CANADA Law and Practice Contributed by: Ian M Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
and when service providers are shielded from liability for complying with the legislation. However, the leg- islation does not appear to extend to digital assets held directly by the account holder, such as crypto- currency. Elsewhere in Canada, comparable legislation has not been enacted. In Alberta, however, the Estate Adminis- tration Act, SA 2014 c E-12.5, authorises estate repre- sentatives to do anything in relation to the deceased’s property that the deceased could do if alive and of full capacity, and the legislation expressly includes online accounts within the scope of estate property. In most Canadian jurisdictions, the custodians of digi- tal assets – such as Apple, Google, and social media platforms – are not required to grant estate repre- sentatives access to a deceased account-holder’s accounts, even where probate has been obtained. Access is instead usually governed by the platform’s terms of the service agreement, potentially requiring fiduciaries to pursue litigation to obtain access to the account-holder’s digital assets. Even in jurisdictions with digital assets legislation, court orders may still be necessary, given that custo- dians subject to the US Stored Communications Act (SCA), 18 U.S.C. §§ 2701–2713 cannot disclose the contents of an account without the account-holder’s consent, regardless of Canadian legislation granting fiduciary access. The interaction between the SCA and Canadian succession law has not yet been con- sidered by Canadian courts. 7.2 Planning Considerations At this time, effective estate planning for digital assets in Canada generally requires an asset-by-asset approach. Although testamentary instruments may address the disposition of digital assets, additional steps will likely be necessary to ensure that estate representatives can access them after death. Digital custodians may not recognise a grant of probate as sufficient authority to access a deceased account- holder’s account. Account holders can mitigate this risk by using “legacy tools” offered by digital service providers to authorise their estate representatives or other designated persons to access their accounts after death. Where available, a legacy contact should
be designated for each digital asset in accordance with the applicable service agreement. In Canada, legal reform in this area has been rec- ommended by both the Uniform Law Conference of Canada (ULCC) and the Alberta Law Reform Institute (ALRI). In 2016, the ULCC adopted model legislation, the Uniform Access to Digital Assets by Fiduciaries Act, which would grant fiduciaries default authority to access digital assets belonging to a deceased or incapacitated person. Versions of this legislation have since been adopted, with modifications, in Saskatch- ewan, Prince Edward Island, New Brunswick and the Yukon. In 2024, ALRI published its final report, Access to Digital Assets, recommending modifications to the ULCC model legislation. However, Alberta has not yet enacted legislation granting fiduciaries express statu- tory authority to access digital assets. Family business succession planning in Canada var- ies depending on the business structure. The three principal forms are sole proprietorships, partnerships and corporations. Sole Proprietorships There is no legal distinction between the owner and the business with sole proprietorships, which gener- ally simplifies succession planning. Through a will, the owner may leave the business to beneficiaries, direct the executor to wind up or sell the business, or grant a beneficiary an option to purchase it or a right of first refusal. Alternatively, a buyout may be arranged before the proprietor’s death; if implemented gradually, a buyout may also have reduced tax consequences. Insurance may also play an important role in succes- sion planning and asset protection. Life or disability insurance can fund business liabilities, including tax liabilities, in the event of the owner’s incapacity or 8. Family Business Succession Planning 8.1 Succession Strategies
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