Digital assets and their inheritance by the rightful beneficiaries are becoming an increasingly hot topic.
More and more often, we hear people close to us sharing shocking stories about how their loved one passed away suddenly in their prime and the family was not aware of their assets, or even if they were, they didn’t know how to locate and access them.
So, before answering the question “Can you inherit digital assets?”, let’s first define what a digital asset is.
What is a digital asset?
The simplest definition of a digital asset is anything that exists in digital format and comes with the right of ownership, right of use, and legal control.
Here you will probably ask yourself the question “Are digital assets property?”
The clear answer is “Yes.” Digital assets are property when people who own digital assets have rights over them (to sell, exchange, transfer, donate, destroy, etc.).
This leads to the question “If digital assets are property and can be sold, exchanged, transferred, donated, etc., can they be inherited?”
Can digital assets be inherited?
And to this question, the answer is “Yes – digital assets can be inherited, as physical assets can be, but with some specifics, owing to the lag in legislation regarding the development of digital products and services.
It is obvious that there are many gaps in the legislation, making most tech companies take matters into their own hands and try to regulate the matter of the digital legacy left by their deceased users. The data privacy laws and regulations on access to another individual’s personal digital assets further complicate matters.
Therefore, we should think about protecting our digital assets, especially now when the possession of digital assets is becoming an ever-growing part of our lives and when legislation cannot provide adequate protection.
How can digital assets be protected?
The best way to protect digital assets is through a digital inheritance service. The digital inheritance service enables digital assets owners to easily catalogue their assets, safely catalogue and store their important passwords, private keys, and any other credentials, and designate beneficiaries to them. So, should an unforeseen event happen to the owner, their digital assets can be seamlessly passed down to the heirs.
What Is Digital Inheritance?
Digital inheritance is the transfer of digital assets to beneficiaries after the death of a person as part of the deceased’s inheritance.
Digital inheritance allows your designated beneficiaries to be granted access to your digital assets and important passwords should an unforeseen event happen to you.
What are some examples of digital assets that can be inherited?
Digital assets that can be inherited are so-called transferable digital assets. These are usually assets that are owned, not licensed. Here are some good examples by category.
Digital financial assets:
- payment tokens, the purest form of cryptocurrency
- utility tokens, the digital version of the well-known vouchers
- security tokens, the digital representation of conventional securities such as company shares, bonds, etc.
- online investment portfolios and wallets
Digital intellectual property:
- registered trademarks
- copyrighted digital books, e.g., digital books generating revenue
Digital creative assets:
- photos, e.g., the royalties generated by them
- video files, e.g., video files generating revenue
- digital music files
Which digital assets cannot be inherited?
Some digital assets cannot be inherited. The main premise for this is rooted in the distinction between transferable and non-transferable assets. Individuals can transfer assets if they own them. However, when they have a licence to personally use the digital asset, they do not own it; therefore, the asset cannot be inherited.
Some examples of digital assets that cannot be inherited:
- Subscription services, such as Netflix and Apple iCloud
- Email accounts
- Social media accounts
How to make sure that the assets of your loved ones will be inherited
The best way to help in this not-so-easy task is to educate your family and friends on how to plan their digital legacy and how important it is to use a digital inheritance service and diligently create their own Will.
It’s imperative to help your family and friends understand that the average Internet user is active on the Internet every single day, opening new accounts and subscribing to new paid services. The failure to plan ahead might leave the ownership of their digital and financial assets to chance, and they might not reach the rightful beneficiaries.
Sooner or later, lawmakers will regulate the field of digital inheritance better, but they will not be able to solve the multi-billion-dollar problem of unclaimed assets globally.
Protecting digital assets via a digital inheritance service will help heirs to inherit the digital assets.