CEA Digital Asset Management 5

Question 1

Which IRS form must an estate file if it holds more than $10,000 in foreign cryptocurrency exchange accounts?

Accepted Answer

FinCEN Form 114 (FBAR)

Answer

Foreign financial accounts, including foreign crypto exchange accounts, exceeding $10,000 in aggregate value must be reported via FBAR (FinCEN Form 114).

Question 2

A decedent ran a Substack newsletter with 10,000 paid subscribers at $10/month. For estate planning, the advisor should prioritize:

Accepted Answer

Valuing the subscriber base and planning for business continuity or sale

Answer

A paid newsletter with recurring revenue has significant goodwill and cash flow value that must be appraised and addressed through business continuity or sale planning.

Question 3

What is the primary purpose of including a 'no-contest' (in terrorem) clause in a will that contains digital asset bequests?

Accepted Answer

To discourage beneficiaries from challenging the will and risking their inheritance

Answer

A no-contest clause deters will challenges by providing that a beneficiary who contests the will forfeits their share, protecting the decedent's digital asset distribution plan.

Question 4

A client transfers $50,000 in Ethereum to an irrevocable trust. Which gift tax rule applies?

Accepted Answer

The transfer is a completed gift subject to gift tax rules and must be reported on Form 709

Answer

Transferring cryptocurrency to an irrevocable trust is a completed taxable gift; if it exceeds the annual exclusion, it must be reported on Form 709 and applied against the lifetime exemption.

Question 5

A client's estate includes login credentials stored in a personal notebook in the home safe. How should the advisor characterize this method?

Accepted Answer

Acceptable but risky — the notebook is vulnerable to physical theft, fire, and discovery by unintended parties

Answer

Physical notebooks can be lost, destroyed, or found by the wrong person; while legally valid, advisors should recommend supplementing with a secure digital vault or attorney-held copy.

(CEA) Certified Estate Advisor Practice Test

(CEA) Certified Estate Advisor Practice Test

CEA Digital Asset Management 5