With assets worth millions of dollars, you know you have a lot of planning to do so that you can pass them on to the next generation. With physical assets — like an art collection — the key often lies in deciding if you should leave the assets themselves or sell them and leave the money. With purely financial assets, you just have to determine the best way to pass the money down, such as using trusts or just assigning specific payouts in your will.
But what about your digital assets? You may have spent thousands of dollars on songs, records, movies, video games and much more. Can you pass all of these to your children?
Usually, they’re not really yours
The general rule is that you didn’t buy any of these digital products. They’re not yours. You bought a license to use them whenever you want, forever. But you still don’t own them the same way you own a physical CD or a movie.
Say, for instance, that Amazon went out of business. They’d have no obligation to give you anything. Your library of thousands of movies would simply be gone. Those movies were owned by Amazon and hosted on their servers, and your license let you watch them whenever you wanted, but you only paid for the license. The same is true for any other large company that sells similar products.
Typically, the contract you sign with the company says that the license is only for you. It’s not possible to transfer it to someone else, so your library of digital products gets shut down when you pass away.
This just shows how complex estate planning can be and why you must know what steps to take to make sure that all of your assets get where you want them to be.