Many items that used to be physical assets are now digital assets. People in previous generations may have had a library full of hundreds or thousands of books, but now a person may just have an e-reader with a collection of e-books they’ve downloaded. In the past, people may have spent thousands of dollars on video games and movies, buying up DVDs or cassette tapes. Today, they may simply have an online account where they’ve downloaded all these media products.
These are still a significant investment. As you’re making your estate plan, you’re probably going to put a lot of your physical assets into it, determining which child should get books, DVDs, albums, video games, CDs and much else. Do you also need to make a plan for the digital assets that you’ve purchased?
Have you actually purchased them?
One of the most important questions to ask at this time is whether you even own those assets. Many people think of digital products as things that they have purchased, but that’s not always the case.
For example, many companies will sell movies that can be downloaded to various devices. When people purchase a movie that they love, they believe that they own it. But what they’ve actually bought is a license. The parent company owns the movie, and the purchaser has bought a license allowing them to watch that movie whenever they want.
But because it is just a license, they don’t actually own the product. There’s no asset to pass to the next generation. Often, the fine print will note that even the license itself can’t be transferred to anyone else. It simply ends when the person passes away.
Things can get a bit complex when considering digital assets, and that’s just going to continue as these become more and more common. Be sure you know what steps to take when creating an estate plan in the modern era.
