How has digital revolution impacted the estate and trust planning space? What are some of the areas that an executor or administrator has to consider when it comes to "digital asset"? KK Lim, Advocate & Solicitor (Singapore), and Chair of Cybersecurity and Data Protection Committee (Law Society of Singapore), shares insights with Asia Advisers Network*.
The impact of digital revolution has also impacted the trust planning space. The specific question is can we also include digital asset in our trust or a will when we meet with our family solicitor or trust planners?
A few key questions for trust professionals could be the following:
(a) Can the law, regardless how fast the reforms are, truly keep pace with technology?
(b) How wide or deep can technological disruption be to your current practice as a professional estate planner?
(c) Will it radically change the way you operate and make your provision of trust service obsolete or can you “ride on the waves” instead and profit from it further?
Can your SMS be your “final and last testament”?
In Re Nichols (2017) QSC 220 (9 October 2017), the issue at hand was whether an unsent Short Messaging Service (SMS) indicating a person’s last wishes should be held up as a valid will? The court decided that the circumstances surrounding the facts clearly points to this and upheld that message as the final wishes of the deceased.
So far there is no reported local case on this point but with the proliferation and usage of social messaging, it is not inconceivable that a person may send his or her last wishes over popular messaging media such as WhatsApp or Telegram before the person board the ill-fated flight and if so, do such messages count as the “final and last testament of John Doe?”
Bequeathing “digital assets”?
A closely related matter is whether “digital assets” be bequeathed to the next of kin? It then begs the question of what is exactly a digital asset.
While it is beyond the remit of this article to examine whether a digital asset is actually an asset recognised in law and therefore can be bequeathed to a person of the deceased’s choice, it is perhaps essential to recognise some of the features of a “digital asset”.
It is suggested that the nature of a digital asset in whatever form is actually an electronic record of sort. Under the Singapore Electronic Transactions Act clause 2 (1), the legal definition of an electronic record means … Electronic record means a record generated, communicated, received or stored by electronic means in an information system or for transmission from one information system to another.
This Act enacted close to 20 years since 1998 may be applicable to digital asset such as cryptographic currency like “Bitcoins” since at the nub of all these new digital assets is essentially an electronic record of sort.
Whether this record is recognised as an asset in the legal sense is a separate issue. The relevant questions surrounding this particular class of asset are:
(a) Is this a legal tender and recognised by the political entity – the state as an authorised unit of account?
(b) Is it used widely as a medium of exchange or is the usage confined to a particular system or environment like a currency exchange for certain utility function or exchanged for certain value only within the environment?
(c) Is there a fixed nominal value to these coins such that one USD or SGD or RM is recognised as such widely and used or exchanged as such?
The final and most important issue relating to these digital assets is security access. Does the executor or the administrator or even the trust planner has the password to access that device (a mobile phone, a website, an account hosted on a platform, the token performing the 2 factor authentication etc)
Many digital asset by their very nature is only accessible through a digital medium and without access it is almost useless to the executor /administrator even though he or she has the rightful authority to access and manage the asset according to the will.
If your client is someone who is a “digital native” and you are the new “digital asset administrator” it is suggested that you may wish to consider the following in administrating any “digital asset”:
a. Ensure that you are comfortable in using Internet technology and that goes beyond just using Google and emails for example. You need to be generally interested in Internet related technologies and read widely on this topic;
b. Check with the Client on the value of his/her digital assets. Know precisely what they are and how to access them;
c. Explain why it is important to include this class of asset in his/her will;
d. List all the access codes and their digital assets under the “digital assets memorandum”, commit to the wishes of your Client and attached it as part of the physical will for clarity;
e. Work closely with the appointed lawyers, administrators, trustee, trust companies and even the beneficiaries where appropriate; and
f. Be ready to engage in many Internet related companies in helping to execute the will.
The Internet and the resulting technologies will continue to throw up new services and products, disrupt the market and affect you as a professional trust planner. Whether you want to ride the technological wave that is disrupting the market is, like most career decisions, a personal choice for many planners. After all, “risk comes from not knowing what you’re doing” according to the sage of Omaha.
* KK Lim, Advocate & Solicitor (Singapore), Lex Advocatus
Chair: Cybersecurity and Data Protection Committee (Law Society of Singapore), Mediator (Law Society Mediation Scheme)
Honorary Legal Adviser: Association of Information Security Professionals (AiSP)
Parts of this paper is taken from a presentation presented at Rockwills Pte Ltd Seminar on 3rd October 2018 and their contribution is gratefully acknowledged. No part of this article should be relied on as any form of legal advice or represent the views of any organization listed here.
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