Do I Own Digital Assets? You Own More Than You Think.

While the mention of a Digital Asset immediately turns your mind to the world of cryptocurrency, you might be surprised to see what is covered under the umbrella of digital assets.

Before you explore further how we might account for the presence of these digital assets in your Will and overall estate plan, we want to discuss what exactly is (and isn’t) a Digital Asset and how they may be treated upon death under the present state of the law in Alberta.

In Alberta, there is currently no legal definition of what a Digital Asset is. However, by looking at several well-respected legal resources, we can find a clear starting point.

The Society of Trust and Estate Practitioners Canada, also known as STEP Canada, is a community of nearly 3,900 trust and estate professionals dedicated to helping families and individuals plan for their futures. They define a Digital Assets as:

“…anything in digital format to which a value can be attributed.   As with other types of physical assets or possessions, this value can be either financial, sentimental or a combination of both.”

Interestingly, there are only four jurisdictions in Canada that currently have any legislation that deals explicitly and thoroughly with Digital Assets (Saskatchewan, PEI, New Brunswick and the Yukon). The proposed future legislation in Alberta uses the following as a definition for a Digital Asset:

“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.”

Looking at these definitions together, a list of the common types of digital assets would include the following:

• Bitcoin, Ethereum, XRP or other cryptocurrencies

• NFTs (non-fungible tokens)

• Digital media and entertainment collections

• Social media accounts (Instagram, Facebook, TikTok)

• Online businesses

• Online shop accounts (such as Etsy, Amazon, or Shopify)

• Customer loyalty programs

• Points, travel points, and credit card rewards

• And more

Digital Assets, including items in the list above and others, generally fall into one of three categories:

1. Personal Digital Property – photographs, videos, content of social media accounts, content on hard drives, digital music files, e-readers, digital cameras, etc.

2. Personal Digital Assets having monetary value – cryptocurrency, bank accounts, rewards points, travel points

3. Digital Business Property – this would primarily entail websites and online platforms, software and applications used in business, digital images and video used in marketing and branding, client data and information, and intellectual property owned by one’s employer.

When it comes to Wills and Estate considerations, we are primarily concerned with Digital Assets that would fall under one of the first two categories. However, if you run a personal business, digital assets owned by your business should also be considered for estate planning purposes.

The Calgary Legal Team has professionals who are proud members of STEP Canada and have the specialized knowledge needed to advise you in navigating these emerging and complex considerations. We are always happy to speak with you to discuss protecting both your non-digital and digital estate.

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