By Bobila Walker Law
January 4th, 2025
Crypto-asset disputes are an increasingly significant area of both Canadian and international law.
Cryptocurrencies can complicate estate matters, from valuation and access to legal jurisdiction and tax implications. Proper planning, including secure storage of private keys and clear instructions, is essential to ensure smooth distribution of digital assets and avoid potential complications for executors and beneficiaries.
Litigation in estate matters involving Bitcoin can be complex, as digital assets like Bitcoin require careful consideration of valuation, ownership, and access. Disputes may arise over missing private keys, unclear instructions in wills, or conflicting claims to cryptocurrency holdings. Executors and beneficiaries must navigate the evolving legal landscape of digital assets to ensure fair distribution, while addressing potential tax and jurisdictional issues.
As Bitcoin and cryptocurrencies continue to be integrated into the portfolios of individuals, corporations, trusts, and estates, it is essential for fiduciaries and civil litigants to understand how courts will address disputes over the ownership and management of these assets. Despite the increasing popularity of Bitcoin among investors and in the media, there remains a lack of case law on the subject in civil litigation, particularly in the context of estates and trusts.
Bobila Walker Law, Toronto
Due to the cross-border nature of many quasi-criminal or criminal activities associated with crypto frauds, jurisdictional challenges often complicate the use of traditional civil recovery methods in assisting alleged victims of crypto-related schemes. Recent rulings by English courts have found that the transfer of digital assets to wallets held in foreign jurisdictions presents control issues concerning service. Similarly, U.S. courts have a long-standing tendency to refrain from exercising jurisdiction to assist plaintiffs, citing concerns over the “location” of crypto-assets. These decisions are disappointing and create additional hurdles for those seeking recovery.
While many articles have explored the tax, securities, and estate planning implications of purchasing Bitcoin and other cryptocurrencies, this article specifically examines the issues faced by civil litigants and fiduciaries regarding these digital assets.
As the popularity of cryptocurrencies continues to rise, it’s essential for individuals to address these assets in their estate planning. Estate planners and executors must take proactive steps to ensure that crypto assets are properly accounted for and accessible. This includes safeguarding private keys, understanding the tax implications, and creating clear instructions for the distribution of digital assets. Without proper preparation, the value of cryptocurrency holdings could be lost or inaccessible, which may lead to disputes or financial difficulties for the estate and its beneficiaries.
Bobila Walker Law, Toronto
