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Digital Assets in Estate Planning in Kenya: How to Include Them in Your Will

In today's digital age, estate planning in Kenya must evolve to encompass not only physical assets like land, property, and cash but also digital assets, which are increasingly significant in personal wealth. Digital assets include mobile money accounts (e.g., M-Pesa), online investments, cryptocurrency, social media accounts, digital photos, and email accounts. Under Kenya's Law of Succession Act (Cap 160), these assets must be carefully accounted for to ensure they are distributed according to the testator's wishes and to avoid disputes among heirs. This article explores what digital assets are, their relevance in estate planning, and how to incorporate them into a will under Kenyan law.

Digital assets are intangible properties stored in digital formats, often accessible through online platforms or devices. In Kenya, common digital assets include:

  • Mobile Money Accounts: M-Pesa, Airtel Money, and other mobile banking platforms hold significant funds for many Kenyans.

  • Online Investments: Shares, bonds, or mutual funds managed through platforms like the Nairobi Securities Exchange (NSE) or apps like EasyEquities.

  • Cryptocurrency: Bitcoin, Ethereum, or other digital currencies stored in wallets.

  • Digital Media: Photos, videos, or music stored on cloud services like Google Drive or iCloud.

  • Social Media and Email Accounts: Accounts on platforms like Facebook, Instagram, Gmail, or LinkedIn, which may have sentimental or financial value.

  • Online Businesses: E-commerce stores, blogs, or YouTube channels generating income.

These assets often have monetary, sentimental, or operational value, making their inclusion in estate planning critical.

The Law of Succession Act (Cap 160) and Digital Assets

The Law of Succession Act (Cap 160) governs the administration of estates in Kenya for both testate (with a will) and intestate (without a will) successions. While the Act does not explicitly mention digital assets, they fall under the definition of "property" in Section 3(1), which includes "money, goods, choses in action, and every description of property, whether movable or immovable." Digital assets, therefore, qualify as part of an estate and must be accounted for in a will or during estate administration.

However, digital assets present unique challenges:

  1. Access Issues: Many digital assets are protected by passwords, two-factor authentication, or encryption, making them inaccessible without proper documentation.

  2. Lack of Awareness: Heirs may not know about the existence of certain digital assets, such as cryptocurrency wallets or online investment accounts.

  3. Platform Policies: Some platforms, like M-Pesa or social media, have specific policies for accessing deceased users' accounts, which may conflict with the testator's intentions.

  4. Valuation: Determining the value of digital assets, especially cryptocurrencies or online businesses, can be complex.

To address these challenges, careful planning is required to ensure compliance with the Law of Succession Act and to facilitate smooth asset transfer.

Including Digital Assets in Your Will

To effectively incorporate digital assets into your estate plan under Kenyan law, follow these steps:

1. Inventory Your Digital Assets

Create a comprehensive list of all your digital assets, including:

  • Account Details: Name of the platform (e.g., M-Pesa, Binance, Gmail), account numbers, or usernames.

  • Access Information: Passwords, PINs, recovery phrases (for crypto wallets), or security questions. Do not include this sensitive information directly in the will, as wills become public documents during probate.

  • Monetary Value: Approximate value of each asset, if applicable (e.g., KES 50,000 in M-Pesa, $1,000 in Bitcoin).

  • Sentimental Value: Note any accounts with personal significance, such as family photos on Google Drive.

Store this inventory securely, such as in a password-protected digital file or with a trusted lawyer or executor, and reference its location in your will.

2. Appoint a Digital Executor

Under Section 7 of the Law of Succession Act, a testator can appoint an executor to administer their estate. Consider designating a digital executor—a tech-savvy individual responsible for managing your digital assets. This could be the same person as your general executor or a separate individual with expertise in digital platforms. Specify their role in the will, e.g.:

"I appoint [Name] as my digital executor to access, manage, and distribute my digital assets, including my M-Pesa account, cryptocurrency wallets, and social media accounts, as per my instructions."

Ensure the digital executor is aware of platform-specific policies, such as Safaricom’s requirements for accessing a deceased person’s M-Pesa account (e.g., death certificate, next of kin documentation).

3. Draft Clear Instructions in Your Will

A will must comply with Section 11 of the Law of Succession Act, which requires it to be in writing, signed by the testator, and witnessed by two competent witnesses. Include specific provisions for digital assets, such as:

  • Identification: Clearly identify each digital asset (e.g., "My M-Pesa account registered under mobile number +254 7XX XXX XXX").

