Digital assets represent an increasingly significant portion of modern estates. From cryptocurrency holdings to online business accounts, from social media presence to digital photo collections, your digital life has value that needs to be addressed in estate planning. Understanding how to include digital assets in your estate plan ensures nothing important is lost.
Table of contents
What are digital assets?
Types of digital assets
Why digital asset planning matters
Challenges with digital assets
Including digital assets in your estate plan
Managing passwords and access
Legal considerations in Canada
Working with digital assets after death
What are digital assets?
Digital assets are any online accounts, data, or virtual property with value. This includes everything from email accounts to cryptocurrency, from loyalty points to domain names. Anything that exists digitally and has value qualifies as a digital asset.
The value might be monetary, sentimental, or practical. A cryptocurrency portfolio has obvious monetary value. Family photos stored online have sentimental value. Business-related accounts have practical value for continuing operations. All require attention in estate planning.
Digital assets differ from physical assets in important ways. They can be accessed from anywhere, are often subject to terms of service agreements, and might have automatic transfer rules. They might become inaccessible if not properly managed. These differences require specific planning approaches.
Types of digital assets
Financial digital assets
These have direct monetary value and typically need the most careful planning:
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Cryptocurrency: Bitcoin, Ethereum, and other cryptocurrencies represent significant value for some Canadians. These are stored in digital wallets requiring private keys or seed phrases.
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Online banking and investments: Bank accounts, brokerage accounts, and other financial accounts accessed online.
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Payment platforms: PayPal, Stripe, and similar accounts with balances.
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Loyalty points: Air miles, hotel points, credit card rewards, and other loyalty program value.
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Domain names: Website domains can have resale value.
Personal digital assets
These have value beyond monetary considerations:
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Email accounts: Contain correspondence, documents, and access to other accounts.
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Social media accounts: Facebook, Instagram, Twitter, and other platforms where you maintain presence.
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Cloud storage: Files stored on Google Drive, Dropbox, iCloud, and similar services.
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Digital photos and videos: Collections of family memories stored digitally.
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Online subscriptions: Subscriptions to services like streaming platforms, software, and publications.
Business digital assets
If you operate a business, digital assets might include:
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Business websites: The website itself and associated domains.
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Business email accounts: Corporate email systems.
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Customer databases: Customer information stored online.
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SaaS subscriptions: Business software subscriptions.
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Online stores: E-commerce platforms and inventory systems.
Why digital asset planning matters
Value protection
Digital assets often have significant value—cryptocurrency portfolios have reached millions of dollars. Without proper planning, this value can be lost entirely. Unclaimed digital assets might be inaccessible after death.
Sentimental preservation
Family photos stored only online might be lost without planning. Email accounts contain correspondence with sentimental value. These assets have value beyond money—protecting them protects family memories.
Access continuity
For business owners, digital assets need to be accessible to continue operations. Without proper planning, business activities might be disrupted by an owner's death or incapacity.
Privacy and security
Digital assets raise privacy and security issues. Personal information should be protected, but accessible to those who need it. Proper planning balances security with accessibility.
Challenges with digital assets
Terms of service limitations
Most digital platforms have terms of service that restrict account transfer. Many explicitly state accounts are non-transferable—they can't be inherited. This limits what you can accomplish through estate planning.
These restrictions don't mean planning is pointless. You can still ensure your executor knows about accounts and can attempt to access them. Some platforms have processes for deceased users' accounts.
Password and access management
Digital assets require passwords and access credentials. Without these, even obvious assets become inaccessible. Password management becomes crucial—but storing passwords creates security risks.
Rapid changes
Digital platforms change frequently. Features, interfaces, and policies change. What was true last year might not be true now. Ongoing attention is required.
Jurisdiction issues
Some digital platforms are based outside Canada. This creates additional complexity regarding which laws apply. Generally, Canadian courts can order access to accounts held by companies operating in Canada—but this might not help with offshore platforms.
Including digital assets in your estate plan
Inventory your digital assets
Create a comprehensive list of your digital assets and their value. Include account information, what the account contains, and any relevant details. Update this inventory regularly as your digital presence changes.
This inventory becomes crucial for your executor. It tells them what accounts exist and what needs attention. Store this inventory securely but make it accessible to your executor.
Provide access information
Your executor needs access information for digital assets. Options include:
- Password manager with access for executor
- Written list in your estate documents
- Instructions in your will
- Digital legacy services
Balance security with accessibility. Don't store passwords in ways that make them impossible to find, but also don't store them in ways that anyone can access.
Include digital assets in your will
Your will should address digital assets. While specific account details might change, general provisions help your executor understand your intentions. You might direct your executor to access certain assets, delete others, or transfer specific items.
Wills generally can't override terms of service restrictions, but they provide your executor with authority to attempt access and manage what they can. This is better than providing no direction at all.
Consider specific bequests
You can make specific bequests of certain digital assets. "All my cryptocurrency in wallet X to my daughter" works—if the assets are accessible. While not guaranteed to succeed, specific directions help your executor understand your wishes.
Use transfer-on-death designations
Some platforms allow transfer-on-death or beneficiary designations. Check what your platforms offer. Where available, these provide the smoothest transfer path—similar to RRSP or TFSA beneficiary designations.
Managing passwords and access
Password managers
Password managers like 1Password, LastPass, or Bitwarden store credentials securely. You can provide your executor access to the password vault, giving them access to all accounts. This is secure and comprehensive.
Many password managers allow emergency access provisions. Set these up so your executor can access the vault if something happens to you. This ensures someone can get in when needed.
Written records
Some people maintain written records of important passwords. Store these securely—perhaps in a safe or with your lawyer. Provide instructions in your estate planning documents about where to find these records.
Legacy services
Some platforms have legacy or deceased user processes. Google, Facebook, and others have processes for managing accounts of deceased users. Learn what options exist for your important accounts.
Digital estate managers
Services like Cake, Deathswitch, and others provide digital estate management. They store information and provide it to designated people when triggered by death. These services might be worth considering for complex digital lives.
Legal considerations in Canada
Canadian law hasn't fully addressed all digital asset issues. However, several principles apply:
Fiduciary access: Courts have recognized that executors have authority over deceased persons' property, including digital assets. While terms of service might restrict transfer, executors can attempt access.
Privacy considerations: PIPEDA (Personal Information Protection and Electronic Documents Act) affects how companies handle deceased users' personal information. Generally, companies can share information with legal representatives.
Fraud protection: Banks and platforms have fraud protection obligations. Even with proper authority, accessing accounts might require additional verification. This protects against fraud but can complicate legitimate access.
No specific legislation: Canada hasn't enacted comprehensive digital asset legislation like some US states. This creates uncertainty but doesn't prevent reasonable planning.
Working with digital assets after death
Step-by-step process
After death, digital assets need attention:
- Identify all digital assets using inventory and other records
- Contact relevant platforms to report death and seek access
- Gather required documentation (death certificate, court documents)
- Access accounts where possible
- Transfer or close accounts according to your directions
- Preserve value while managing costs
- Document everything for estate accounting
Professional help
Consider professional help for significant digital assets. Digital estate specialists, lawyers familiar with digital assets, or specialized services can navigate complex situations. The cost might be worthwhile for valuable assets.
Closing vs. transferring
Some assets will transfer; others need closing. Consider what makes sense for each asset. Cryptocurrency might need to be transferred; subscription services should probably be cancelled; social media accounts might be memorialized or deleted.
Digital assets require attention in modern estate planning. Their unique nature creates challenges, but thoughtful planning ensures nothing important is lost. Inventory your digital assets, provide access information, and include digital asset directions in your estate plan.