Tag: Digital Estates

15 May

Alberta’s Approach to Digital Assets

Nick Esterbauer Estate Planning, Executors and Trustees, Power of Attorney, Trustees Tags: , , , , , , , , , , , , , , , , , , , 0 Comments

Our firm has previously blogged and podcasted at length about digital assets and estate planning, and the issue of fiduciary access to digital assets during incapacity and after death.

While digital assets constitute “property” in the sense appearing within provincial legislation, the rights of fiduciaries in respect of these assets are less clear than those relating to tangible assets.  For example, in Ontario, the Substitute Decisions Act, 1992, and Estates Administration Act provide that attorneys or guardians of property and estate trustees, respectively, are authorized to manage the property of an incapable person or estate, but these pieces of legislation do not explicitly refer to digital assets.

As we have previously reported, although the Uniform Law Conference of Canada introduced the Uniform Access to Digital Assets by Fiduciaries Act in August 2016, the uniform legislation has yet to be adopted by the provinces of Canada.  However, recent legislative amendment in one of Ontario’s neighbours to the west has recently enhanced the ability of estate trustees to access and administer digital assets.

In Alberta, legislation has been updated to clarify that the authority of an estate trustee extends to digital assets.  Alberta’s Estate Administration Act makes specific reference to “online accounts” within the context of an estate trustee’s duty to identify estate assets and liabilities, providing clarification that digital assets are intended to be included within the scope of estate assets that a trustee is authorized to administer.

In other Canadian provinces, fiduciaries continue to face barriers in attempting to access digital assets.  Until the law is updated to reflect the prevalence of technology and value, whether financial or sentimental, of information stored electronically, it may be prudent for drafting solicitors whose clients possess such assets to include specific provisions within Powers of Attorney for Property and Wills to clarify the authority of fiduciaries to deal with digital assets.

Thank you for reading.

Nick Esterbauer

 

Other blog posts that may be of interest:

06 Apr

Comparing Canadian and American Digital Asset Legislation

Nick Esterbauer Executors and Trustees, General Interest, Guardianship, Power of Attorney, Trustees Tags: , , , , , , , , , , 0 Comments

Canada’s model legislation regarding digital assets, the Uniform Access to Digital Assets by Fiduciaries Act (the “Canadian Model Act”), was introduced in August 2016, and borrows heavily from its American predecessor, the Revised Uniform Fiduciary Access to Digital Assets Act (the “American Model Act”).

The Canadian Model Act defines a “digital asset” as “a record that is created, recorded, transmitted or stored in digital or other intangible form by electronic, magnetic or optical means or by any other similar means.” As with the definition appearing within the American Model Act, this definition does not include title to an underlying asset, such as securities as digital assets. Unlike the American Model Act, the Canadian Model Act does not define the terms “information” or “record.”

In the Canadian Model Act, the term “fiduciary” is also defined similarly as in the American Model Act, restricting the application of both pieces of model legislation to four kinds of fiduciary: personal representatives, guardians, attorneys appointed under a Power of Attorney for Property, and trustees appointed to hold a digital asset in trust.

One challenge that both pieces of model legislation attempt to address is the delicate balance between the competing rights to access and privacy.  The American Model Act is somewhat longer in this regard, as it addresses provisions of American privacy legislation to which there is no equivalent in Canada.  Canadian law does not treat fiduciary access to digital assets as a “disclosure” of personal information.  Accordingly, under Canadian law, the impact on privacy legislation by fiduciary access to digital assets is relatively limited.

The Canadian Model Act provides a more robust right of access to fiduciaries. Unlike the American Model Act, the Canadian Model Act does not authorize custodians of digital assets to choose the fiduciary’s level of access to the digital asset.  Section 3 of the Canadian Model Act states that a fiduciary’s right of access is subject instead to the terms of the instrument appointing the fiduciary, being the Power of Attorney for Property, Last Will and Testament, or Court Order.

Unlike the American Model Act, the Canadian equivalent has a “last-in-time” priority system. The most recent instruction concerning the fiduciary’s right to access a digital asset takes priority over any earlier instrument. For example, an account holder with a pre-existing Last Will and Testament, who chooses to appoint a Facebook legacy contact is restricting their executor’s right to access their Facebook account after death pursuant to the Will.

Despite their differences, both pieces of model legislation serve the same purpose of facilitating access by attorneys for or guardians of property and estate trustees to digital assets and information held by individuals who are incapable or deceased and represent steps in the right direction in terms of updating estate and incapacity law to reflect the prevalence of digital assets in the modern world.

Thank you for reading,

Nick Esterbauer

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET