Providing for your virtual assets in your digital estate after your death

It’s the year 2015 and the majority of our world today live digitally through online social media platforms, gaming environments, websites, chat rooms, shopping sites and more. The growth of our digital world however gives rise to new legal questions relating to your digital ‘assets’. Digital assets include all your online accounts and hard storage devices that contain data which can be both personal and financial.  Online accounts include social networking, email, cloud storage, financial accounts, digital music libraries, e-book collections, domain names, online photo galleries and so much more, stored on an array of digital platforms.

What will happen to these digital assets upon your death? The reality is that these digital assets also need administering and what happens to it after you’ve passed away may in fact, be up to you, and may be something that can be provided for when preparing your will.

The definition and purpose of a will must be considered in the determination of providing for virtual assets, a will is a document that, amongst other things, provides for the orderly distribution of your property after your death and appoints an executor to carry out this distribution, this is essential in order to simplify matters following your death and to ensure that your property passes to those whom you wish to benefit.

When most people have their wills prepared, they often only consider their tangible property, but little, if any, consideration is given to their intangible assets, such as intellectual property or digital assets.  For example, you may want to consider granting someone access to your Facebook account after you pass away in order to close out your Facebook account or carry out other specific instructions.

Property, in this context, includes all of a person’s assets, including digital assets.  The digital assets that one might transfer in their will might include email accounts, digital music, digital photographs, digital videos, social networking accounts, file sharing accounts, and any other type of digital assets on an array of digital platforms.

South African legislators have yet to attempt to classify what would comprise digital assets and as a result, digital inheritance remains largely undeveloped, this does however not mean that digital assets should be overlooked in the administration of wills and estates. In the USA, five states already have draft legislation in place to introduce the regulation of digital assets and the rest of the world will soon have to catch on, South Africa included.

Digital assets are becoming a material part of who we are and what our asset base is, and therefore a few aspects of estate planning and estate administration should be considered to ensure the validity of the entire process and to protect the sensitive nature of provided information.

 

There are several issues that are relevant to the disposition of digital assets, including but are not limited to:

  1. ownership; and
  2. access and control.

 

  1. Ownership of digital assets

An important issue related to digital assets is the ownership of digital assets.  For example, if one purchases a digital copy of a movie, does that grant the purchaser actual ownership over a copy of the media, similar to analog media purchases, or alternatively, mere permission to watch / read / listen to the media whenever the purchaser wants?  We’ll have to leave this question for the courts to decide.

Also important in answering the ownership question is the Use Agreement entered into between the deceased and the service provider.  Depending on the content of the Use Agreement, it might very well be the case that the deceased does not have ownership rights over these assets.  If this is the case, the deceased would not have the right to transfer ownership of the digital assets.  The Terms of Service for many internet account service providers, such as Facebook, claim that the service provider own the rights to virtually everything its users post on the service providers website.
Ownership of digital assets is therefore only practical where those who are to have ownership and control also have the ability to access these digital assets.

 

  1. Access to and control of digital assets

In addition to dealing with the transfer of digital assets, when preparing a will, you should consider the issue of access to digital assets and the right to manipulate such assets
Digital assets are an important part of your estate and need to be considered carefully when having your will prepared or when considering your estate planning.  Otherwise, not only will you stand to lose financial digital assets, but also digital assets that carry sentimental value.  During the estate planning process clients take account of their tangible assets and turn their minds to which they would like their tangible assets to be passed, the same attention and consideration ought to be paid to intangible assets.

Estate planning must keep pace and evolve into the digital age.  These days, estate planning involves much more than simply deciding who gets our house and our cats.  It’s a fact that most of us have a significant online presence and that this presence is growing.

In terms of legislation each person is entitled to freedom of testation and although legislation does not expressly address how and when to provide for your digital assets in your will, it’s prudent to reflect on, and provide specific instructions in respect of, these issues during the estate planning process.

 

by

Dominique Klopper
dominique@dyason.co.za