Digital assets comprise virtual assets held or kept at online and compute based systems, applications, and even software that can only be accessed and managed through access and use of internet by the owner alone.
The internet, and technology has enabled people to accumulate wealth and other financial resources, which is seldom maintained on a portfolio, or easily available for access, and administration in case of death of the virtual asset(s) owners.
A good example is crypto-currencies, and web-based cash wallets. While a good number of people venture into a variety of online activities that potentially earn them monetary income, as well as other resources that can be redeemed, liquidated or valued to in form of money, the challenge which will increasingly become a topic for consideration is how can such assets be administered in case of death of the asset(s) owner.
Traditionally, the assets or liabilities catalogue of any person, and which is subject to succession laws and processes has been limited to Land, Machinery, cash, livestock, and generally movable and immovable properties left behind. Far and beyond these tangible assets, the statutory laws, especially have not been expanded to foresee these situations, and therefore enable proper access and administration of these assets.
How Digital wealth come about;
Digital wealth, assets and wallets come about through various ways, including;
- Diaspora income, where different organizations have various ways of remitting wages or salaries,
- Access to foreign markets and products, and use of different currencies to trade,
- Forex trading,
- Purchase and maintenance of crypto-currencies, and their related accounts,
- Online projects and assignments with monetary compensation through international payments methods like PayPal, Payoneer, etc.
- YouTube income for qualified users,
In all the listed scenarios, it’s possible that such accrued virtual assets may not be accessed or collected by the administrators and or beneficiaries after death, and worse still, they may easily be stolen by through internet hacking, or outright access, and misuse by the online site hosts or administrators.
Challenges posed to Administration of estates:
Several challenges can be appreciated by the modern era where virtual assets are becoming very common, in cases where the owner fails to identify them and make prior, proper plans enabling their access and control by their next of kins.
- Collection to make them available for purposes of succession proceedings in court under probate and administration rules, because these assets are deemed as ‘exclusively the property of the founding owner, even where they have died.
- The territorial jurisdictions i.e. under whose law should the virtual assets be governed,
- How the virtual assets should be subjected to taxation, if applicable, and finally,
- Does issues of intermeddling arise, as it is the case for other physical assets, and therefore can there be any remedies to the beneficiaries in case of loss as contemplated in this article e.g. through theft and illegal transfers’ through hacking or outright misuse by online account administrators.
There is need to create awareness on how these virtual fortunes need be handled in any economy. Statistics reveal that annual diaspora remittances account for almost 10% of the GDP in many third world countries and therefore the focus should shift to harnessing this lose and fluid, yet fast growing industry.
There should also be appropriate amendments to the succession Act, and rules made thereunder to enable practitioners and the courts to appreciate this emerging challenge that is going to face us in the few coming years. This way, we shall be well prepared to avail all assets to the beneficiaries for distribution upon conclusion of succession processes.
In Part B of this legal brief, we make informative suggestions and proposals on how you can plan prior to death (God forbid) for all your assets including those virtual assets that you deem or know to be valuable!
This summary consists a commentary from the Author on the topic. The same does not comprise a legal advice, and therefore any loss or exposure that may be occasioned to anyone as a result of reliance on it, without legal counsel, shall not be admitted at all.
If anyone want guidance on the topic he/she should contact the office or the author for consultation and advice.