Beyond Land & Cash: Exploring Africa’s Digital Inheritance Regime

From Wednesday 17th — Friday, 19th July 2024, more than 100 tech and digital rights stakeholders from all over the world convened at the AGA KHAN UNIVERSITY HOSPITAL, EAST AFRICA in Nairobi, Kenya to celebrate the annual DataFest Africa conference. Courtesy of Pollicy in collaboration with Aga Khan University, this convening was centered on celebrating Africa’s tech innovations and carried the key theme of Opportunities for All: Harnessing Data and Technology for Africa’s Transformation.

During DataFest Africa, one of the conversations held was on digital asset management and inheritance in Africa. Under Mine is Yours, Pollicy’s new project, a panel session convened to address and discuss how digital assets are inherited in Africa as well as the complexities that arise when it comes to managing digital assets in a region that is rapidly experiencing a technological revolution. This project was inspired by different conversations on Africa’s evolving data governance landscape, as witnessed by the African Union’s Artificial Intelligence Strategy, the Africa Continental Free Trade Area Agreement (AfCFTA) Digital Trade Protocol and many others.

This article will shed light on key points addressed in the panel session at DataFest Africa, feedback from audience members as well as actionable steps moving forward. At the end, readers will have grasped a better understanding of digital assets, what it means to properly own, manage and utilize them in accordance with African legal frameworks, current inheritance practices and secure storage systems in this new age of digital revolution.

The nature of digital assets

The fake story of Bruce Willis suing Apple over iTunes rights brings forth the idea that one is able to pass on their ‘vast’ digital music library to their beneficiaries; welcome to the world of digital assets capable of being inherited. But first, what are digital assets? Effectively they are any asset that is accessed or held online. There is a vast array of online providers holding items that could be classed as an asset, such as:-

• Financial Institutions — payment gateways, banks, credit unions, PayPal;
• Share Trading — spread betting, stockbrokers, e-trade, gambling e.g. sportpesa, Saga, Finspreads;
• Social Media — Facebook, X, YouTube, TikTok, Instagram, LinkedIn;
• Email accounts — Google, Yahoo, Hotmail;
• Content Holders — iTunes, Spotify, Amazon, eBooks, music, videos;
• Government Departments — HMRC, e-Citizen;
• Online Auction sites — eBay, craigslist;
• Online Gaming sites — World of Warcraft, Grand Theft Auto;
• Blogs and Vlogs and Podcasts;
• Domain names and websites;
• Virtual Currency– Bitcoin;
• Cloud Storage — Dropbox, Live Drive, i-Cloud etc.

With that in mind, it is evident that two critical aspects exist: ownership and control, and it is necessary to distinguish between the two. There is a clear legal distinction between a licence to use and ownership. Ownership offers exclusive possession and control, but a license to use provides revocable permits for temporary and non-exclusive usage; unfortunately many consumers are unaware of this.

To demonstrate the aforementioned distinction, consider the following: iTunes’ terms and conditions declare that “the Products transacted through the Service are licensed, not sold, to you for use only under the terms of this license.” while Amazon clarifies: “Amazon or its content providers grant you a limited, non-exclusive, non-transferable, non-sub-licensable licence to access and make personal and non-commercial use of the Amazon Services.” At the same time, Bitcoin is an electronically stored digital asset that may be purchased, sold, possessed, transferred, or exchanged.

Passwords/logins

A key feature of digital assets is security; this is an important characteristic for those who spend so much time and money on the internet and digital assets. On this basis, people typically keep their passwords or complicated login information a tightly guarded secret and seek to change them on a frequent basis.

To facilitate inheritance to beneficiaries in such situations, the easiest way around is simply using the deceased or incapacitated client’s password to access the assets. However, legally, this muddies the waters because signing in using the deceased or disabled person’s credentials is likely to violate the terms and conditions that govern the digital asset. Furthermore, they might infringe the different Computer Misuse or Computer Fraud and Abuse legal rules, as well as other local laws.

Tools

Different tools can be used to ensure that password & login details can be securely transferred to the intended beneficiary. These tools or mechanism can include:

1. Legacy contact: this is a person you designate to manage your digital assets after your death.
2. Deletion or destruction tools: this entails setting a mechanism in which the digital asset can be deleted in a platform as per the deceased wishes or family members.
3. Custodian keys: this is the use of a third party to manage and hold the private keys/passwords of digital assets. The custodian will have the duty of passing the keys to heirs of the deceased.
4. Use of digital vaults which are virtual safe deposit boxes whereby the login details or password can be stored in for safe access by the beneficiary.
5. Use of Beneficiary designation tools that enable digital asset owners to specify who will inherit their digital assets upon their passing.

