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3 reasons bitcoiners should consider hiring a financial planner

3 reasons bitcoiners should consider hiring a financial planner

October 11, 2023

"Don’t Trust. Verify.” - Bitcoiners

It is a rallying cry, encapsulating the desire to change the traditional financial system’s shortcomings. A bitcoiner’s radar is tuned for potential scams, counterparty risks, excessive fees, dishonest marketing, and the like. More viscerally than most, they understand the importance of carefully navigating the complex financial landscape. The very nature of a bitcoiner’s success comes from their instinct to verify. Trust can be abused; verification cannot. 

But trust is what society is built on. Trust is what binds humanity and drives economies. It may be the most valuable resource we have. 

Imagine a chef who tastes every ingredient before adding it to the dish, a patient who doesn’t believe in her surgeon, or a ship captain who doesn’t trust his first mate when the storm comes. A verification-only world is a high friction, low cooperation, low creativity world. 

I suggest, “Don’t just trust. Verify also.”

The key to understanding why Sound Advisory will be an invaluable asset is that verification allows for deeper trust. Bitcoiners know that if properly managed, their wealth can never be stolen. Bitcoin verification and private key ownership allow them to trust others again, especially those who might be involved in helping manage their money decisions. So, just as seasoned adventurers rely on expert guides to chart their course, bitcoiners should consider engaging a financial planner as a financial navigator. 

This article will explore why two heads are often better than one when pursuing the best way to use financial resources. Competent financial planners can help bitcoiners craft effective distribution and utilization strategies, address potential tax pitfalls, and develop solid inheritance plans to ensure a smooth and successful bitcoin journey. Every financial strategy is incomplete without a bitcoin plan, and every bitcoin strategy is incomplete without a financial plan.

Decoding distribution strategies: Charting the course to financial independence

As your bitcoin wealth grows, the questions will arise: How do I effectively distribute/use it to achieve financial independence? Should I sell bitcoin? Loan against it? Take it from my IRA accounts or regular taxable accounts? 

Distribution plans will vary from person to person because no two people’s goals, liabilities, and resources are identical. A custom distribution plan will consider factors like tax implications, market conditions, and short- and long-term objectives. 

To start poking at what your bitcoin distribution plan might look like, here are some questions you should answer:

  • Have you outlined your short, medium, and long-term financial goals and objectives? What could those costs look like, given their timeframes?
  • What is your current cash flow, and what would you do if it changed unexpectedly? 
  • How will you transition from accumulating to distributing? Do you know how to create a sustainable income stream while preserving and growing your bitcoin holdings? 
  • How will you manage bitcoin volatility through your distribution scenario?
  • Have you considered the tax implications of your distribution decisions and how they may impact your overall financial plan?

A financial planner creates a personalized distribution strategy that aligns with your financial goals and risk tolerance. With a thoughtfully designed distribution strategy, you can manage your assets effectively, providing for your financial needs while preserving and growing your bitcoin wealth.

Tax matters: Navigating complexity with expert guidance

The potential tax pitfalls involved with bitcoin are many—lingering like swarming sharks as you navigate the seas

It is important to stay informed about current laws and strategically navigate today's financial and tax systems, even as we anticipate the future of bitcoin as a potential successor to the dollar.

Taxes are the number one cost that most people will experience throughout their lives, and they are by no means straightforward to understand. As the waves of bitcoin's volatility surge, tax implications lurk beneath the surface, ready to catch unprepared investors off guard. Tax is the primary cash flow friction in nearly every financial plan, limiting the resources you can use to pursue your goals. 

Here are a few significant questions to ask yourself when evaluating your tax situation:

  • Do you have a tax-aware plan to sell, rebalance, loan against, gift, and purchase bitcoin?
  • Are you confident in understanding and tracking your bitcoin cost basis and how each transaction affects your tax liability?
  • Do you know how to utilize tax-efficient IRA (both Traditional and Roth) accounts to maximize the growth of your bitcoin while minimizing tax burdens?
  • Have you considered the benefits of tax-aware rebalancing to ensure your bitcoin portfolio remains optimized for tax efficiency?
  • What marginal tax bracket are you experiencing, and what bitcoin moves could you make accordingly?
  • Do you itemize or take the standard deduction? In what ways could bitcoin become a write-off for you? 
  • What effect will estate tax have on your bitcoin wealth, especially if it continues to grow as anticipated?

These questions serve as a starting point to assess the potential friction in your financial plan. A competent financial planner can help you navigate a path forward to reduce or eliminate potential tax pitfalls. 

A skilled financial planner is your expert navigator, looking forward to future tax liabilities and devising strategies to optimize your bitcoin holdings. With their assistance, you can protect your hard-earned satoshis from being eroded by unforeseen tax burdens, potentially saving a significant amount of your bitcoin wealth and allowing it to grow more effectively over time.

Crafting a solid estate plan: Securing your financial legacy

Ensure your precious bitcoin treasure is ready to be passed to the next generation

It’s incredible and humbling to watch the world go through the process of adopting bitcoin. Demand is growing, bitcoin companies are blooming, and people are voting with their money to see change. What a time to be alive and witness it all happening! And if bitcoin succeeds, it will drastically impact generations to come. 

I’ve met with hundreds of clients on retirement and inheritance consultations to discuss their bitcoin holdings, and most bitcoiners I interact with are the only “bitcoin believer” in their households. They are the only ones in their family pursuing the rabbit hole deeper and gaining conviction. Often they will have a spouse or other loved ones that “believe in the bitcoin believer” but don’t necessarily care about bitcoin themselves. 

And herein lies the problem. The bitcoiner's implicit plan is to leave a highly technical asset to people they love, who may or may not be able to access and utilize it. Most of them haven’t planned how to effectively pass their bitcoin wealth to those who will live beyond them. 

The solution: Bitcoiners must address their wealth transfer from a legal and a technical perspective. An all-encompassing estate plan (legal and technical) is essential to ensure a seamless transfer of your bitcoin wealth to your loved ones.

Without this plan, your heirs might encounter challenges while accessing your assets.

In a sense, the law doesn’t currently understand how bitcoin works, and bitcoin doesn’t care about the law. Bitcoiners are compelled to understand the estate implications of both. 

Your heirs could be stuck battling each other through attorneys for legal custody of the bitcoin. They could lose access by only having partial private key/wallet information. The state-run probate process could dox your inheritor's identity and bitcoin balances. The list goes on. 

To start to gauge the questions you should answer:

  • Have you considered the potential technical and legal complications your heirs might face in accessing your bitcoin assets after your passing?
  • Who can access your bitcoin in the event of your incapacity or death? How will they do so?
  • Do you know how to incorporate bitcoin holdings into your estate plan to ensure a smooth and efficient transfer to your loved ones?
  • Do your loved ones know how to use private keys and hardware wallets?
  • Are you aware of estate tax implications and how they may affect the value of your bitcoin inheritance for your heirs?
  • How will you, if you so choose, give bitcoin to charities, non-profits, and causes that you care about?

A financial planner can guide you toward an estate and inheritance plan that best meets your and your inheritors' legal and technical needs. They are your trusted collaborator in designing a robust estate plan that safeguards your bitcoin wealth according to your wishes. 


Unless you’re immune to death, taxes, or ever needing to use your bitcoin, it’s wise to consider how a financial planner could help you navigate your situation. 

Partnering with a financial planner is akin to sailing with a seasoned captain at your side, guiding you through the complicated waters of the financial world. By developing a solid estate plan, addressing your unique tax situation, and crafting an effective cash flow plan, a financial planner can help you unlock the full potential of your bitcoin voyage.

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