What are digital assets exactly?
Before talking about what happens to digital assets after a person passes away, let’s clarify what we mean by digital assets.
We don’t mean accounts on social platforms or email providers. The reason is that in recent years these types of social and email platforms have established procedures for the recovery or closure of the accounts by relatives in the event of the death of the owner.
These accounts are also very visible to the closest family and friends who share the same social platforms or exchange emails.
The primary types of digital assets that we’ll discuss here are digital financial assets, such as accounts in investment or online trading platforms, digital wallets, insurance policies stored in InsurTech services, company stocks and stock options, to mention a few of the most common types.
The situation with these assets is exactly the opposite to social and email accounts.
- First, your loved ones often have poor visibility into these digital assets. Unlike on Twitter, Instagram or Facebook, you don’t share that information publicly.
- Second, quite often the procedures for relatives to get ownership of these accounts in the event of the owner passing away are obscure, to say the least.
These are the primary reasons we’ll focus on exactly what happens with digital financial assets when a person dies. While these assets are often really important for maintaining the quality of life of the family members who depend on them, claiming their inheritance can be an obscure and difficult process.
Why inheriting digital assets is difficult
- The first reason why inheriting digital assets is difficult is that the family members often have poor transparency into these assets. The reasons are various – the assets are stored in different online systems, platforms and wallets, the family members are in different countries, etc.
There is poor transparency into digital assets stored in various online platforms and wallets.
- The second big reason why inheriting digital financial assets is difficult is that even if your loved ones know where the assets are, accessing them is far from simple.
Digital financial assets are protected by user names and passwords, and often multi-factor authentication (MFA) on top of that. One time passwords (OTPs) are often used when these systems detect login attempts from different computers or IP addresses.
Digital financial assets are often protected by strong authentication requirements, which might prevent the family members from getting hold of them if they don’t have the access details.
In addition to these technical difficulties in accessing digital financial assets, there are also legal ones. The terms and conditions of these systems often prohibit people other than the owners of the accounts themselves from accessing them.
Legal constraints in the terms and conditions of online platforms and wallets might also prevent family members from accessing them.
Considering all of these difficulties in inheriting digital financial assets, it’s reasonable to ask what happens with these assets when you die.
So what happens to digital assets when you die?
The skyrocketing number of unclaimed assets provides a very clear answer to that question.
There are many stories, most of them quite shocking, about banks and other financial institutions keeping the assets of deceased people, instead of transferring them to the rightful owners.
These stories provide a vivid picture of what happens to digital assets after the owner dies. In many cases, they simply stay in the services and platforms which store and manage them.
In many cases, even big global banks “forget” to transfer these assets to the rightful owners and even to declare them as abandoned assets.
How to protect your digital and financial assets
Digital inheritance services provide an easy and convenient way to protect your digital and financial assets.
They enable people to securely catalogue their assets and designate their loved ones as beneficiaries as they wish. The best part of services such as DGLegacy® is that they detect when fatal events have happened to the owners and proactively notify the designated beneficiaries about their assigned assets. They also give beneficiaries all the necessary information and documents provided for them by the asset owner.
Digital inheritance services detect when fatal events have happened to the owners and proactively notify the designated beneficiaries about their assigned assets.
Family members should not have the burden of remembering Google Sheets links. All the information is automatically provided for them, which enables them to identify, locate and access the digital financial assets.
Also, in contrast to estate planning, for example, digital inheritance services enable asset owners to easily keep their asset catalogue up to date.
As we’ve already seen, estate planning provides little protection for your assets, even if it is prepared by the best attorneys, simply because asset catalogues change dynamically and estate plans soon become obsolete. A “catch-all” clause in your estate planning is of little value if your loved ones don’t know what and where “all” is.
Try protecting your assets for free now – it’s easy and secure with DGLegacy®!