What are the benefits of using an asset protection service?
In our post about “Asset protection and why you absolutely need it,” we discussed in detail what asset protection is. An important clarification that we made is that asset protection is not only a privilege of the rich but also for others. Failing to inherit a $100K bank account, life insurance or retirement plan might not be a big deal for a multi millionaire, but for a not-so-rich family, that might make the difference between maintaining their quality of life and living in dramatically altered circumstances.
The two most important benefits of asset protection that we want to achieve are:
- Protecting our assets
Protecting our assets means that our assets wouldn’t lose their value if an unexpected or undesired event happened, just as real estate insurance protects the value of a property.
- Ensuring that our loved ones will inherit our assets if anything happens to us
Our asset protection service needs to ensure that not only will the value of the asset be preserved but it will go into the hands of our loved ones if anything happens to us.
With these two primary benefits – protection of the value in the case of an unforeseen or undesired event, and transition to our heirs – we simply want to ensure peace of mind.
The biggest benefit of asset protection services is ensuring peace of mind.
Let’s see what typical problems these benefits of asset protection services solve.
What are the problems an asset protection service solves?
Asset protection services aim to solve some specific problems. Let’s have a look at them.
Problem 1: Assets losing their value or getting lost
This can happen to practically any asset – a bank account, retirement plan, company stocks, real estate – and, most importantly, also to us! Let’s see some examples:
- High inflation might diminish the value of our savings in bank accounts.
- A catastrophic weather event might damage or completely destroy our real estate.
- An economic crisis might diminish the value of the stocks in our investment portfolio.
- A populist politician might bring such harm to a country that people’s retirement plans are eroded.
Problem 2: Lost asset possession
I guess you wouldn’t be happy if your car preserved its value but was stolen and someone else became the owner.
The same applies to any asset, not only your car. But you might wonder how someone could steal your apartment or life insurance. Isn’t that impossible?
The answer is that it’s possible and quite easy.
The reason is that most companies which store your assets don’t have any mechanism for notifying your family members if anything were to happen to you.
Unfortunately many of them don’t even provide a mechanism for appointing beneficiaries. Think about your bank account, investment portfolio, cryptocurrency wallet, etc. Do they contain information about your beneficiaries? In most of the cases, the answer is no.
What are the shortcomings of traditional asset protection services?
You might say, “If the companies which store my assets don’t have a mechanism to designate beneficiaries and to inform them if anything happens to me, then at least the asset protection service should provide that.” Unfortunately, that’s not the case.
The biggest shortcoming of traditional asset protection services is that most of them don’t have the legal obligation to inform your beneficiaries if anything happens to you – just the same as the companies which store your assets.
Most asset protection services such as insurance companies don’t have the legal obligation to proactively notify your family members if anything were to happen to you.
Now you can see how it’s quite easy for your assets to be “stolen” or, in other words, for someone else to be in their possession.
The companies which store your assets are not required to notify your family about the assets if anything happens to you, and traditional asset protection tools such as trusts and insurance policies focus on protecting the value of the asset but not the ownership. They also aren’t legally required to proactively look for your family members and inform them about the assets so that your loved ones can claim them.
Many companies which store your assets will tell you to create a traditional will as an asset protection service. The problem is that wills have many limitations:
- Wills capture a snapshot of your assets and beneficiaries at a specific moment in time.
In reality, your assets are dynamic and constantly changing. Think, for a minute, what assets you had 10 years ago and those you have now. If you add to this the changing personal situation in people’s lives, for example, babies born and thus new beneficiaries, you soon realize that traditional wills simply can’t help here.
- Wills don’t provide a mechanism for notifying your loved ones.
Even if you make a will, that doesn’t solve the problem of notifying your family about your assets.
Wait, isn’t it a catch-22 situation? Your loved ones are not notified about your assets by your life insurance provider or bank; they tell you to make a will, but your will doesn’t actually provide a mechanism for notifying your family if anything happens to you. In addition, it has additional problems such as being outdated and expensive.
Yes, you are absolutely right: this is a catch-22 situation.
How big is the problem?
The famous Californian attorney James L. Cunningham, Jr. puts it well in his book Savvy Estate Planning: “According to CBS News, about $1 billion in life insurance claims goes unpaid every year. That’s because even though the insurance company knows you are dead, they have no affirmative obligation to reach out and pay the money to your beneficiaries. The beneficiary has to submit a claim, but if the beneficiary doesn’t know about the policy, that claim will never be submitted. The insurance company knows you have passed, they know who the beneficiary is, but if no one steps forward, the company holds on to the money. I find this shocking.”
$1 billion per year just in the United States and only for life insurance. How big is the problem of protecting all types of assets from these risks? It’s huge. So-called unclaimed assets approach $100B in the US alone. Latest reports for the UK show £77B. Globally, we are talking about trillions of dollars.
Globally, we are talking about a trillion-dollar unclaimed asset problem.
And the upward trend is alarming – a $5B increase per year in the USA alone.
What are the benefits of the DGLegacy digital inheritance asset protection service?
With the DGLegacy digital inheritance asset protection application, you can protect your assets against unforeseen events and ensure your family is secure. You can connect your preferred beneficiary with your preferred assets, and they will be notified at the time you choose – while ensuring they get the support they need in the process of claiming.
With DGLegacy, you can protect all types of assets. It is also easy to keep your list of assets and beneficiaries up to date.
This way, in the case of an unforeseen event, your loved ones:
- are aware of your assets
- can identify and locate your assets
- can minimize the chance of unclaimed assets.
This is achieved through the following easy steps:
- Catalog your assets
You catalog the assets that you want to protect via DGLegacy, providing the minimum basic information about the assets that will allow your beneficiaries to identify and locate them.
DGLegacy doesn’t ask for confidential information such as your bank account number, the value of your stock options, or financial account numbers!
- Designate beneficiaries and trustees
Beneficiaries are the people whom you appoint to be informed about the assets that you assign to them. These are usually your partner, your children or your extended family members, such as siblings and parents.
You might not want to share your asset information with your beneficiaries just yet. No problem. You can choose whether they are to be notified at the time you create the asset or only in the case of an unforeseen event.
If your beneficiaries are, for example, elderly people or children, they might not be proficient with the type of assets assigned to them. In that case, you can assign trustees for each of your assets in the DGLegacy application. If anything happens to you, they can help the beneficiaries to locate their assigned assets and claim ownership.
- Configure your Heartbeat protocol
The custom-engineered Heartbeat protocol of DGLegacy verifies that you are OK and detects whether anything unforeseen has happened to you.
It is a safe procedure which also aims to eliminate the possibility of false detections of unforeseen events. This is implemented through a multistep process described on the How It Works (link) page.
- Heartbeat protocol triggering (unforeseen event detection)
If there is no confirmation in response to any of the reminder emails or phone calls, the system detects that an unforeseen event has happened to you.
Then the notifications which you have configured into the system about the cataloged assets and the associated beneficiaries and trustees are triggered.
Unforeseen events happen. With the DGLegacy digital inheritance application, you can protect your loved ones and secure your assets when it matters the most.