Digital assets are becoming more and more common. Thirty years ago, someone may have owned a closet full of VHS tapes; now they have a digital library they can access on their smart TV. What used to be a stack of CD cases is now just a folder of music on your phone. In short, just owning the files has become common since it’s easier than owning physical items if you don’t need them.
But what if you’re making an estate plan. You could have left thousands of dollars in tapes, records, CDs or DVDs to your heirs. If you bought digital assets for the same amount of money, or even more, can you leave them to your beneficiaries?
As a general rule, you don’t even own them
There are exceptions to everything, but the best rule of thumb with digital assets is to remember that you don’t own them at all, so you can’t pass them on.
When you buy a song or a movie, for instance, you often just buy a license. Under that license, you can use your account to access the file whenever you want to do so. This feels like ownership, but you only own the license. You’re not allowed to pass that license on to someone else, per the terms you agreed to during purchase.
So, while you may have invested thousands of dollars in these forms of media, you never really bought anything and you have no digital assets to put in an estate plan. If this comes as a surprise, that can help you see why it’s so crucial to carefully consider all of your rights and options when making your estate plans.