In 2020, many people have completely stopped buying physical copies of music, books and movies. Instead of a library filled with paperbacks, you have thousands of books on a Kindle or an e-reader. Instead of a cabinet with a vast movie collection in tapes or DVDs, you just log into your account and stream movies on a variety of devices. Instead of stacks of CDs next to a stereo in your room, you just have 10,000 songs downloaded on your iPhone.
But what happens to that when you pass away? You may have invested thousands or even tens of thousands of dollars in those products. You could pass the physical assets to your children without a problem, as previous generations did. Can you do that with digital purchases?
You generally cannot, and there are two main reasons. First off, many digital “purchases” are just licensing purchases. You did not buy that copy of Star Wars. You just bought a license that allows you to log in and watch it whenever you want through your account. The same goes for other assets. The asset itself is still owned by the company, but they let you use it.
The second reason is that these licenses or even purchases typically come with a user agreement stating that you can’t transfer them to someone else. You are only buying them for your own use. Now, you may not think of it that way in practicality. Of course, you let your spouse or your children watch movies with your account. However, you can’t give them that account in your will.
Things like this can get complicated, so be sure you understand all of your options with estate planning.