  • Distribution: Specify who inherits each asset (e.g., "I bequeath the funds in my M-Pesa account to my spouse, [Name]").

  • Access Instructions: Reference where access information is stored (e.g., "Details for accessing my digital assets are stored in a sealed envelope with my advocate, [Law Firm Name]").

  • Management or Closure: For non-transferable assets like social media accounts, indicate whether they should be memorialized, deleted, or managed (e.g., "My Facebook account should be memorialized as per Meta’s policies").

Example clause:

"I direct my digital executor to distribute the balance in my M-Pesa account, registered under [phone number], to my children in equal shares. Access details are stored in a secure digital file, the location of which is known to my advocate."

4. Address Platform-Specific Policies

Research the policies of platforms holding your digital assets. For example:

  • M-Pesa: Safaricom requires a death certificate, proof of next of kin (e.g., marriage certificate or birth certificate), and a court order or letter of administration to release funds. Include a clause in your will authorizing your executor to obtain these documents.

  • Cryptocurrency: Provide instructions for accessing wallets (e.g., private keys or seed phrases stored in a secure location). Specify how to transfer or liquidate the assets.

  • Social Media: Platforms like Facebook allow accounts to be memorialized or deleted but may not permit full access to content. Check each platform’s terms of service.

5. Secure Access Information

Avoid including passwords or PINs in the will itself, as it may be accessed by unauthorized parties during probate. Instead:

  • Use a password manager (e.g., LastPass, 1Password) to store login details and share the master password with your digital executor or lawyer.

  • Store sensitive information in a safe deposit box or with a trusted legal firm, and reference its location in the will.

  • Consider using a digital legacy service (e.g., SafeBeyond) to manage posthumous access, though ensure compliance with Kenyan law.

6. Consult a Legal Expert

Drafting a will that includes digital assets requires legal expertise to ensure compliance with the Law of Succession Act and to minimize disputes. A lawyer can:

  • Ensure the will meets formal requirements under Section 11.

  • Advise on tax implications, as digital assets may be subject to estate duty under the Estate Duty Act (if applicable).

  • Help navigate platform-specific legalities, such as transferring online investments held through foreign platforms.

  • Store sensitive access information securely.

7. Regularly Update Your Will

Digital assets change frequently - new accounts are created, passwords are updated, or platforms evolve. Under Section 20 of the Law of Succession Act, you can amend your will via a codicil to reflect these changes. Review your will and digital asset inventory annually or after major life events (e.g., marriage, divorce, or acquiring new assets).

Challenges and Considerations

Including digital assets in a will under Kenyan law involves several challenges:

  • Privacy and Security: Sharing access information risks unauthorized access during the testator’s lifetime. Use encryption and trusted intermediaries to mitigate this.

  • Cross-Border Issues: Digital assets hosted on foreign platforms (e.g., Coinbase, Google) may be subject to international laws**, complicating access or transfer. Legal advice is essential.

  • Intestate Succession: If you die without a will, digital assets may be distributed under Part V of the Law of Succession Act, which follows a rigid formula and may not align with your wishes. For example, M-Pesa funds could be split among heirs, even if you intended them for a specific person.

  • Disputes: Lack of clear instructions can lead to family disputes, especially for high-value assets like cryptocurrency. Clear documentation and legal drafting reduce this risk.

Practical Example: M-Pesa in Estate Planning

Suppose Jane, a Kenyan businesswoman, has KES 200,000 in her M-Pesa account. To include this in her will:

  1. She lists the account in her digital asset inventory, noting the registered phone number.

  2. She stores the M-Pesa PIN in a password manager and shares the master password with her lawyer.

  3. In her will, she writes: "I bequeath the balance in my M-Pesa account, registered under +254 7XX XXX XXX, to my daughter, Mary. My executor is authorized to obtain necessary documents to access these funds, with access details stored with [Law Firm Name]."

  4. She appoints her brother as digital executor to liaise with Safaricom and obtain the funds.

  5. She consults a lawyer to ensure the clause is legally sound and updates her will if the account balance or beneficiary changes.

Conclusion

As digital assets become integral to personal wealth in Kenya, estate planning must adapt to include them. By inventorying your digital assets, appointing a digital executor, drafting clear instructions, and consulting a legal expert, you can ensure these assets are distributed according to your wishes under the Law of Succession Act (Cap 160). Proper planning not only secures your legacy but also prevents disputes and ensures your heirs can access valuable or sentimental digital properties.

For expert guidance on including digital assets in your will, contact us today at +254 716 708 104 or info@lawguide.co.ke for tailored legal advice.