With the rise in popularity of cryptocurrencies, and more particularly, Bitcoin, the question which isn’t immediately thought of by investors is: how do cryptocurrencies fit into your estate plan and have you accounted for them? KEZIA TALBOT, Legal Adviser, BDO Wealth Advisers sheds some light.
Whilst the Reserve Bank, in its Position Paper on cryptocurrencies, has determined that cryptocurrencies are not legal tender, this does not mean that the cryptocurrency which you own is not deemed to be an asset in your estate for all other purposes. Cryptocurrencies are, however, subject to the normal principles of income and capital gains tax, depending on the taxpayer’s intentions. Therefore, they will be treated as an asset in your estate for both executor’s fees and estate duty purposes, if your executor is even aware of the cryptocurrency which you own.
It would be tragic if, for instance, your entire estate comprised the ownership of several bitcoins, but your financial planner or attorney was not aware of this when assisting you with your estate planning and the drafting of your Will, and later on, when administering your estate, as this would result in your heirs receiving little to no inheritance, whilst your estate could be worth several hundreds of thousands of Rand.
Bearing in mind the anonymous nature of cryptocurrencies and the manner in which you hold ownership of the cryptocurrency, it would be virtually impossible for your executor to trace your holdings and properly account for them if they have not been brought to his or her attention. Furthermore, by not including your cryptocurrency in your estate plan, it will be likely that the liquidity calculations performed during estate planning will be inaccurate, thereby impacting on the estate administration process.
As the value of cryptocurrency, by its very nature, is volatile and not generally affected by the same events which affect traditional currencies, it will be difficult to calculate precisely what the effect on your estate will be, from a tax point of view. But this value should be assessed each time you meet with your financial planner, to determine the impact at that point.
So, how do you deal with cryptocurrency in your estate?
In order to understand this, it is necessary to go back to basics and understand how cryptocurrency transactions, and in this case, bitcoin transactions, work:
Satoshi Nakamoto, the creator/s of bitcoin, defines bitcoin as “a chain of digital signatures. Each owner transfers to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.”
Unlike traditional currencies, bitcoins do not exist in a physical form. Most bitcoin owners have bitcoin wallets, which reflect the value of your bitcoins. In reality, however, the wallet contains the keys to your bitcoins.
As the keys are crucial for transferring ownership or spending your bitcoin, it is the keys which need to be protected and practically dealt with by your executor.
If a key is lost or no longer accessible, then, in essence, you will have lost your bitcoin.
The challenge, therefore, is to make your executor aware of your ownership of bitcoin and to ensure that he or she has access to the keys.
Without delving into the technical aspects of this discussion, a few options would be to: make a backup copy of your wallet and store same on an external hard drive, which your executor will know how to access, or ensure that you have transcribed the access details for the wallet in a separate document, addressed to your executor. Both the backup and/or the document setting out your access details for your wallet will need to be stored in a secure place, only identified to your spouse, executor or other trusted person, as these details are tantamount to your internet banking login details.
Lastly, it may be necessary to review your current Will or have a new Will drafted, in order to ensure that you have nominated an executor who would be comfortable dealing with these types of assets, and to ensure that your wishes regarding these and other assets, are correctly reflected.
Earth 2050: memory chips for kids, telepathy for adults
An astonishing set of predictions for the next 30 years includes a major challenge to the privacy of our thoughts.
Buy 2050, most kids may be fitted with the latest memory boosting implants, and adults will have replaced mobile devices with direct connectivity through brain implants, powered by thought.
These are some of the more dramatic forecasts in Earth 2050, an award-winning, interactive multimedia project that accumulates predictions about social and technological developments for the upcoming 30 years. The aim is to identify global challenges for humanity and possible ways of solving these challenges. The website was launched in 2017 to mark Kaspersky Lab’s 20th birthday. It comprises a rich variety of predictions and future scenarios, covering a wide range of topics.
Recently a number of new contributions have been added to the site. Among them Lord Martin Rees, the UK’s Astronomer Royal, Professor at Cambridge University and former President of the Royal Society; investor and entrepreneur Steven Hoffman, Peter Tatchell, human rights campaigner, along withDmitry Galov, security researcher and Alexey Malanov, malware analyst at Kaspersky Lab.
The new visions for 2050 consider, among other things:
- The replacement of mobile devices with direct connectivity through brain implants, powered by thought – able to upload skills and knowledge in return – and the impact of this on individual consciousness and privacy of thought.
- The ability to transform all life at the genetic level through gene editing.
- The potential impact of mistakes made by advanced machine-learning systems/AI.
- The demise of current political systems and the rise of ‘citizen governments’, where ordinary people are co-opted to approve legislation.
- The end of the techno-industrial age as the world runs out of fossil fuels, leading to economic and environmental devastation.
- The end of industrial-scale meat production, as most people become vegan and meat is cultured from biopsies taken from living, outdoor reared livestock.
