09:28.600 --> 0:09:31.920 So if you're willing to share that, then estate planners 0:09:31.920 --> 0:09:36.200 and wealth planners have ways to accommodate accessing that crypto, 0:09:36.320 --> 0:09:39.200 making sure that there are multiple approvals in place for 0:09:39.240 --> 0:09:43.880 transactions to happen. But otherwise everyone is kind of doing 0:09:43.920 --> 0:09:47.920 it differently and uniquely to each case right now. I 0:09:48.000 --> 0:09:50.120 like that you mentioned the willingness to share, because for 0:09:50.160 --> 0:09:52.320 some people, the attraction of crypto is they don't have 0:09:52.360 --> 0:09:54.839 to tell anybody about it, which is of course in 0:09:54.920 --> 0:09:57.720 direct contradiction to making it possible for someone else to 0:09:57.760 --> 0:10:01.080 manage that for you. I remember we have reporting a 0:10:01.120 --> 0:10:04.560 few months ago about how crypto is becoming an issue 0:10:04.559 --> 0:10:09.080 in divorce cases, where there was one the question of okay, well, 0:10:09.120 --> 0:10:10.960 how do you value this as an asset? Exactly as 0:10:10.960 --> 0:10:15.760 you're saying, But also you discover, like the hidden wallet 0:10:16.640 --> 0:10:19.400 that a spouse had that mysteriously had five hundred thousand 0:10:19.400 --> 0:10:22.720 dollars in bitcoin that wasn't previously declared, So there are 0:10:22.760 --> 0:10:27.040 all kinds of ancillary, very interesting issues here. It sounds like, yeah, look, 0:10:27.120 --> 0:10:29.520 you know this anonymity that's being able to shield your 0:10:29.520 --> 0:10:32.480 wealth is basically at odds with a system that can 0:10:32.520 --> 0:10:35.320 distribute it to people when you die, and that's like 0:10:35.440 --> 0:10:38.640 probably the crux of the issue is if no one 0:10:38.679 --> 0:10:41.440 knows you have the crypto, or you forget all your keys, 0:10:41.840 --> 0:10:45.000 then how will your daughters and sons be able to 0:10:45.040 --> 0:10:48.599 access it? Question for our times. Thank you, Jill. That 0:10:48.720 --> 0:10:51.360 was a very helpful and fun explanation and appreciate you 0:10:51.360 --> 0:10:55.560 taking the time. Thanks so much. You can find more 0:10:55.640 --> 0:10:59.720 of Jill's reporting on the Bloomberg Terminal on Bloomberg dot com, 0:10:59.840 --> 0:11:06.880 or or follow Jill on Twitter at Jill R. Shah. 0:11:07.320 --> 0:11:10.480 On the next episode of Bloomberg Crypto, it's been a 0:11:10.520 --> 0:11:14.280 wild ride for crypto markets, and the main direction prices 0:11:14.320 --> 0:11:17.760 are heading in right now is down. Bloomberg Report is 0:11:17.800 --> 0:11:20.920 Muya Shan and Matt Turner join us tomorrow to discuss 0:11:20.960 --> 0:11:24.360 what's been happening to crypto tokens and crypto related stocks 0:11:24.400 --> 0:11:27.280 like coin base, and why sentiments across all of these 0:11:27.320 --> 0:11:33.760 markets feel so negative right now. I'm Stacy Marie Ishmael, 0:11:33.960 --> 0:11:37.880 and this is Bloomberg Crypto, a daily podcast from Bloomberg 0:11:37.920 --> 0:11:41.040 and I Heart Radio. For more shows from I Heart Radio, 0:11:41.480 --> 0:11:45.040 visit the i Heart Radio app, Apple Podcasts, or wherever 0:11:45.120 --> 0:11:49.599 you get your podcasts. Email your comments, questions, or suggestions 0:11:49.880 --> 0:11:53.080 to Crypto at bloomberg dot net. Find us on Twitter 0:11:53.400 --> 0:12:01.640 at Crypto. The supervising producer of this episode is Vicky Vergolina. 0:12:02.520 --> 0:12:06.840 Associate producer is zan Ab Sudiki. Blake Maples is our engineer. 0:12:07.720 --> 0:12:11.840 Original music by Leo Sidron. Bloomberg's head of podcasts is 0:12:11.840 --> 0:12:12.640 Francesco leav