The emergence of digital inheritance fintech services.
Digital Inheritance ?!
More or less everyone understands inheritance as the passing of assets to beneficiaries whom the owner has appointed.
Two hundred years ago, inheritance was a pretty simple process, as most people didn’t have complex assets. Even a bank account, insurance, and real-estate property were the privilege of the rich.
Nowadays, things have changed. Many people, even if not rich, have various assets such as life insurance, bank accounts, and a pension fund. People who work in startups and tech companies also have stock options or RSUs, and investment in company stocks is becoming a fashionable trend.
The problem is that many of these assets are digital and they change quite often. They are not static. Expats move from country to country and open new bank accounts; tech people move to new companies where they get RSUs and stock options in different asset vaults; people change their behavior, and one sunny day, a clerk of a company decides that he will be an investor and opens an account on an online trading platform.
Because of this dynamic behavior and the digital nature of assets, old fashioned inheritance and wills just don’t solve the problem. Imagine, for example, if you had to go to an attorney to create a new will or update your existing one each time your assets or list of beneficiaries changed. This would be an expensive and time-consuming process.
How, then, can people find an easy way to secure their assets and protect their families’ inheritance?
Ok, is it just a digital vault?
As this question starts bothering more and more people who own complex assets, including investment portfolios and stocks, they start thinking about asset protection.
The easiest way people try to protect their assets is to catalog them, either in Google Sheets or in digital vaults. While this is better than nothing, these tools still don’t cover you in some very simple and common life situations:
People lose access
It’s unrealistic to expect people to remember for decades the access you’ve shared with them. Things are even more complicated with elderly people or children. In this case, it simply doesn’t work.
An unforeseen event happens to the people with whom you’ve shared your access
In this case, all your asset information is simply lost, and your assets stay in the companies which store them.
You don’t feel comfortable sharing access to your assets
You might feel comfortable sharing access with your partner but not with your extended family members, for example.
Your beneficiaries need support
Your beneficiaries might need support in identifying, locating, and claiming your assets. This holds true if they are young children or elderly people, if they are not financially proficient, or simply because your assets are complex or in multiple countries.
Seeing that the sharing of Excel sheets and digital vault access can’t protect their assets, many people are turning to a new generation of tech tools designed for digital inheritance.
Digital inheritance tech tools combine a few distinctive characteristics:
Secure storage of asset catalogs
Usually, data is protected through encryption and also stored in secure data centers, rather than in public clouds.
Ability to designate beneficiaries
Usually, these are family members and close relatives. Typically, digital inheritance tools enable the user to choose whether the beneficiaries are to be informed about the assigned assets immediately or only in the case of an unforeseen event.
Mechanism for detection of an unforeseen event happening to the user
This is a critical aspect of digital inheritance – the ability to detect whether something has happened to the user. The tools usually implement multi-step processes to ensure that such an event is detected.
Additional support for the beneficiaries
As mentioned, this support is especially useful if the beneficiaries are not financially proficient, are elderly people or young children, or your assets are complex and in multiple countries.
Ability to notify the beneficiaries
If an unforeseen event is detected, digital inheritance services have the ability to automatically inform the designated beneficiaries.
Digital inheritance tools ensure that your loved ones will be automatically informed about your assets so they are aware of them and can identify them.
The last is a key difference between digital inheritance tools and other alternatives. Digital inheritance ensures that notification of the assigned beneficiaries will be handled even without external intervention, while the alternative methods rely on external activity – people have to have access and proactively access the information.
With digital inheritance, in the event of anything unforeseen happening to you, your loved ones:
- are aware of your assets
- can identify and locate your assets
- can minimize the chance of unclaimed assets.