Modern estates may include social media accounts, cryptocurrencies, non-fungible tokens (NFTs), domain names, electronically stored content, and monetised online businesses. These digital assets could represent a significant portion of an individual's wealth. Without careful planning, however, they may be permanently lost or create unintended administrative difficulties, tax liabilities, and legal complications upon death.

Physical assets are generally straightforward for the executor of a deceased estate to locate, value, and administer. Digital assets, on the other hand, present unique challenges because they are intangible, often held on foreign-based platforms, and frequently protected by passwords, encryption, and multi-factor authentication. Under the Administration of Estates Act 66 of 1965, an executor is required to take control of and distribute all assets forming part of the deceased estate. In practice, however, an executor cannot administer assets that cannot be identified or accessed.

As digital wealth becomes more common, incorporating digital assets and electronically stored information into an estate plan requires a proactive and comprehensive strategy. Testators and beneficiaries should understand the steps necessary to protect, preserve, and transfer digital assets effectively.

Cryptocurrency and the Blockchain challenge
Cryptocurrencies and NFTs are secured by cryptographic private keys. Unlike traditional banking systems, there is generally no central institution that can restore access if a password, private key, or seed phrase is lost. Consequently, if these credentials cannot be recovered, the assets held in the wallet may become permanently inaccessible.

Where crypto assets are held through a centralised exchange, recovery may be possible through the platform's deceased-estate procedures, subject to its terms and conditions and documentary requirements.

To mitigate these risks, testators should ensure that their estate plan properly documents the existence of cryptocurrency holdings. Importantly, never include private keys or seed phrases in a will, as a will becomes accessible during estate administration and may ultimately become part of the public record.

Instead, store access credentials securely through reputable password managers, encrypted offline storage solutions, or appropriately secured hardware wallet recovery arrangements. A confidential letter of wishes may provide practical guidance to executors and beneficiaries, although such a document is not legally binding and should not replace operative provisions of the will.

Where appropriate, a testator may nominate a co-executor with relevant technical expertise or authorise the executor to appoint cybersecurity, valuation, tax, and other specialist advisers to assist with the administration of digital assets.

SARS, Tax, and Estate duty implications
The South African Revenue Service (SARS) does not afford special treatment to digital assets. Cryptocurrencies, valuable domain names, and other digital property constitute assets that must be disclosed and included in the estate inventory.

For Estate Duty purposes, the fair market value of these assets at the date of death forms part of the net value of the estate. Given the volatility of cryptocurrency markets, executors should carefully determine and document market values using reputable exchange data, professional valuations, or other appropriate evidence.

In addition, SARS continues to scrutinise cryptocurrency transactions and their interaction with traditional banking systems. If an executor fails to identify, value, and account for digital assets, it may result in penalties, additional assessments, delays in finalising the estate, and potential compliance concerns.

Cloud accounts, social media, and online businesses
Digital assets and records extend beyond cryptocurrency. They may include cloud storage accounts, email accounts, websites, domain names, social media profiles, and online businesses. A monetised video channel, e-commerce store, subscription platform, or influential social media account may continue generating income after the owner's death and may require ongoing management during estate administration.

A critical distinction must be drawn between owning a digital asset and a contractual right to use an online account. Domain names, digital intellectual property, business interests, and receivables may be transferable assets capable of passing to heirs or beneficiaries. By contrast, platform accounts, software licences, streaming libraries, loyalty programme benefits, and certain social media profiles may be personal, non-transferable, or subject to termination upon death under the relevant terms of service.

Many online platforms impose strict limitations on third-party access following a user's death. Some provide procedures for memorialising, deleting, or transferring control of an account, while others require a death certificate, letters of executorship, and supporting documentation before considering any request for access or assistance.

One effective solution is to include a dedicated Digital Assets Clause in a will. Such a clause can expressly empower the executor to manage, preserve, transfer, or close digital accounts and assets where legally permissible. Nevertheless, executors should avoid using a deceased person's credentials to impersonate the deceased or circumvent a platform's formal procedures. Access should always be obtained lawfully and in accordance with applicable contractual and legal requirements.

Maintaining a regularly updated and securely stored inventory of digital assets, accounts, devices, usernames, asset locations, and practical instructions can significantly reduce the risk of mismanagement, loss, or unnecessary delays.

AI-generated Intellectual Property
As individuals increasingly use artificial intelligence to create commercially valuable content, including written works, software code, digital media, and other intellectual property, these assets may also form part of a digital estate.

Although the legal treatment of AI-generated intellectual property continues to evolve globally, the estate-planning process should consider any associated commercial rights, licensing arrangements, subscription revenues, or contractual entitlements. Pay particular attention to royalty streams, licence fees, maintenance obligations, confidentiality provisions, and whether the relevant agreements permit the transfer of rights after death.

Failing to plan for digital assets can result in administrative complications, loss of value, and significant tax or compliance challenges in the administration of a deceased estate. A well-structured estate plan should identify digital assets, distinguish transferable property from personal rights of access, secure credentials outside the will, address valuation and tax obligations, and grant the executor appropriately defined powers to obtain specialist assistance where necessary.

Digital estate planning should also not be viewed as a once-off exercise. Review digital asset inventories, security arrangements, beneficiary instructions, and platform-specific legacy settings regularly, especially after acquiring new cryptocurrency holdings, opening an online business, changing devices, or implementing new authentication and security measures.


Disclaimer: This article is the personal opinion/view of the author(s) and does not necessarily present the views of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever, and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken based on this content without further written confirmation by the author(s).