Digital assets are growing more common. In many cases, sellers are phasing out physical copies of different types of media. People are simply buying or downloading digital copies, instead.
There are countless examples of this, from video games to musical albums to movies and television shows. People will invest thousands of dollars in entertainment collections. In the 1990s, that meant buying physical copies. But in 2024, people may simply download or stream these files. What does this mean for their estate plan if they’re looking to pass their assets on to the next generation?
Digital assets may be exempt
One of the big issues that this is creating is that people sometimes discover that they don’t actually own their digital assets. This means that they can’t put those assets in their estate plan at all.
The stipulation is often made in the fine print. Someone may believe that they have purchased a movie when they have bought it through a digital service provider – such as Amazon. But they may actually have purchased a license, allowing them to watch the movie whenever they want for the rest of their life.
For the person who made the purchase, the practical effects are the same. They can watch the movie at any time, just like they owned it. But since they don’t own it and they’re not allowed to transfer the license to someone else, then they can’t pass the movie on as part of a media collection. The license simply expires when they pass away.
Estate planning in the future
It’s not just entertainment that is being impacted by the switch to digital technology. Even financial assets could be held in cryptocurrency, for example. It will be very important for people to continue to look into their legal options for estate planning in the future, as things get more complex.