By Leandri Spies, Fiduciary Regional Head
In today's digital age, the concept of wealth extends beyond physical possessions. With the advent of digital technology, individuals accumulate significant digital assets throughout their lives. However, when the owner of these assets passes away, the management and distribution of these assets become complex tasks for the executor.
Digital assets encompass a wide range of intangible possessions, including but not limited to:
Financial assets:
Cryptocurrencies, online banking accounts, investment portfolios, and digital payment platforms.
Intellectual property:
Copyrights, patents, trademarks, and digital content (e.g. e-books, music, and videos).
Personal digital property:
Emails, social media accounts, cloud storage, digital photographs, and personal blogs.
Domain names and websites:
Ownership rights and associated intellectual property.
Gaming and virtual assets:
In-game items, virtual currencies, and online gaming accounts.
The rise of digital assets presents unique challenges within the context of deceased estates. The first challenge is the identification, confirmation and valuation of these assets. Executors must identify and assess the extent and value of digital assets, which may require a personal inventory, together with technical expertise and legal guidance where the information is not readily available or difficult to access. Accurately identifying and valuating the digital assets are crucial for estate administration and equitable distribution among beneficiaries. Considering the possible increase in the value of estate and the effect thereof on taxes and other costs, complicates the estate administration process.
The second hurdle executors face is the challenge of accessing password-protected digital accounts, together with the security of the deceased's digital footprint. Balancing privacy concerns and the need for authorized access can be legally and technically intricate. South African legislation does not explicitly address digital assets within the context of deceased estates, leaving room for ambiguity, variance in interpretation and various potential conflicts. Executors are therefore faced with navigating legal complexities to ensure compliance and protect the interests of the estate and its ultimate beneficiaries.
Key take-away
The absence of clear instructions regarding digital assets can complicate, delay and burden the administration process.
When holding digital assets:
Continuous professional development can enhance the understanding of digital estate management. Individuals should proactively incorporate digital assets into their estate planning exercise.
FNB's NAV Vault on the App, provides a secure and manageable data and document storage option.
