If you want your crypto-assets to outlast you, then you need to include them in your estate plan.
One of the biggest attractions for holders of cryptocurrencies such as Bitcoin or Etherium is the security of the blockchain technology that backs them up, encrypting and logging every single transaction between the wallets where the currencies is stored.
But that security is a double-edged sword: if the passwords that protect the wallets are ever lost or forgotten, then their contents might as well disappear into the ether, because of the lack of a central banking authority to guarantee the funds.
A few years ago, the Wall Street Journal reported that as much as 20 per cent of all the Bitcoin in existence is inaccessible to anyone, most of it lost forever without the digital keys to unlock it.
If assets are held indirectly through a cryptocurrency exchange like Coinbase or Bitbuy, heirs may have more luck trying to take control of the profile without the password details, as long as they can prove that the original account-holder has died and their relationship to the deceased.
A more straightforward option for everyone involved is for testators to include details of any crypto-assets they own in their will, along with the passwords and keys that certify them as the owner.
Still, cryptocurrencies 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 website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.