Estate planning for NFTs and other digital assets

You know that a tech trend has gone mainstream when it makes it onto Saturday Night Live

Earlier this year, the long-running comedy show tackled non-fungible tokens via the medium of rap parody with an Eminem style song that explained how these digital assets verify their uniqueness via blockchain transactions – the same technology that underpins cryptocurrencies like bitcoin.

The sketch followed a spate of high-profile sales of NFT artwork, including a JPEG image by a digital artist known as Beeple that fetched an astonishing US$69 million at auction. Others have since gotten in on the craze, with Twitter’s founder selling a tokenized version of his first Tweet and the NBA peddling collectible NFTs of video highlights to fans. 

The jury seems to be out on the long-term viability of NFTs as an investment vehicle, but if you have jumped on the bandwagon, then you should include any tokens you hold in your estate plan, along with the passwords or keys that certify you as the owner.  

But NFTs aren’t the only digital assets that testators should be concerned with – at our firm, every new client is asked to compile a list of all their online accounts, including social media profiles, email addresses, banking and even loyalty points, along with the sign-in information for each.

With so much of our lives lived online these days, it can be emotionally as well as financially damaging for family members to find themselves locked out of their loved ones’ accounts after their passing. 

Canada is a little behind compared to other jurisdictions when it comes to laws governing executors’ rights to take over online accounts. In the absence of legislation, it’s largely up to individual companies how they handle requests from surviving friends and family of deceased account holders, and many require a court order before they’ll even think about taking action. 

Not everyone will want their heirs gaining access to every part of their online life, but it’s best to give the issue some thought and spell out your wishes in an estate plan. 

Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.

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