The rise of digital currency has raised many questions in the financial and legal world. One common discussion involves estate planning and estate administration. How can digital assets, including cryptocurrencies, be transferred in the case of someone’s death? Ontario planners and executors alike have many questions about the process of distributing digital assets of an estate.
One controversial piece of advice for planners is to record all accounts and passwords and to store it somewhere safe. While some are concerned this could pose a serious threat should the list be found, others suggest that there are secure ways to save this information. In any case, knowing passwords for centalized systems can be the only way for an executor to access certain digital assets, including loyalty points and cryptocurrency.
When a person dies, he or she may be more vulnerable to attacks on his or her accounts. Anyone who might know a person’s passwords, such as children, friends or former spouses, could potentially get into accounts before the executor has a chance. For this reason, it is important that executors are clearly instructed to move assets and delete accounts swiftly upon a person’s death and that passwords are changed from time to time to avoid people having them who should not.
There are many questions yet be answered regarding how cryptocurrency and digital assets will be handled under Ontario estate law. For now, the best way to ease estate administration is with a thorough list of all accounts and their associated passwords. Working with a lawyer to understand what instructions are needed and how to follow them is also important for each stage of estate planning and estate administration.