What Happens to Your Digital Assets When You Die in South Africa?

Estate planning traditionally brings to mind property, bank accounts, investments and other physical or financial assets.
But much of modern life now exists online.
Email accounts, cloud storage, photographs, social media profiles, websites, domain names, subscriptions and crypto assets can all form part of a person’s digital footprint.
When someone dies, these do not necessarily disappear. However, not everything digital is treated in the same way, and knowing that an account exists does not automatically give a family member or Executor the right or ability to access it.

What are digital assets?

“Digital assets” is a broad description rather than one single category of property under South African deceased-estate law.

Depending on the circumstances, a person’s digital affairs might include:

• crypto assets;
• websites and domain names;
• monetised online businesses or content;
• digital photographs and documents;
• cloud-storage accounts;
• email accounts;
• social media profiles;
• online banking and investment access;
• subscription services; and
• other electronically stored information or rights.

Some of these may have financial value. Others may have mainly sentimental or practical importance.
And some, such as online banking access, may simply be a means of accessing an underlying asset rather than being the asset itself.
Are digital assets part of a deceased estate?
Potentially, yes, depending on what the digital asset actually is and what rights the deceased held.
South African estate administration generally requires the deceased’s assets to be identified and administered by the person legally authorised to administer the estate. SARS describes the deceased estate as holding the deceased person’s assets until they can ultimately be distributed in accordance with the estate administration process.

There is particularly clear guidance regarding crypto assets.

SARS expressly states that a crypto asset is regarded as a movable asset in a deceased estate. For estate-duty purposes it must be included as property in the estate and valued at fair market value at the date of death.
That makes crypto a good example of why digital estate planning can have very real financial consequences.

What happens to online accounts and social media?
This is less straightforward.
An online account is not necessarily an asset that can simply be transferred to another person.

What happens to an email, social-media, cloud-storage or subscription account can depend on several factors, including:

• the nature of the account;
• whether anything of financial value is associated with it;
• the service provider’s terms and procedures;
• the authority of the Executor or estate representative; and
• any instructions or options the account holder put in place during their lifetime.

Some platforms provide specific processes for deceased users, such as memorialising or closing an account or allowing certain information to be obtained by an authorised person.
For estate planning purposes, the important point is therefore not to assume that handing someone your password automatically gives them lawful authority to take over an account.

What about online banking and investments?

There is an important distinction here.
Your online banking login is not the same thing as the money in your bank account.
The underlying money, investments or other financial interests may form part of the deceased estate, but they must be dealt with through the proper estate-administration process.
The person authorised to administer the deceased estate derives their authority from the Master’s appointment process. SARS similarly recognises the duly appointed Executor as the representative taxpayer responsible for acting on behalf of the deceased person and deceased estate.
A family member knowing the deceased’s login details does not replace that legal authority.

Crypto assets require particular planning

Crypto can present a different practical problem.
Unlike an ordinary bank account, certain crypto holdings may depend on access to private keys, seed phrases, wallets or other credentials.
If nobody knows that the crypto exists, or the information required to access it cannot be recovered, an asset with substantial value could become extremely difficult or even impossible to retrieve in practice.
From an estate perspective, SARS is clear that crypto assets must be accounted for. They may also have income-tax, capital-gains-tax and estate-duty consequences depending on the circumstances.
This makes it important to have a secure plan that allows the appropriate person to identify the existence of the asset after death without unnecessarily exposing sensitive security information during your lifetime.

Should you put all your passwords in your Will?

Generally, that would not be a sensible approach.
Passwords change, and putting highly sensitive credentials directly into a Will can create practical and security problems.
A better estate-planning approach may be to maintain a separate, secure record that helps the appropriate person identify your important digital accounts and assets.

That record might identify:

• the account or digital asset;
• the provider or platform;
• why the account matters;
• whether it has financial or sentimental value;
• where important access information is securely stored; and
• any wishes you have regarding the account.

Exactly how sensitive credentials should be stored requires careful consideration. The objective is to make important digital assets discoverable without making them insecure.

What about photographs and personal files?

Not every digital item is financially valuable.
Family photographs, videos, personal writing and other files may have enormous sentimental value even though they have little or no monetary value.
If these are stored only on a locked device or cloud account, family members may struggle to locate or retrieve them after death.
Digital estate planning can therefore include thinking about what you want preserved, not merely what has financial value.

Don’t forget recurring subscriptions

Subscriptions may not be estate assets, but they can create practical administration after death.
Streaming services, cloud storage, software subscriptions, memberships and other recurring online payments may continue until they are identified and cancelled.
Maintaining an up-to-date record of recurring services can therefore make it considerably easier for the person administering your affairs to identify them.

Your digital life should form part of your estate planning

A useful digital estate plan does not need to consist of a huge list of every website you have ever joined.
Start with the things that would matter if nobody could ask you about them tomorrow:

• assets with financial value;
• important financial accounts;
• crypto holdings;
• websites or online businesses;
• important photographs and documents;
• essential email or cloud accounts; and
• recurring paid services.

Then consider whether the person who will administer your estate will be able to identify that they exist and determine the proper process for dealing with them.

Planning your estate?

Modern estate planning increasingly involves both physical and digital affairs.
DMF Attorneys assists clients with Wills, deceased estates and estate planning, helping ensure that important assets and wishes are properly considered.

Contact DMF Attorneys for assistance with your Will and estate planning.