NFTs have become quite an investment trend in the last few decades or so. It is no surprise that Malaysians are including those in their trusts and wills. Though it is a valid consideration, not everyone may understand when it comes to NFTs and consolidating them in their legal documents. Especially in wills and trusts.
If you haven’t been aware, you can also include your NFTs in your wills and trusts. The more you know here!
What are NFTs?
NFY is a short form acronym for non-fungible token. It means that it is a unique asset that cannot be exchanged for another of the same type. The way it functions is similar to fine arts but digitally. Like we all know there is only one original Mona Lisa art in the world. There are copies of it available across the planet. However, there is only one legitimate and original Mona Lisa art.
For NFTs, it works the same way. NFTs can be pieces of collectible digital arts and assets. It can be digital arts, digital images, digital music, and whatnot. NFT investors can choose to buy the unique assets in hopes that these assets’ values increase over time.
However, in traditional media and art, there will always be the question of authenticity. People may ask if they are owning a print or a reproduction copy? Or do they own the original copy? We can assure you that most times it’s always a non-original copy.
For NFTs, it works differently. NFTs benefit from blockchain technology. Each and every NFT is made up of a set of special and unique information. They are created in such a way they are distinctive from every and all copies. The information is released using blockchain that is produced on a smart contract platform like cryptocurrency.
When the particular NFT goes into a different owner’s hands, blockchain ledgers track the ownership interests, Inventors will always know if they are in possession of the original NFT.
How do you include NFTs in your trusts and wills?
Yes, you can include your NFTs and all other digital assets in your wills and trusts. Some Malaysians may not realize that as they think that there will be no benefits to including it in their wills. However, they are dead wrong as NFTs may be financially beneficial at certain points in time.
At some point in time, it may increase in value, hence making the owners pretty financially loaded. When it is not doing well, the owner may not be as financially “well off” as they were before.
What you can do is to list all your NFT assets down in your trusts and wills. List the locations of your NFTs that you have online. After that, you should include any and all account details, including the login IDs and passwords. If it needs the users any extra passcodes to access the accounts, please provide this information too.
After that, you should come up with a step-by-step guide on how to access the accounts. Besides entering the usernames and passwords or passcodes, is there anything else the users need to key in? Are there any security questions the users should know about that can help them get the account back? List that information down too.
It’s pretty simple, in fact, when it comes to including this information in your wills and trusts. Sit with a lawyer and your trustee so they can guide you through. Whenever you have a new account with new profits, immediately include these too.
Don’t wait till you have passed away. It will be too late by then for your beneficiaries to claim anything. It may be very difficult for them to claim anything from these accounts in the future. Even if they do get to claim it, it will be an uphill battle for them. Always review your wills and trusts periodically and regularly so you will not miss out on anything.
Share of NFT profits
Some people may wonder how the NFT profits be shared among all the beneficiaries listed. It works the same way as your regular assets. You can divide them into equal shares or you can give one beneficiary more share than the others. Let’s say you have 4 beneficiaries. You can divide up the NFT profits as such:
- Beneficiary 1: 40%
- Beneficiary 2: 20%
- Beneficiary 3: 20%
- Beneficiary 4: 10%
If you do not have a trust or will be left behind, then it will follow Malaysia’s statutory law of the Distribution Act (1958). Here is a quick rundown of how the assets will be distributed according to the 1958 Act.
Your NFTs will be distributed pretty much in the same ways your other assets are distributed. If you are still unsure of how it is done, feel free to reach out to us today for help. We’d be more than happy to assist.