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Death in a Digital Age

Your digital assets include everything from your smart phone and Amazon accounts to your social media accounts and web-based banking applications. The Uniform Access to Digital Assets by Fiduciaries Act (2016), as described below, defines a digital asset as “a record that is created, recorded, transmitted or stored in digital or other intangible form by electronic, magnetic or optical means or by any other similar means”. A digital asset includes any electronic possession a person may have.

It may seem surprising that although Facebook was launched in 2004 and the first iPhone was released in 2007, there is still no legislative framework for accessing, administering or disposing of digital assets in Canada, except for Alberta as noted below.

In Ontario, the governing legislation with respect to estate administration, the Estates Administration Act, does not explicitly refer to any assets of a digital nature. Similarly, the Substitute Decisions Act, 1992, which governs what happens when someone is not capable of making certain decisions about his or her property or personal care, also does not directly refer to digital assets.

Alberta’s Estate Administration Act is the only Canadian succession related statute to make reference to online accounts. The reference is within the context of the executor’s duty to identify estate assets and liabilities, which includes online accounts.

The United States leads the charge in the domain of fiduciary rights concerning digital assets, with Canada, the United Kingdom and Australia lagging behind. In the United States, over 40 states have adopted the U.S. Uniform Law Commission’s proposal, the Revised Uniform Fiduciary Access to Digital Assets Act (2015), which governs access to a person’s online accounts when the account holder dies or is incapable of managing accounts.

The Canadian Uniform Law Commission proposed the Uniform Access to Digital Assets by Fiduciaries Act (2016) in August 2016, but it has yet to be adopted. The proposed legislation would authorize fiduciaries, including executors and substitute decision makers (i.e. an attorney for or guardian of property), to access digital assets where the instrument empowering the fiduciary, such as a will, power of attorney or guardianship order, trust, or court order provides for such authority.

Digital assets can have sentimental value, such as pictures on an Instagram account, or monetary value, such as loyalty rewards points or cryptocurrency.

Some digital assets may be easier to deal with than others because the institution with which the asset is stored or accessed may have a policy in place for how to deal with the asset on death. For example, in the event of the death of a Twitter user, the company will work with a personal representative of the estate or with a verified immediate family member of the deceased to have a Twitter account deactivated.

On the other end of the spectrum, cryptocurrency illustrates an extreme example of challenges to the administration of digital assets. If you lose the private key to your cryptocurrency, your funds are gone forever.

A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange, which is not controlled by any central authority. It is a global currency, a well-known example of which is Bitcoin. You may recall the Canadian cryptocurrency exchange, QuadrigaCX, that lost hundreds of millions of dollars in late 2018. The founder of the cryptocurrency exchange died suddenly taking passwords and user information with him. Tens of thousands of investors were at a loss as to how to access their funds.

Among many issues surrounding this story, from an estate administration perspective, QuadrigaCX provides a cautionary tale regarding dealing with digital assets, including the need to consider and to make provisions for your digital assets. If no provision is made with respect to a digital asset with an irretrievable password, the underlying asset whether it has sentimental or monetary value will die with you, which would not be your intention.

Because of the uncertain legal regime surrounding these challenging and often elusive assets, the best tool you can give your executor or attorney for property is the clear authority to deal with your digital assets in your Will or Continuing Attorney for Property, and even then, an executor may run into issues stemming from privacy concerns. It may also be helpful to keep an inventory of your digital assets and list any specific instructions you may have with respect to how to deal with certain digital assets. It is important to consider your digital assets in the scope of your estate plan and to make sure you have received proper legal advice, especially given the uncertain and evolving legal framework.

-Marly Peikes

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. In particular, they are not intended to provide U.S. legal or tax advice. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.