Virtual assets in your digital estate

Virtual assets in your digital estate

By Gunnar Dahl and Rinske Nel

The digital assets of an individual are his or her digitally stored content and online accounts, including:

–     virtual currencies, such as Bitcoin, and currency storage, eg in Bitcoin wallets;

–     financial accounts (Online Bank Accounts, Online Investment Accounts, PayPal);

–     cloud storage accounts (Google Drive, Apple iCloud, Dropbox);

–     online social media accounts (Facebook, Twitter, LinkedIn, Instagram);

–     digital photograph accounts (Shutterfly, Snapfish, Flickr);

–     online book, music, and video collections (Amazon, iTunes, YouTube); and

–     dating site accounts (Match, eHarmony).

In the USA, the Law Commission recommended to States to adopt legislation known as the Fiduciary Access to Digital Assets Act (FADAA), in order to protect the digital assets of a deceased person, and to regulate who has access to such assets once the life of the account holder ends.  Under FADAA, an individual can designate a fiduciary that is authorised to access his or her digital assets and computer devices.  In theory, the fiduciary has the same rights to the deceased individual’s digital assets as an executor of a deceased estate has to traditional (tangible) assets.

One of the primary goals of FADAA is to override privacy laws and the terms of service of online service providers, to the extent they prohibit fiduciary access.  Several states have passed FADAA, but implementation has generally stalled.  Internet Coalition, the trade association of the major internet and e-commerce corporations (including Amazon.com, Facebook, and Google) oppose FADAA.  However, as digital assets have become meaningful assets, we anticipate that over time FADAA will become the norm.

The current South African law of succession predates the existence of digital assets.  Obviously, legislation is required to regulate the inheritance of digital assets.  However, in South Africa, neither the Parliament nor the Law Reform Commission has given any attention to this matter.

We can draft a codicil to a testament to regulate the digital assets of an individual, but absent local supporting legislation that compels online service providers to cooperate, and that can be enforced in local Courts, such a codicil may not achieve full inheritance of digital assets.

Also in this issue:

Chairman’s Introduction

More quotes from Plato

Second bite at the cherry

An own goal

To pray or not to pray

The fish bone in the fish chowder