THE weight of digital assets has often been underappreciated in inheritance matters. With advanced technology and widespread awareness, African societies are beginning to re-think inheritance practices and planning for digital assets in addition to the traditional physical assets, such as land and houses.
To date, there are very few frameworks and systems in place that offer guidance on how digital assets can be inherited when an individual passes on. This article, with focus on Tanzania, will help explain what digital assets are and best procedures for their proper care and stewardship.
A digital asset is content that has been stored in an electronic or cyber platform. This includes email addresses, mobile money accounts, social media platforms, photographs, literary works, music libraries, cryptocurrencies and so forth. Section 83 C (2) (a) & (b) of the Income Tax Act (Cap. 332) of Tanzania, as amended by the Finance Act, 2024 addressed financial digital assets and non-fungible tokens (NFTs), whereas the Anti Money Laundering (Amendment) Act, 2022 specifically defined a “virtual asset” as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes and is recognised by the government of the United Republic and does not include digital representations of fiat currencies, securities and other financial assets that are already covered in the laws of the United Republic.
It should be understood that a virtual asset is one form of a digital asset. To date, there is insufficient clarity on whether digital assets count as property in Tanzania.
This would mean distinguishing between ownership and possession. Ownership is defined as the complete dominion, title, or proprietary right in a thing or claim whereas possession means the detention and control, or the manual or ideal custody, of anything which may be the subject of property, for one’s use and enjoyment, either as owner or as the proprietor of a qualified right in it, and either held personally or by another who exercises it in one’s place and name .
In simple terms, one may possess a google drive account but not necessarily own it. In this respect, the Mine is Yours project was created by Pollicy, a Pan-African research and technology institute that works to construct ways through which Africans can take back control of their data and reimagine new ways of tech ownership.
This project aims to understand how digital assets are inherited in Africa, specifically in Tanzania, Malawi and Ghana as a start. By breaking down the complexities of managing digital assets in a continent that is rapidly experiencing a technological revolution, the project will offer solutions to help shape legal frameworks, secure storage mechanisms, and cultural beliefs on estate planning.
Writing a will
One of the components under this project is the creation of wills. A will is the legal declaration and instructions made by an individual with respect to his/her property, and how they should be managed after his/her death. This definition comes from the Probate and Administration of Estates Act of 1963 (with subsequent amendments), which is one of the laws regulating wills in Tanzania.
For a will to be valid, the testator must be 18 years and older, have sound mind, be intentional and not coerced, indicate proper distribution of assets and appoint an executor (that is the person who will oversee all of the assets).
Lastly, the will must be signed, dated and witnessed by two people who are not the beneficiaries. It is important to understand that procedurally, the High Court holds authority to authorise execution of wills and appointment of administrators to distribute assets; and also the power to alter or revoke such appointments. Leaving behind a will is a crucial act of responsible planning that ensures one’s wishes are honoured after their passing.
By creating a will, you have the power to designate beneficiaries for your assets, appoint a trusted executor to manage your estate, and even provide instructions for your funeral arrangements. This empowers you to distribute your belongings according to your desires, minimising potential conflicts and disputes among loved ones. Ultimately, a well-crafted will offers peace of mind, knowing that your legacy will be handled with care and respect.
A specific legal framework on digital asset inheritance
Currently, Tanzania’s Personal Data Protection Act, 2022 already makes provisions for digital asset management by affording a data subject several rights, including the right to make profit from his or her own data . Under the banking sector, unclaimed assets have been addressed and procedurally, they need to be remitted to the Central Bank, the Bank of Tanzania (BOT) at the end of each financial year.
This provision has been set by the Banking and Financial Institutions Act, No. 4 of 2006. Recent discussions have also analysed inheritance procedures of mobile money accounts, with insight showing that an individual may consult A telecom company and BOT to claim those assets. The rapid growth of digital assets in Tanzania necessitates a specific law for digital asset inheritance.
This legal framework would provide clarity and guidance on the ownership, transfer, and inheritance of digital assets, such as cryptocurrencies and NFTs. Without such a law, the process of managing and distributing digital assets upon an individual’s death becomes uncertain and potentially contentious. A dedicated law would ensure that the deceased’s wishes regarding their digital assets are respected, preventing disputes among heirs and safeguarding their digital legacy. Furthermore, it would promote the responsible use and growth of the digital asset industry in Tanzania by providing a clear legal environment for individuals and businesses alike.
Thinking ahead
Tanzanians ought to benefit from their own digital assets, whether financially or sentimentally. Therefore, this project hopes that different actors in society will begin to enforce digital inheritance practices into their sectors, be it law makers, tech experts, network providers, financial institutions, or the government. Additionally, the project hopes to foster a culture of preparing wills as a common practice in African communities. Not only will it encourage the data subject to know and gather all of their digital assets, but also ensure that they leave a legacy through a contact person of their choosing.
The rapid evolution of technology often outpaces the law, and the inheritance of digital assets is no exception. By proactively analysing existing succession laws, educating the public about digital asset management, and fostering a broader understanding of various digital assets, we can protect Tanzania’s digital wealth and secure our financial future.
The writer is Data Governance Specialists from Pollicy, reachable via +255 762 721323 and email: rachel@pollicy.org
