Estate Planning Essentials - Digital Assets

22 October 2019 in Articles

Stock Snap TIV258 VG3 N

Digital assets are now an everyday part of life for many of us. The December 2018 death (or purported death) of Gerald Cotton, former CEO of Canadian cryptocurrency exchange company, Quadriga CX, illustrated the importance of planning your electronic afterlife. Mr Cotton was the sole custodian of encrypted passwords ‘protecting’ over digital assets worth more than $200 million. Many of the digital assets referred to in the Quadriga saga were cryptocurrency (virtual currency created and stored electronically, such as Bitcoin, Litecoin, Ethereum etc.). The cryptocurrency system, also known as a 'blockchain', is decentralised and not subject to a governing authority, raising unique challenges in identifying and ‘locating’ the assets. The Quadriga saga is a timely reminder of how important it is to consider what we want to happen to our digital assets when we die.

What are digital assets?

A person’s ‘digital life’ may encompass a range of online transactions, activities and accounts such as:
  • cryptocurrency;
  • financial assets including online bank accounts and shares;
  • intellectual property attached to domain names or online literary works;
  • online sporting and gaming accounts;
  • loyalty programs such as Flybuys, Rewards, and Frequent Flyers;
  • online shopping accounts such as eBay and Amazon;
  • personal / business social media accounts such as Facebook, Instagram, Linked-In, etc.
Just like other assets (cash, houses, cars, etc.), you should consider what you want to do with your digital assets when you are speaking to your lawyer about preparing your estate plan.

Issues unique to certain digital assets

Traditional cash-based assets such as money in a bank account, shares or other paper-based investments are held by title to the owner and can be transferred to the beneficiary of a deceased person with the relevant documentation. Ownership of digital assets like Bitcoin, however, is anonymous with owners accessing their cryptocurrency with private keys which are used to unlock and deal with the assets. This information may be held on a computer device or USB drive (a digital 'wallet') or printed separately. These assets can easily be overlooked or the ‘keys’ misplaced, representing unique challenges when it comes to administering an estate. Many digital assets are also held globally (such as on a cryptocurrency exchange) and may, therefore, raise jurisdictional issues from an estate planning perspective. In most instances, there is no uniform legislation governing access to a deceased person’s online accounts, so it is important that these matters be specifically addressed in an estate plan. Following are some steps you can take to ensure your online life is appropriately dealt with when you are gone:
1. Identify your digital assets
You should start by making a list of your digital assets (including online accounts) and determining what you would like to happen to them when you die. Keep records of your online accounts and subscriptions including user names and passwords and store this information in a secure place. Remember your online accounts and login details are likely to change frequently and your list should be maintained accordingly.
2. Understand your online accounts
Understanding how various accounts are dealt with by service providers will help to determine the type of action you would like taken when you die. For example, Facebook account holders can advise in advance whether their account is to be deleted or memorialised. A memorialised account can provide a place for family and friends to share memories after a person dies on the deceased’s profile, and any content shared by the deceased person remains visible to those with whom it was shared. Nobody can log into a memorialised account. Some loyalty programs such as Frequent Flyers may not be transferrable or redeemable after a person dies, so it may be wise to keep tabs on these types of accounts to utilise benefits regularly.
3. Include digital assets in your Will and appoint a technology custodian
Your Will should define and identify important digital assets and provide executors and trustees with appropriate directions and powers to deal with them. You may want to assign your executor or other trusted person, who is familiar with technology, the role of managing your online life after you die. This direction may be included in your Will. Record your after-life technology instructions with respect to each account separately and ensure these instructions are secure but accessible to your technology custodian. Never disclose passwords in your Will.
4. Online maintenance
Online accounts contain personal information which should be protected. Technology presents a real risk of identity fraud and unmonitored accounts can be particularly vulnerable. Regular monitoring and unsubscribing or deleting unused accounts can help minimise risk and keep your online life tidy. Regularly downloading photos and videos from your mobile to a storage device can ensure that memories are accessible to your family when you die.
5. Consider incapacity
It is also important to consider what happens to your online life in the event that you are incapacitated. Appointing a trusted person to manage your online affairs and including specific instructions in an enduring power of attorney is a logical step to ensure the appropriate management of your digital wealth if you are incapacitated. The instrument making the appointment should be specific to the jurisdiction in which the assets are held, so more than one document may be required.
6. Consider trusts
It may also be beneficial to dispose of substantial digital assets through a testamentary trust, if possible, for greater protection and better taxation outcomes. In doing so, the trust must be considered and dealt with under the Will, which should nominate beneficiaries of the trust and include provisions to ensure the trust can achieve the desired objectives.


It has become increasingly difficult for executors and family members to ascertain and access online assets after a person dies, with many financial and other institutions operating in a ‘paperless’ environment. Certain digital assets such as cryptocurrency can present additional problems for a deceased person’s family. Inaccessible online accounts make it difficult to identify assets, and leaving online accounts open indefinitely raises concerns of potential identity theft. Good online management and ensuring your digital assets are included in your estate plan will help your executors and family manage your online life after you are gone. If you or someone you know wants more information or needs help or advice, please don't hesitate to contact us.