If you have been active in this area, it’s important to include your crypto assets in your Will. Your legal team and beneficiaries need to be aware of your activity and be able to access your account.

A brief definition of cryptocurrency

You may have heard the terms ‘crypto’, ‘blockchain’ and ‘Bitcoin’.

Cryptocurrency is the term used to describe digital or virtual currency that uses cryptography for security and operates independently of a central bank. The most well-known cryptocurrency is Bitcoin, but there are others such as Ethereum, Dogecoin, and Polkadot.

Cryptocurrency transactions are recorded on a decentralised digital ledger called a blockchain, which ensures transactions are secure and cannot be altered. Like other forms of investments, cryptocurrency can be bought and sold on exchanges.

Including your cryptocurrency investments in your Will

When you pass away, your legal team, your Will Executor and your beneficiaries need to know what to do with your belongings, and this includes any cryptocurrency investments you have made.

Part of the reason this is important is because crypto is relatively new. There aren’t clear legislations around distributing this kind of asset after someone passes away in Australia. If you don’t make it very clear what your wishes are, your beneficiaries may never even know you have a crypto account. If they are aware of it but you haven’t left any instructions about distributing the proceeds, they can wind up in a dispute, which is costly, frustrating and time-consuming.

When you create your Will, keep in mind that you may need to update it. Crypto investments have proven to be volatile so if you leave someone your entire crypto ‘fortune’ and nothing else, you need to keep an eye on its value and rearrange your Will if things change dramatically.

What to include in your Will in relation to cryptocurrency

When including cryptocurrency in your Will, be clear about this asset but don’t necessarily include the login details for your crypto wallet (which is where your crypto is stored) in the Will itself.

Make sure your Executor has access to information about the account, but store the login and password details somewhere safe, for example with your lawyer.

How you divide the proceeds of your crypto investments in your Will is up to you but speak to your legal team if you need specific advice.

Tax implications of cryptocurrency in your Will

Another important consideration when including cryptocurrency in your will is tax.

Cryptocurrency is treated differently than traditional assets for tax purposes, and it is important to understand the implications of transferring your cryptocurrency assets to your beneficiaries.

In Australia, cryptocurrency is treated as an asset for tax purposes, which means that any gains or losses on the sale or exchange of cryptocurrency are subject to capital gains tax. If you transfer your cryptocurrency assets to your family or other loved ones after you pass away, they may be responsible for paying capital gains tax on any gains that occur after your death.

If your investments are significant, you may need to speak with an accountant as well as your lawyer to get an idea of how growth in crypto value may affect your beneficiaries’ tax.

Give yourself and your family peace of mind about all your assets, including cryptocurrency. Reach out to Legal Affairs Lounge to start preparing your Will today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.

A business may also restructure in order to grow or change direction. It can be a catalyst for positive change, especially when executed with a clear understanding of numbers and purpose.

The positive results of a restructure may be:

• Increased cash flow
• More manageable debts
• Better control of expenses
• Greater flexibility to operate in the current market
• A more competitive position in the market
• Increased profits
• A more compliant business

To start the process, your legal and financial team will do all or some of the following:

• Analyse current and recent performance (across sales, profits etc)
• Conduct forecasting and predict future outcomes
• Review a range of strategies and solutions
• Develop an action plan to move forward

This is why some clients reach out to us for help to restructure their business:

Change in market conditions

Market conditions are constantly evolving and companies must adapt to remain relevant. Changes in consumer spending or demand and the emergence of new competitors can significantly affect a business’s performance.

If a business is struggling to keep up with these changes, it might be time to restructure. For example, if a business is experiencing declining sales due to new technology being introduced to the market (think Blackberry vs iPhone), restructuring can help it realign its operations to meet these new demands.

Declining sales or financial difficulties

Financial difficulties can arise for many reasons, such as poor management, high debt levels or an unexpected downturn in sales. If a business is struggling financially, it may need to restructure to address these issues.

Restructuring can involve cost-cutting measures such as layoffs or reducing expenses, to improve the company’s financial position. In some cases, a company may need to restructure its debt or seek new financing options.

Expansion, diversification or strategy

As a business grows, it may need to restructure to support its expansion or diversification efforts. For example, if a business wants to start operating in new markets or launch new products, it may need to restructure its operations. This could involve hiring new staff, investing in new equipment or reorganising the company’s management structure.

A company might restructure in order to take on more debt and limit the personal liability of the director/owner. For example, it may make sense for a business that was originally operated as a partnership to move to be a more formal company, so the entity stands alone.

Changes in ownership or leadership

Changes in ownership or leadership can also be a catalyst for restructuring. If a business is sold or acquired, the new owners may want to restructure to align the business with their strategic goals. Similarly, if there is a change in leadership, the new management team may decide to restructure to improve the company’s performance.

Regulatory compliance

Regulatory compliance is a critical aspect of doing business in Australia. Companies must comply with a range of regulations, including tax laws, employment laws, and industry-specific regulations. If a company is struggling to comply with these regulations, restructuring may be necessary to address these issues. For example, a company may need to restructure its payroll system to ensure compliance with employment laws or reorganise its operations to meet new industrial regulations.

If any of the above apply to your business and restructuring is an option, Reach out to Legal Affairs Lounge today.

Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for legal advice. Whilst the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact upon the accuracy of the information.