By Mr Lee Chiwi
Excerpt from PreceptsGroup Succession and Trusts in Wealth Management (4th edition) Book
Digital assets comprise electronic records and information, documents, literary works, images and even money in electronic form stored in computers, hard disks, online cloud storage services, digital accounts and other forms of media capable of storing electronic information.
Examples of digital assets include the following:
• Online accounts – bank accounts, payment gateway accounts, e-wallet, e-commerce accounts, investment, personal email accounts, gaming or cryptocurrency accounts.
• Social media accounts – Facebook, twitter, Instagram or LinkedIn accounts.
• Reward programs – airline miles, hotel credits.
• Personal data – photographs, electronic books, music or videos in computer or kept on a cloud server.
• Others – domain names, blogs, websites, cloud storage accounts like Dropbox or Google Drive or online business sites.
They can be of financial or emotional value. We cannot rule out that digital assets of emotional value may yet be exploited and have commercial value. But based on such categorization, it may be appropriate for separate persons to be dealing with them after death of the deceased.
We now see digital data everywhere and everyone is using less cash nowadays and instead using their digital wallets (which allows electronic credit and debit transactions) through their smart devices and mobile phones to make payments and engage in all kinds of transactions. Points and rewards are digitally stored and utilized for payments or to obtain benefits.
We cannot rule out that there will surely be digital assets that are employed in the family business. It can be expected that as Singapore strives towards being a leading smart nation, many business transactions within the private and public sector will increasingly become the norm.
The wide ambit of Digital Assets and non-uniform legal markers
In dealing with the succession of digital assets, one needs to be mindful that there might be the lack of established laws and uniform definitions when a person other than the deceased is to take over the administration of digital assets. The applicable laws concerning may be that of the laws of an unfamiliar jurisdiction where the service provider resides. The relevant laws and data protection and security regulations now widely prevalent may only recognize and allow only certain parties other than the testator to handle the digital asset after the testator’s demise. When the testator subscribed for the service, he would have consented to be bound by the terms and conditions of the service provider, which terms and conditions are to be ascertained by his executors. And in some cases, the perceived “ownership” of the digital asset is in fact only a license to use. Hence the license will no longer be available when the testator deceases. Where there is no ownership, the contents relating to the digital assets could not then be transferred to any beneficiary. Whether benefits associated with a digital account will survive death depends on the terms of the service provider. Some service providers may have some form of legacy contract or inactive account management service which allows the account to be closed or for submission of a request for transfer of data account of the deceased.