Ensuring the Future: The Critical Role of Succession Planning for Digital Assets;
Introduction
In today’s world, technology plays a pivotal role, influencing almost every aspect of our lives. Many individuals, particularly the youth, are reaping significant financial rewards from digital innovations. However, the legal framework governing digital assets remains inadequate. It is imperative for society to establish comprehensive statutes to regulate and manage the operations and impacts of technology. Succession planning for digital assets is a crucial area that requires greater attention from lawmakers. This article aims to explore the nature of digital assets, their impact, and the necessity of having robust succession laws to govern their transfer.
Understanding Digital Assets
A digital asset is anything identifiable and valuable that is stored digitally. Digital assets must create or generate value to the owner. The owner should be able to transfer the digital assets through purchase, gifting, or other means of giving the right to someone else. Regarding identifiability, digital assets must be discoverable or stored somewhere that can be found. Here is a list of the various forms of digital assets; photos, books, videos, animations, manuscripts, social media accounts, content, metadata, logos, emails, email accounts, audio, music, etc. Other digital assets are based on blockchain or similar technologies. These assets include; crypto assets, central bank digital currencies, tokens, tokenized assets, and nonfungible tokens.
Digital Assets’ Impact
Digital assets have had a great impact on various sectors. It has led to market innovation and diversification. Cryptocurrencies and other investments like crypto have taken up the business world. They have introduced new investment opportunities, allowing investors to diversify beyond the traditional stocks and bonds.
Digital assets have also introduced smart contract in the business world. Smart contracts are self-executing contracts with the terms directly written into the codes. These contracts have reduced the need for intermediaries, thus, creating a business-friendly environment
Another significant impact that digital assets have had in society is that they have led to the formation of online communities which have common goals and interests. Online businesses have created so many job opportunities. These same communities have also contributed greatly to the success of famous influencers and brands globally.
Importance Of Succession Laws For Digital Assets
What happens to social media accounts, online banking accounts, emails, and digital photos when their owners pass away? What happens to a digital wallet and who gets to operate it when the account owner dies suddenly? These are some of the questions that need to be addressed and that can only be done through the formulation and implementation of various statutes in relation to digital assets. The law is very silent on this, and it is worrisome, especially to people who specialize in digital assets to create sources of income.
One of the primary functions of succession law is to ensure access and control of a deceased’s assets. These laws ensure that the rightful beneficiaries of the assets access and manage them accordingly. Without clear guidelines, beneficiaries may experience challenges in accessing the digital assets, leading to the potential loss of valuable information or funds.
Secondly, succession laws will help in preventing identity theft. When these digital assets are left unattended to, cyber criminals always find ways to exploit them. Proper legal mechanisms ensure that control of these assets is swiftly transferred to authorized individuals, reducing the opportunities for illicit activities.
Having succession laws on digital assets will ensure smooth transition of those assets to the right beneficiaries. When the law is silent on sensitive matters like inheritance, relatives end up fighting over a deceased’s property. The law always keeps man in check as it binds everyone. Therefore, creating succession laws that address how digital assets should be transferred will ensure the smooth transition of those assets to the rightful beneficiaries.
Conclusion
The main reason we lack succession laws on digital assets is the lack of awareness about the need to include digital assets in estate planning. Additionally, technology is evolving rapidly, making it difficult for laws to keep pace. Furthermore, online platforms have different policies that govern them, making it challenging to unify the entire system. Nonetheless, countries that are still lagging in developing legislation for the management of digital assets should treat this issue with utmost urgency to protect these assets. As the saying goes, prevention is better than cure.
For more insights pertaining to this matter, you can reach the writer at vallarynyala@mmsadvocates.co.ke . You can also contact us at MMS Advocates, Lower Duplex Apartments, LOWER HILL ROAD, or email us at info@mmsadvocates.co.ke