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The #1 financial planning risk you might be overlooking

October 8, 2020
Young family discussing the #1 financial planning risk

Financial planning

In personal finance, almost everyone understands financial planning as an overall plan for how to achieve certain financial goals. The plan might include using various financial tools such as investing in stock markets, buying company stocks through various online trading platforms and brokers, creating portfolios with various financial instruments like ETFs, savings accounts, and a reduction in spending.

Most of these methods have been known for years, but there is one major risk which most financial planning strategies fail to address. This financial risk is related to a simple question: who would inherit your stocks and investment portfolios if anything happened to you?

Or, in other words, are your family members aware of your portfolio of stocks, company shares, and other assets? Can they identify and locate them?

Are your family members aware of your assets, and can they identify and locate them?

Many people focus on achieving their financial goals, but too many of us forget to ask the simple question, who will benefit from our achieving these goals if anything were to happen to us?


Are traditional wills a solution?

Traditional wills have inherent problems such as being costly and bureaucratic. But above all, they have one additional drawback which makes them inadequate for protecting us against this risk. These days, people’s assets are very dynamic. People take out a new insurance policy, buy a property, decide to buy stocks of a new company, open a new bank account, etc.

This is very different from 50 or 100 years ago when the majority of people’s assets were static for their entire lifetime. Wills are perfectly suited to such a static environment, but they can’t help nowadays when people’s assets are so dynamic.

This means that even if you make a will with very skilled attorneys, this testament will be of little value to your family if most of your assets are not reflected there. And this is not a fault of the attorneys – it’s just that your assets change often, and the picture 30 years from now will be very different from their snapshot today.

Traditional wills can’t effectively protect a dynamic asset portfolio.

And because traditional wills are costly, time consuming and bureaucratic, you simply can’t amend your will every 6 months. The problem is becoming even more complicated as many people these days own assets in different countries or are expats who live in different countries and own assets there.


Then what will happen to my assets?

Even if you have the best financial planning, if you don’t include proper asset protection, your assets will simply stay in the asset management company which stores them. The reason is that in most countries around the globe, companies which hold your assets, such as banks, insurance providers, and online trading platforms, don’t have the legal obligation to notify your family members about your assets if anything were to happen to you.

Companies holding your assets don’t have the legal obligation to inform your family members about your assets if something were to happen to you.

And this holds true even if these companies are aware of your beneficiaries and have their contact details. They are not obliged to notify your family, and as a result, your money stays with these companies, instead of reaching your family.

You’ve achieved your financial goals, but now someone else is benefiting from them.


How big is the problem?

Quite big, actually. Currently, so-called unclaimed assets have reached $100B in the USA and are increasing at an alarming rate of $5B per year. In the UK alone, they are £77B. Worldwide, we are talking about a trillion-dollar problem, which is growing every year.


Including financial protection in your financial planning.

To avoid that risk, it is vital to include proper asset protection in your financial planning.
The digital inheritance service DGLegacy provides an easy and effective mechanism for doing that. The service enables people to catalog their assets in a secure and encrypted environment, to designate their family members as beneficiaries, and to indicate whether the family members are to be notified at the moment of designation or only if something happens to the user.

And most importantly, DGLegacy has a custom-engineered Heartbeat protocol which detects whether something has happened to the user. Upon detection of such an event, the service notifies the beneficiaries about the assets assigned to them. DGLegacy uses both email notification and phone call confirmation for each of the beneficiaries to ensure that they are aware of the assets and can identify and locate them.


What additional financial protection does DGLegacy offer?

The asset protection and digital inheritance service DGLegacy offers many additional capabilities to further ensure the financial protection of people’s assets and the financial security of their families. Such capabilities include legal packages for each of the beneficiaries to guide and inform them in the process of identifying and locating the designated assets, legal packages to support them in the process of claiming the assets, and insurance packages and other capabilities to ensure peace of mind, enabling people to protect their assets and ensure their families are secure when it matters the most.


Peter Minev
Co-founder of DGLegacy®, the digital legacy planning and inheritance app that protects your assets and secures your family when it matters the most. Author of the book Building TECH. Learn more: https://topstrengthener.com/about-the-book/