ArticleThe tech rush is on, and clients are increasingly asking about non-fungible tokens or “NFTs.” This article will take a brief glance at the NFT frenzy and explore some of the estate planning considerations to think about when planning with these assets.
What Are They?
On a basic level, an NFT is a digital asset with a unique identifying code that allows the NFT to be verified through the use of blockchain technology. For example, an artist may create a digital artwork whose ownership is acquired through a code provided to the owner. When someone purchases an NFT, there is a public digital ledger entry which verifies the owner of the NFT. The only way to access the NFT is to have a private key, generally a series of twelve to twenty-four randomly generated words, that gives the purchaser access to the digital wallet that stores the NFT.
Unlike cash in which one dollar can always be exchanged for another, no NFT can be directly substituted for another because each contains its own unique code. NFTs are often created by artists and celebrities as another way to monetize their work. In simple terms, instead of getting a painting to hang on a wall, the buyer of an NFT receives a digital file of an artwork.
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NFT Essentials for Estate Planners: Not a “Token” Estate Planning Opportunity | Nassau Lawyer
Reprinted with permission by the Nassau County Bar Association
