Digital assets have become part of everyday life for many Albertans. Alongside traditional bank accounts and investments, people now hold Bitcoin, Ethereum and other cryptocurrencies, as well as digital wallets, online accounts and non-traditional investment platforms. These assets can have considerable value. If they are not addressed properly in your estate plan, they may become impossible for your loved ones to access.
Alberta’s Wills and Succession Act sets out the framework for how most property is distributed on death, but it does not yet speak in detail about cryptocurrency. Planning ahead is therefore especially important. An Edmonton wills and estates lawyer can help you integrate digital currency into your broader estate plan.
Are Cryptocurrency And Digital Assets Considered Part Of Your Estate?
In most cases, cryptocurrency that you own will form part of your estate and can be gifted or distributed through your will. This may include holdings on Canadian or international exchanges, coins or tokens stored on hardware wallets, and digital assets that are controlled by private keys. Some online accounts and reward programs may also have value that can be passed on, depending on the terms of service and local law.
The challenge is that digital assets are often governed by contracts between the user and the service provider. Privacy rules and user agreements can limit what your executor can access, even with a proper grant of probate. Research by the Alberta Law Reform Institute has shown that families frequently struggle to deal with online accounts, cloud storage and digital property after a death, particularly where passwords and instructions are incomplete.
Laws And Duties Relating To Digital Assets in Alberta
Alberta’s estate laws are gradually evolving to respond to digital property. The Estate Administration Act and related guidance now make it clear that personal representatives are responsible for identifying and gathering online accounts as part of their duties, alongside more traditional assets. At the same time, service providers and financial institutions are cautious about granting access where documentation is unclear.
Because of these overlapping rules, thoughtful planning often involves more than simply mentioning “digital assets” in a will. It usually requires a coordinated approach that includes your will, your enduring power of attorney and practical steps to ensure that the right people can access the information they need, without compromising your security while you are alive.
The Unique Risks of Passing Down Cryptocurrency
Cryptocurrency presents a few risks that differ from ordinary bank accounts. If private keys, seed phrases or multi-factor authentication details are lost, there may be no realistic way to recover the funds. Security measures that work well during your lifetime, such as complex passwords and cold storage devices, can become barriers for your executor if there is no plan for how they will gain access.
The value of digital currencies can also be highly volatile. Sudden market changes may affect the size of gifts in your will, the tax consequences for your estate and the options available to your executor. In addition, some exchanges have specific procedures for dealing with deceased account holders, and these procedures may be slow or require detailed documentation.
Strategies For Including Cryptocurrency In Your Estate Plan
A careful plan can reduce the risk that your digital wealth is lost:
- You may choose to update your will to refer specifically to digital assets and give your personal representative clear authority to manage them
- Create a separate digital asset memorandum that lists exchanges and wallet locations without revealing private keys
- Store passwords and seed phrases securely using a password manager or physical record, together with instructions on how your executor will gain access
- Consider whether significant holdings should be transferred into a trust or corporation as part of a broader tax and succession strategy
- Align your plan for digital currency with your enduring power of attorney so that someone you trust can manage these assets if you become incapable
The right approach depends on the type and value of the cryptocurrency you hold, the way it is stored and your overall financial and family situation. For some people, simple instructions and modest holdings are sufficient. For others, particularly where there are larger or business-related positions, a more structured solution may be preferred.
Choosing And Supporting Your Personal Representative
Administering an estate that holds digital assets can be demanding. Not every executor will be comfortable dealing with cryptocurrency or specialized exchanges. When naming a personal representative, you may wish to consider the person’s familiarity with technology, their willingness to seek professional advice and the complexity of your holdings. In some situations, it may be appropriate to name a professional co-executor or corporate trustee.
You can also support your executor by preparing clear written guidance, keeping an up-to-date inventory of your wallets and accounts, and indicating where key information is stored. Some people identify a trusted “digital helper” who can assist with technical matters, while legal authority remains with the formal personal representative. Resources such as Verhaeghe Law’s article on including digital assets in your will can be a useful introduction, but they do not replace personalized advice.
How Our Edmonton Wills And Estates Lawyer Can Help With Digital Asset Division in Alberta
Thoughtful estate planning can help ensure that your cryptocurrency benefits your chosen beneficiaries rather than being locked away forever. An Edmonton wills and estates lawyer can help you take stock of your digital and traditional assets, explain how Alberta succession laws apply, and prepare or update your will, enduring power of attorney and related documents with digital issues in mind. Coordinating with your tax and financial advisors can also help manage risk and compliance, particularly if your holdings are substantial.
At Verhaeghe Law, we assist clients in Edmonton, Athabasca and Whitecourt with modern estate planning that reflects both traditional and digital forms of wealth. To discuss how to pass down digital currency and other assets in Alberta, contact us through our online form or call (587) 410-2500 to book a consultation.
Please note that the information in this article does not constitute legal advice. It is intended as a general overview of an area of wills and estates law. For legal advice, please consult with a lawyer.