By Stella Varvis
August 7th, 2024
Learn why fiduciary access to digital assets matters and how a new Alberta Act would help facilitate access
More and more Canadians are engaged in online activities like sending and receiving emails and texts, storing photos and videos, posting on social media sites, collecting points through various loyalty programs, and trading in cryptocurrency. Given all this online activity, there’s a real question about who should be able to access these electronic records – known as digital assets – when the original account holder dies or becomes incapacitated.
To help answer this question, the Alberta Law Reform Institute (ALRI) considered whether the Uniform Access to Digital Assets by Fiduciaries Act (the Uniform Act) ought to be enacted in Alberta.
Imagine that a loved one has recently passed away and you are the personal representative with the responsibility of dealing with their estate. One of your tasks as a personal representative is to take an inventory of assets, which means that you need to find out what they owned and where it can be located. Taking an inventory of estate assets can often involve a little detective work: for example, going through your loved one’s home to look for any receipts, papers, or documents related to their assets, or monitoring their mailbox for bank statements, bills, insurance policies, tax assessments, and loyalty membership information. If you can access the physical contents of your loved one’s home and mailbox, you could likely piece together an inventory of estate assets and where to find them, which in turn would help you fulfil your legal obligations as the personal representative for the estate.
Now imagine that your loved one stored all that much-needed information in electronic form only. Instead of going through closets and drawers, you will need to go through computers and smart phones. Instead of monitoring a physical mailbox, you will need to monitor email accounts.
As the personal representative, you have the legal authority to access these digital assets to effectively and efficiently administer the estate.
Yet it is possible that the custodian of the digital asset – which includes online service providers as well as any other person who holds, maintains, processes, receives, or stores electronic data of the account holder – will refuse to provide you with the login and password information to these assets because of restrictive service agreements that limit third-party access.
Even if your loved one wrote down their passwords and login credentials in a place you could easily find, many service agreements restrict account holders from sharing their access information with anyone else. If the custodian discovers that someone other than the account holder is using the login information without the custodian’s permission, they might block access to the account entirely. When access is blocked, how can a personal representative fulfil their fiduciary obligations to properly deal with the estate?
ALRI’s recommendations in Final Report 121 are intended to address the difficulties that might arise when a fiduciary tries to access the digital assets of a person who has died or is incapacitated. Specifically, ALRI recommends enacting a new Alberta Act that confirms the fiduciary’s authority to deal with the digital assets even in the face of restrictive service agreements.
A new Alberta Act would confirm that the fiduciary can essentially “step into the shoes” of the original account holder – meaning that the fiduciary is treated as an authorized user of the digital asset for the purposes of estate administration.
A new Alberta Act confirming fiduciary access to digital assets would help clarify the law, produce predictable results, improve recognition by extra-jurisdictional custodians, and promote the efficient and effective administration of estates. More importantly, new legislation would help make it easier for fiduciaries including personal representatives, trustees, guardians, agents, and attorneys, to manage the estates of their loved ones.
