It has been estimated that approximately 20 per cent of all Bitcoin cryptocurrency has been lost due to the inability to access it. Do a quick Internet search of Matthew Mellon, banking heir who died suddenly in 2018, for an interesting read on how his estimated $500 million in XRP digital currency halted the administration of his estate for years, that wealth being almost lost completely because he had not shared his access keys before he died.
To protect the digital inheritance, you wish to pass on, an integral part of your efforts must be to create a digital estate plan so your Fiduciary (executor, administrator, attorney acting under Power of Attorney, trustee, or court-appointed committee/guardian) can have some ability to access those assets in the event of your death or mental incapacity.
Your Fiduciary’s primary obstacle will soon surface: Terms of Service Agreements. Each user agrees to such terms when opening an online account, but virtually no user ever reads them.
Given the gap in legislation in Canada, the US and most other jurisdictions to allow access to such information and assets by a person’s Fiduciary, what happens to your digital assets is currently dictated in large part by the service agreements a user holds with any given service provider.
Each service provider has its own terms of service that will govern, among other things, what can and cannot be done with your digital assets upon your death or incapacity, including whether those assets and related information can be transferred to another party, changed, deleted or even accessed in the first place. And, of course, those terms are subject to change at any time.
A key focus of the service providers is the protection of a user’s private information once the user is no longer able to control that information themselves. That protection contradicts the legal requirements of basic estate administration and power of attorney obligations to gather and administer those assets once the user has lost capacity or passed away.
On the date the previous article in this series was published, the only Canadian jurisdictions having legislation specifically allowing someone to access another person’s digital asset information were Saskatchewan and Prince Edward Island.
Since that time, New Brunswick has passed its Fiduciaries Access to Digital Assets Act, which received Royal Assent on December 16, 2022, and notably contains provisions similar to the Acts in place in
Saskatchewan and PEI
While we wait for the law to catch up to technology, you or your clients need to take active steps to plan for such assets upon your death or possible loss of mental capacity. Such plans can be included in a Will and Power of Attorney, or in a separate stand-alone document.
Steps such as naming a “legacy contact” may also need to be taken on the service provider’s website itself.
The main steps to creating a digital estate plan are:
- Create list of digital property (hardware, online and social media accts, rewards points)
- Provide means to access devices and online or Cloud assets (passwords, keys)
- Decide what you want to happen to each one
- Appoint digital executor
- Properly document intentions:
- Clauses in POA and Will authorizing access
- Clauses in POA and Will preventing access if that is the preference
- Regularly update list and instructions to your Fiduciary
Bottom line – make your information known and accessible. Plan, plan, and plan some more!
About Charlotte M. McCurdy
Charlotte M. McCurdy joined Perley-Robertson, Hill & McDougall’s Business Law Group in 2021 after working at a Winnipeg based firm where she held the position of Partner since January 2011.
Charlotte was called to the Manitoba Bar in 1992 after completing her law degree at the University of Manitoba. Charlotte’s practice focusses primarily on corporate and commercial law and Wills, Estates, Estate Planning and Elder Law.
She has extensive experience in lender side financing and general commercial work, advising small to mid-size businesses, as well as incapacity planning, estate administration and elder law issues. Charlotte’s vast experience, along with her detailed work ethic make her a valuable member of our Business Law Group and Personal Legal Needs Group.