CEA Digital Asset Management 3 — Questions and Answers
Question 1: A client owns a domain name generating passive income. Which document should specifically address its transfer to heirs?
- Social media legacy contact form
- A specific bequest in the will or trust naming the domain (Correct answer)
- A standard beneficiary designation form
- A RUFADAA online tool directive only
Correct answer: A specific bequest in the will or trust naming the domain
Domain names are transferable property that should be specifically bequeathed in a will or trust to ensure clear title passes to the intended heir.
Question 2: Which of the following best describes a 'digital asset inventory' in the context of estate planning?
- A list of physical devices owned by the decedent
- A comprehensive record of digital accounts, assets, and access credentials (Correct answer)
- A court filing describing online debts
- A tax schedule submitted with Form 706
Correct answer: A comprehensive record of digital accounts, assets, and access credentials
A digital asset inventory documents all online accounts, cryptocurrencies, and digital property along with login credentials to enable fiduciary administration.
Question 3: A client's Venmo account holds $3,000 at death. How does Venmo's Terms of Service typically affect estate administration?
- The balance automatically transfers to the linked bank account
- Venmo may require proof of death and fiduciary authority before releasing funds (Correct answer)
- The funds become property of Venmo after 30 days
- The balance is subject to a separate probate proceeding in Delaware
Correct answer: Venmo may require proof of death and fiduciary authority before releasing funds
Payment platforms like Venmo require documentation of death and fiduciary authority (e.g., letters testamentary) before releasing funds to an estate.
Question 4: Which scenario correctly illustrates an asset that is NOT a digital asset for estate planning purposes?
- A cryptocurrency wallet balance
- A subscription-based streaming service account
- A physical gold coin stored in a safe (Correct answer)
- An online brokerage account
Correct answer: A physical gold coin stored in a safe
Physical gold is tangible personal property, not a digital asset, even if its price is tracked online.
Question 5: When advising a client about naming a 'legacy contact' on Facebook, what limitation must the advisor communicate?
- The legacy contact inherits the monetary value of the account
- The legacy contact can only manage a memorialized profile, not access private messages (Correct answer)
- Facebook transfers the account to the legacy contact as property
- The legacy contact designation overrides state inheritance law
Correct answer: The legacy contact can only manage a memorialized profile, not access private messages
Facebook's legacy contact can post tributes and manage the memorialized account but cannot read the decedent's private messages or inherit the account.
Question 6: A decedent held 5 ETH on a centralized exchange at death. What is the estate's first practical step to claim this asset?
- File a claim with the FDIC
- Contact the exchange with a death certificate and letters testamentary (Correct answer)
- Transfer the ETH to a new cold wallet immediately
- Report the holding to FinCEN within 30 days
Correct answer: Contact the exchange with a death certificate and letters testamentary
Centralized exchanges require official death documentation and fiduciary credentials before they will release or transfer crypto assets to the estate.
Question 7: Which estate planning tool allows a client to store digital asset credentials securely while granting fiduciary access only upon incapacity or death?
- A joint tenancy agreement
- A digital vault or password manager with emergency access protocol (Correct answer)
- A TOD (transfer-on-death) deed
- An IRA beneficiary designation
Correct answer: A digital vault or password manager with emergency access protocol
Password managers like Bitwarden or LastPass offer emergency access features that grant designated contacts access after a set waiting period or upon death.
CEA Digital Asset Management 3
A client owns a domain name generating passive income.
Which document should specifically address its transfer to heirs?