The hypothetical prediction for 2050 from Dmitry Galov, security researcher at Kaspersky Lab is as follows: “By 2050, our knowledge of how the brain works, and our ability to enhance or repair it is so advanced that being able to remember everything and learn new things at an outrageous speed has become commonplace. Most kids are fitted with the latest memory boosting implants to support their learning and this makes education easier than it has ever been.
“Brain damage as a result of head injury is easily repaired; memory loss is no longer a medical condition, and people suffering from mental illnesses, such as depression, are quickly cured. The technologies that underpin this have existed in some form since the late 2010s. Memory implants are in fact a natural progression from the connected deep brain stimulation implants of 2018.
“But every technology has another side – a dark side. In 2050, the medical, social and economic impact of memory boosting implants are significant, but they are also vulnerable to exploitation and cyber-abuse. New threats that have appeared in the last decade include the mass manipulation of groups through implanted or erased memories of political events or conflicts, and even the creation of ‘human botnets’.
“These botnets connect people’s brains into a network of agents controlled and operated by cybercriminals, without the knowledge of the victims themselves. Repurposed cyberthreats from previous decades are targeting the memories of world leaders for cyber-espionage, as well as those of celebrities, ordinary people and businesses with the aim of memory theft, deletion of or ‘locking’ of memories (for example, in return for a ransom).
“This landscape is only possible because, in the late 2010s when the technologies began to evolve, the potential future security vulnerabilities were not considered a priority, and the various players: healthcare, security, policy makers and more, didn’t come together to understand and address future risks.”
For more information and the full suite of inspirational and thought-provoking predictions, visit Earth 2050.
SAFTA awards get first streaming video nominees
The 2019 nominations for The South African Film and Television Awards (SAFTAs) were announced late last week, and for the first time in the 13-year history of the awards, a TV series produced for a video-on-demand service was in contention. The result was a surprise boost to streaming service Showmax.
The comedy series Tali’s Wedding Diary, which premiered in December 2017, represented a major step for the then two-year old streaming service. It was the debut Showmax Original, the first time Showmax ventured into producing its own content. The gamble paid off, with the show becoming the most watched of any series on its first day on Showmax, and now Tali’s Wedding Diary has been further recognised with seven SAFTA nominations, making it this year’s most nominated comedy.
“When we first floated the idea of Tali’s Wedding Diary, we joked about winning awards,” says Candice Fangueiro, Showmax’s head of content. “At that point, just getting our first Showmax Original off the ground was already a major challenge and it was more than we could hope for to actually hit it out of the park. I was stunned when I heard the news about the nominations – it’s amazing to be considered in the same company as these other shows and thanks to this we’re already seeing a fresh spike in Tali views.”
Tali’s Wedding Diary was also a first for co-creator and star Julia Anastasopoulos, who until then was best known as YouTube star SuzelleDIY. “I am so thrilled about the SAFTA nominations for Tali’s Wedding Diary,” says Julia, who is up for Best Actress – TV Comedy and Best Achievement in Scriptwriting – TV Comedy, along with her husband Ari Kruger and Daniel Zimbler.
“It was such a big and daunting step to create a full TV comedy series and intro a brand-new character. I really didn’t know how it would be received and am so happy to have received such positive feedback for the show and the Tali Babes character, along with the nominations. It feels so good to be recognised for something we poured our hearts into. None of it would have been possible, of course, without the incredible hard work and vision of my husband Ari and the incredible team, cast and crew that were part of the show. And a huge thank you to Showmax of course for making it all possible. Congratulations and best of luck to the entire team and to all the other nominees.”
Tali’s Wedding Diary is a mockumentary that follows Tali, a self-obsessed Joburg princess who’s moved to Cape Town and is planning her wedding to property-agent fiancé Darren (Anton Taylor). The series was inspired by Julia’s own wedding to Ari, her SuzelleDIY and Tali’s Wedding Diary co-creator, who is also up for Best Achievement In Directing – TV Comedy.
In addition to Julia and Ari’s nominations, Tali’s Wedding Diary is up for Best TV Comedy, Art Direction (Keren Setton), Cinematography (James Adey), and Editing (Richard Starkey). Winners will be announced on 2 March 2019 at Sun City Superbowl.
Following the success of Tali’s Wedding Diary, the second Showmax Original, The Girl From St Agnes, was released earlier this month. A third Showmax Original, Trippin With Skhumba, is slated for release at the end of February.
“With three Showmax Originals now under our belt and more on the way, we’d like to think this is the start of many more SAFTA nominations for shows from a streaming service,” concludes Candice.
South African content currently on Showmax has 110 nominations and includes the most nominated movie (Five Fingers With Marseilles), telenovela (The River), drama (Lockdown) and soap (Isibaya), with more SAFTA nominees scheduled for the coming months.