Oluwatosin Oluyemi
The dynamic nature of Estate Planning is a broad spectrum which will remain as long as protection of assets remain a growing concern. Wealth preservation in the technological sphere, is not left out, as the increasing influx of partakers and stakeholders have made asset ownership and preservation an essential tool in ensuring adequate protection of wealth.
In a previous webinar hosted by ARM Trustees which held on 24th March this year, issues such as the digitization of estate planning tools and automation of processes, vis a vis, Electronically Generated Wills, classification of digital assets, as well as digital currencies were discussed. We also discussed the ease of this automated estate planning process to encourage wealth preservation and seamless transfer of assets from one generation to another.
To have a proper understanding of digital assets as it relates to Estate Planning measures, a comprehensive definition will come in to play. A Digital Asset is anything that exist only in digital form, comes with a distinct usage right, and can be used to realize value. Digital assets can be pictures, videos, cryptocurrencies, passwords, licenses for software developers, websites, presentations, audio files, and so on, which are stored and transmitted electronically. Digital assets can have both personal and financial value, making them an important part of the digital economy. Hence why we have monetized social media accounts on different platforms like Facebook, YouTube, Instagram, TikTok; also known as influencer accounts, and these are also digital assets which can be used to realize monetary value.
Another key point to note from the webinar, in understanding how digital assets can be included in different estate planning measures is that digital assets can be embedded into different estate planning measures, for example, an individual setting up a Trust which ensures that his/her beneficiaries are privy to necessary access codes/passwords needed for such beneficiaries to gain access to the digital assets in question, thereby, ensuring a seamless transfer of ownership and/or possession at the appointed time. However, in doing this, the Settlor must ensure to have obtained ownership of such digital asset as sometimes, mere user licenses (which mostly grants access for a limited period) are misconstrued to be ownership licenses. Thus, the Settlor must have proper documentation proving ownership, to authenticate the transfer of same. The latin maxim in law which reads nemo dat quod non habet (meaning you cannot give what you do not have) further buttresses this fact.
Additionally, it was mentioned that there will come a time in future where there will be no need to attach the word “digital” in categorizing the kind of assets which were referred to in this article, as the lines are already blurring between traditional and digital assets. Every asset will have a digital identity that is linked to its owner, through a record of ownership that will be protected by blockchain technology.
Thus, everything owned by an average individual — mobile phone, laptop, or even a family heirloom — will have the same digital identity that digital assets currently have. Despite the fact that we currently have to manually draw up our individual asset inventory, be rest assured that in the nearest future, everything will be automatically catalogued, and our digital identity will be connected to our estate plans.
For instance, if an individual were to buy anything of value, the purchase would be assigned to the person’s digital identity and would automatically store that information. Such an individual can then choose to share that with his/her estate planning professionals or even automate the process to establish a connection to the person’s estate plan. This will be a seamless experience which will make estate planning easier and more accessible to individuals in the nearest future especially as it avoids the use of manpower in manually drawing up an assets list and a leisurely onboarding process.
Oluwatosin Oluyemi is a Trust Advisor at ARM Trustees Limited, Nigeria. You can contact ARM Trustees by sending a mail to [email protected] or visit www.arm.com.ng/trustees
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