How Do You Deal With a Deceased Person's Digital Assets in Ontario?

Email, social media, photo storage, online banking and cryptocurrency can all be left behind when someone dies. As executor, you may be unsure what you are allowed to open, close, keep or transfer, and how to avoid making a mistake that costs the estate.

This article explains the general approach in Ontario. Many digital accounts are governed by the provider's own terms, which differ from one company to the next, so a lawyer can confirm what applies to a particular account.

What counts as a digital asset

A digital asset is anything of value or importance that exists online or on a device. Some have clear money value, such as online investment accounts or cryptocurrency. Others matter mainly for sentimental or practical reasons, such as photos, email and social media profiles.

The type of asset matters. Accounts with money in them generally fit into the normal estate process. Accounts without money value often depend on the provider's terms and policies, and a lawyer can help you work out your options.

Start with your authority

Before you approach any provider, be clear that you are the person with authority to act. A person named in a will as estate trustee does not have to act. If they renounce, their rights in the executorship end and the estate passes as if they had never been appointed.

Renouncing is generally available only if the person has not yet been appointed by the court and has not taken steps to administer the estate. After that, stepping aside requires retirement or removal by court order. Where the deceased held assets with a financial institution, the estate normally has to be probated. What a particular provider will ask you to show depends on the provider and your situation, so it is worth confirming with a lawyer.

Digital assets that hold money

Treat online accounts with value like any other estate asset. Make a list, find out what each is worth, pay debts and expenses, and only then distribute. Under a will, the estate is normally distributed only after assets are liquidated and funeral and burial expenses and debts are paid.

On death, a taxpayer is deemed to have disposed of each capital property immediately before death at its fair market value. That deemed disposition is deferred where the property passes to a spouse or common-law partner resident in Canada, or to a qualifying trust created by the will. Whether a particular digital asset is capital property is a question for an accountant.

Legal limits and risks

• Do not log in using the deceased's password without first considering the provider's terms, as that may breach them.
• Do not pretend to be the deceased when dealing with a provider. Use your own authority.
• Do not delete anything that may be needed as a record, such as emails about debts, taxes or property.
• Do not distribute before taxes are dealt with. Before distributing property, a legal representative must obtain a clearance certificate (Form TX19), and distributing without one makes the representative personally liable for unpaid tax up to the value of the property distributed, although you do not need a certificate before each interim distribution as long as you keep enough property to pay any liability to the CRA.

If something goes wrong despite your honest efforts, the court may relieve a trustee wholly or partly from personal liability if they acted honestly and reasonably and ought fairly to be excused.

What to do next

• Find the will and confirm you are the named estate trustee, or get advice on applying.
• Make a list of devices, email addresses and accounts, using mail, statements and phone records as clues.
• Secure devices and keep them safe without changing or wiping them.
• Contact each provider and ask what it needs from an estate trustee.
• Keep a written record of every step and every account.
• Speak with a lawyer about account access and an accountant about tax.

Good records also protect you. No Ontario law requires an estate trustee to pass accounts at fixed intervals, but the court can compel it at the request of a person with an interest, such as a beneficiary or creditor.

Frequently asked questions