Original post with images here: https://x.com/NuclearHerbs/status/1768652392558682350
Welcome back to #PulseChainLawSchool. Today’s topic: Death and Taxes
Richard tossing around the number 14,000 has been garnering some discussion, so let’s discuss some legal stuff that you need to be aware of if/when that happens.
Take a minute and imagine what 14,000x would be like. If the calculator on my computer is working, it looks like a $1,000 sacrifice would be (holy shit, is that right???) $14,000,000, which might still be enough to buy brand-name groceries after a few more years of Bidenomics and Jerome Powell’s money printer.
On the downside, it also puts you over the current estate tax exemption (for 2024) of $13.6M for individuals, so if you don’t send the IRS a check, they’ll come dig you up and throw your corpse in jail. The exemption is $27.2M for married couples, and let’s be real here: even if you look like the Elephant Man, you’re going to find someone who wants to marry you if you’re worth $27M. Many of us fondly remember how lucky Anna Nicole Smith was to find love with a rich-as-tits octogenarian oil tycoon, and that was long before crypto when you actually had to work for decades to make that kind of money. The horror!
Anyway, to quote Snoop Dogg: “Back to the lecture at hand.”
Now imagine the absolute shitshow that would take place if you died with that kind of money and didn’t have an estate plan in place. People fight harder than @BenArmstrongsX over stuff that has nothing but sentimental value all the time after a relative dies. What do you think they’ll do if there’s a literal pot of gold sitting at the end of the rainbow over your jewel-encrusted headstone planted behind your 20,000 sq ft manor because your PLS bags are now circling some moon in a distant galaxy so far away that Elon Musk isn’t even planning on going there?
Nobody ever thinks they’re going to die, at least not anytime soon. I’ve done wills for people in their 90s who’d never had one before, because they knew they weren’t going to die despite the fact that all their friends and family members had been dropping dead around them for decades. I’ve also had friends tragically die in their 30s and 40s. There’s a “27 club” for a reason. A hockey teammate of mine wanted my firm to do an estate plan a few years back. Before he got it done, he tore up his knee in a game, had surgery, and died from a blood clot two weeks later, leaving a fiancée and a new baby. Another friend of mine had a teammate literally fall over and die next to him on the bench during a game. You never know when it’s your time. And now that I think about it, I should really consider retiring from hockey too. Nah, dying only happens to other people, right? Besides, I’m way older than 27, so I’m good.
I did a bunch of probate litigation during my career, and people are more vicious in will and trust actions than in any other type of litigation (divorces, business breakups, etc) – often because you’re dealing with more than two people that hate each other. The most was a case with 7 brothers and sisters fighting with each other over mom’s stuff. Can’t say I enjoyed any part of that one. Combined, they all spent more on attorneys’ fees than the entire estate was worth. And that wasn’t the first or last time I saw that happen.
And if you’re thinking you’ve got to be rich to worry about that kind of stuff, let me stop you right there. Most of the cases I had were people fighting over estates worth between $250k and $10M.
So your girlfriend really was telling you the truth – size doesn’t matter!
These are tips, not legal advice. Get legal advice from your lawyer. I don’t even know you.
1. You need an estate plan in place whether you’re 18 or 118. Period. I like Trusts as the base of an estate plan regardless of the size of your estate, for a whole shitload of reasons, not the least of which are (a) privacy, (b) the ease with which they can be amended, and (c) they can take effect while you’re still alive, unlike a Will, which only takes effect when you’re dead. That’s critically important for things like long-term care planning if you wind up with Alzheimer’s or something. Your attorney will fill you in on reasons (d) through (z).
2. For the love of all that is good and holy, do not buy some trust or will off of legalzoom or some other website. Estate plans are not OSFA, even if your net worth is completely average. One of two possibly allowable exceptions to this is if your pilot tells you that your plane is going to crash and you can download one and fill it out before it hits the ground. The other is if you’re 18 and have nothing but pocket lint, student loans, and empty beer cans to your name.
3. There are many, many, many different trust options, and as said above, you can put one in place and amend it as many times as you like (yes, there are exceptions like irrevocable trusts, but remember I talk about the 95% here, not the 5%). A good estate planning attorney will be able to explain which types may be a good fit for you. Even the type you need now may not be what you need later due to changes in laws or your own situation.
And as always, remember that Congress can f*ck your entire estate plan with the stroke of a pen at any time by changing the exemption amounts, which could very well happen if they decide that we’re not being taxed enough. It’s happened before.
So review your estate plan every few years and modify it according to fit your current situation. Maybe you have another kid. Maybe you change wives or husbands or both. I don’t judge. Maybe you want to leave your beach house to your cat instead of your ungrateful teenager with the ridiculous nose ring who’s been lecturing you on the evils of capitalism and orange politicians. Whatever. Just do it. Yes, it can get pricey sometimes, but I guarantee you that probate litigation costs are WAY more than the price of a trust amendment. The costs and fees to defend your trust usually come from your trust, so it’s only taking away from what you tried to leave to people.
To highlight the importance of updating regularly, I once had a case where a husband and wife made a metric f*ckton of money in commercial real estate. They had a ridiculously complex trust drafted (by someone else!) when they were richer than they ever deserved to be. They put the trust on the shelf for something like 20 years, blew most of their money, and never updated it. In the end, there were supposed to have been outright gifts of millions to specific individuals. Guess what didn’t happen. But the kids still fought over the scraps for a few years anyway, because that’s what families do.
Final tip here:
Don’t just google “estate planning attorneys” and think you’re good to go because someone’s been doing this shit for 30 years. Almost no attorneys I know have any knowledge of crypto, what a seed phrase is, what a Trezor looks like, or what a 0x address is or how to find out what’s in one. At best, they might own some Bitcoin in a Coinbase account and think they’re savvy on all things crypto. *Everyone* reading this post has more knowledge about crypto than any estate planning attorney I know.
And I’d bet a whole pile of money that if a family member of someone who died brought a notepad with 24 words on it into most attorneys’ offices, they wouldn’t know what it meant or what to do with it. They’d probably conclude it was some shitty attempt at poetry or a list of potential dog names or some other dumb thing and toss it in the shredder.
It’s sobering to know that somewhere around 20% of Bitcoin is lost forever due to lost seed phrases, people dying, etc. Remember the Quadriga CX guy who died and nobody knew how to access the $200M in client funds in the company wallet? Don’t be that guy. Don’t do that to your long-term Hex stakes, where your family would have to watch them bleed out and can’t do anything about it because they can’t access your wallet.
Find an estate planning attorney who understands your situation, *especially* your crypto situation, and can advise you accordingly. There will be more such attorneys in the future as mass adoption occurs. They’re not common today. Ask the right questions before you sign up.
Now, let’s get back to imagining life at 14,000x.
As always, nothing I say is legal advice.
