While there are clear rules for what happens to unclaimed amounts in traditional accounts, cryptos and other digital assets are riskier
When the main holder of household wealth dies, the last thing dependent loved ones need is to worry about is remaining financially secure.
Having clear and robust estate planning in place is critical, but cryptos and other digital assets may be making this more challenging, due to less-well-known access routes and the requirement of passwords or other digital security keys to gain access.
According to digital legacy planning firm DGLegacy this is a big concern among the 10,000 users of its service: 89% worry that if something happens to them, their families won't be able to identify and access their cryptocurrencies.
Loved ones may not know where the assets are stored or, frustratingly, will know where but not how to access sometimes significant fortunes.
"Seeing this global pandemic of abandoned financial accounts and lost money, it's not surprising that we're seeing a massive increase in interest in using digital legacy management services to protect people's financial assets,” said Ana Mineva, CEO of the firm which offers automatic detection of a fatal event and proactive sharing of the information about the assets with the designated beneficiaries.
Lost money in Canada
Lost access to cryptocurrencies was at the centre of the high-profile collapse of Canadian crypto exchange Quadriga CX in 2019.
The death of the exchange’s founder meant $200 million in assets were inaccessible and the recent news that payments to creditors will begin shortly revealed they will only receive 13% of their claim.
While this was an exceptional case, lost money in accounts is not rare.
Millions of dollars sit in Canadian bank accounts unclaimed including more than $190 million in BC and $478 million in Quebec.
While many of these accounts contain amounts of less than $500, some are significantly larger including a $1.9 million estate in BC.
"People lose track of their money for various reasons," said Sherry MacLennan, executive director of the BC Unclaimed Property Society. "People tend to move around a lot these days, change jobs frequently and may not leave a forwarding address or they simply forget to close an account. In many cases, they may not be aware that there are unclaimed funds owing to them such as with unclaimed inheritances, court payments or insurance payments."
Tracking down unclaimed cash
When cash is left unclaimed in a Canadian account for more than 10 years, financial institutions are required to transfer funds to the Bank of Canada – although this only applies to Canadian money.
The central bank will hold amounts of below $1,000 for 30 years while larger amounts are held for 100 years.
You can search for unclaimed amounts at https://www.unclaimedproperties.bankofcanada.ca/