Value

Digital assets are valued at both their monetary and sentimental worth. Sentimental value stems from attachments to an object that are personal or emotional and typically surpass its monetary worth. It serves as a reminder that value is not just based on price tags or market value, but also on the sentimental and personal connections we have to the things in our lives. For instance, although photographs are typically inexpensive, their sentimental value can be immeasurable, whereas monetary value is an objective, quantifiable indicator of an item’s worth that is typically agreed upon.

Management of digital assets and estate planning

Lack of guidance by the law

Most of the control surrounding access and transferability of digital assets has been maintained by digital platform providers. This is far from ideal and long term unworkable. Digital platform providers, such as social media, crypto trading platforms and others are determining transferability of digital assets, access and permission restriction in inheritance. Digital platform providers therefore play a crucial role in digital inheritance. For financial planners, digital assets raise several issues, not the least of which is identification and valuation of those digital assets.

Data sovereignty (data — such as intellectual property, financial data, or personal information — collected or stored in a particular geographic location, such as a specific country should be subject to the laws of that location) and jurisdictional law remain of critical concern. Most frameworks relating to estate administration were written in the pre-digital age. Due to the uncertain status of ownership and control of digital assets, and the inherent difficulties in extraterritorial application of laws or court orders upon international companies hosting these assets, the need for a major international push for mutually accepted guidelines is clear

In Kenya for example, the legal framework that governs insolvency does not effectively cater to crypto-assets, creating uncertainties and difficulties for creditors and debtors in such situations.

Security of login access to online accounts (especially banking and finance) is also a legitimate concern, and something that must be adequately addressed.

What should different stakeholders do now?

Developing a successful digital inheritance practice in Africa will require involvement of different stakeholders from government authorities, academicians, platform providers, judiciary and the general public. Below is a summary of what each key stakeholder can do.

Digital asset owners: Individuals owning digital assets should prioritize implementing measures to safeguard their digital possessions and establish clear guidelines for their transfer upon passing. This proactive approach ensures that the value accrued online is not lost and smoothens the inheritance process. Below are the key measures that can be taken:

1. Do regular update, back-up and recovery process of the digital asset;
2. Have strong security and secure storage of the digital asset;
3. Developing an inventory of digital assets; and
4. Drafting a will (digital will) with details on how heirs can obtain access/password to your digital assets.

Digital platform providers: Platform providers need to ensure that they design products or platforms in a manner that allows users to develop and pass their digital legacy to the beneficiary. This can include developing access and permission tools, automated transfer mechanisms, drafting smart contracts that incorporate the transferability of digital assets, and having clear terms and conditions regarding inheritance process.

Practitioners or relevant parties will usually encounter several issues after someone loses mental capacity or dies. However it is very important to be aware of digital assets when drafting a succession plan:-

• Inform clients about issues surrounding digital assets;
• Encourage your client to draft a digital asset log;
• Suggest your client presses print in relation to key digital assets to assist location of these assets;
• Prepare written instructions to executors about what you want done if you were to die or lose capacity — for instance memorialisation or deletion of digital footprint etc;
• Review important terms and conditions, and consider law in jurisdiction of key accounts;
• Draft an appropriate clause in one’s will and consider appointing a specific executor to manage your digital assets;
• Detective work needed after someone dies or loses mental capacity. Need to investigate their bank statements, computers, mobile phones, email accounts etc;
• Consider intellectual property rights of clients and what the position of the service provider is; and
• Liaise with the employer (if applicable) as access to work email may assist with location of assets.

Government & Judiciary role: African governments must fashion policies that create an environment that allows digital assets to flourish by ensuring that laws recognize digital assets and facilitate inheritance processes. The judiciary should also play a proactive role in handling digital inheritance matters by adopting a wider approach that recognizes the unique nature of digital assets.

Conclusion:

The law is always catching up with technology, and the matter of digital asset inheritance is no different. However, by critically examining the current legal landscape on succession, raising awareness on digital asset management and shaping the understanding of society on the various types of digital assets, we are already thinking far ahead and can help frame regulations and systems that allow for smooth transferring and inheritance of digital assets in Africa.

Through this piece, we remain optimistic that the conversation on digital asset inheritance will afford readers valuable insights into navigating this new frontier of digital asset planning in Africa.

Authors: Rachel Magege ( Pollicy ), Ms Fatma Haruna Songoro ( VICTORY ATTORNEYS & CONSULTANTS ), Mutua Mutuku ( Sisule & Associates LLP ) & Joshua Kitili ( CIPIT

Published: This Blog is published on the DataFest Africa 2024 Website by Pollicy