The creation and existence of a will can ensure you have certainty on how your assets will be divided amongst your beneficiaries. With the introduction of cryptocurrency, NFTs, tokenization and blockchain technology, many South Africans have taken a shine to these new ways of transacting and investing. As a result, many South Africans who own crypto assets and NFTs are left wondering how they will be able to ensure that these assets end up with their beneficiaries, considering the nature of the assets themselves and how blockchain technology operates.
What are Crypto Assets
Crypto assets are currently not expressly regulated in South Africa; however, the Intergovernmental Fintech Working Group (the “IFWG”) published a position paper in which it sets out proposed development that will act as a framework for how crypto assets are to be regulated in South Africa. The IFWG’s crypto asset regulatory working group, which consists of the South African Revenue Service (“SARS”), the Financial Sector Conduct Authority (“FSCA”), the South African Reserve Bank (“SARB”), and the Financial Intelligence Centre (“FIC”) prepared and drafted the position paper. In the position paper, crypto assets are defined as follows:
“A crypto asset is a digital representation of value that is not issued by a central bank, but is traded, transferred and stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility, and applies cryptographic techniques and uses distributed ledger technology”.
Although the definition does not state that crypto assets are money, it is acknowledged that these types of assets have value and can perform similar functions to that of money.
The Process of Placing Crypto Assets in your Will
Many may think that simply listing the crypto assets in their will may be sufficient for their executor to trace these assets and have them transferred to their heirs; however, it is a lot more complex than that. Due to the anonymous nature of crypto assets, how they are held and their existence solely in a digital space, it can be difficult for executors to actually trace these assets as they are primarily stored on highly secure and encrypted platforms that are known as wallets. The executor will be required to access these wallets after your death in order to affect the transfer of your crypto assets.
For security reasons and to protect these assets, the details of how to access these assets should not be included in your will; however, there should be clauses that note the existence of the assets and how you want them to be dealt with. These details should be placed on a separate document which is referred to in the will, and that is kept in a safe location only known by your executor or another individual you trust, which will ensure that your executor is aware of the crypto assets, can note them and have them transferred in terms of your wishes set out in your will.
Conclusion
Including your crypto assets in your will is the only way to ensure that your loved ones and beneficiaries receive them after you have passed on. It is, therefore, crucial to ensure that you have a well-drafted will. Consult a legal professional before having any legal documentation drafted that may affect your family.
Contact an attorney at SchoemanLaw for your legal needs!
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