Estate planning has traditionally been a paper-heavy and cumbersome endeavor. As it has with many activities, technology can streamline the process, increase security, and provide more options for customization. However, the estate planning industry is notoriously slow-moving, so many clients and even law firms are not fully aware of all the ways that technology can make the process of transferring your estate more efficient.
Storing Your Documents
Most people who have completed an estate plan are familiar with the large binder of documents and instructions provided by an attorney. Traditional methods of storage meant keeping such documents in a safe, safety deposit box, or sometimes even a shoe box in the back of a closet. Physical storage can be challenging as heirs must track down the documents and confirm no other, more recent, versions exist.
Digital platforms now offer encrypted, cloud-based storage for wills, trusts, power of attorney forms, and other critical documents. This not only enhances security, but also facilitates easy access and sharing among authorized individuals, such as family members and legal advisors. Storing your important documents digitally also means you will never have to worry about losing something critical to your plan.
If you already have an estate plan, you can scan your documents and save them to one of these digital platforms. Many attorneys now maintain their own database and can also store documents for you online.
One of the most important considerations for your estate is beneficiary designations. There are certain accounts, such as IRAs and 401(k)s that can pass to named beneficiaries automatically. If no beneficiary is named, the account may be subject to probate even if you have completed a trust. Life insurance and annuities also have beneficiary designations to ensure efficient distribution.
Historically, an individual would have to contact representatives and agents of firms where accounts or insurance were held. That process would be time-consuming, and the individual may not have been able to confirm the designation until a notice was received in the mail. Most firms now allow clients to review and update beneficiary designations online. This means a client can quickly review and update beneficiaries and confirm the details instantly.
Many families are spread throughout the country and the world. In the past, this would make coordinating estate planning meetings with multiple family members a logistical challenge and may have meant many weeks or even months of sending documents back and forth.
The advent of video conferencing tools has broken down geographical barriers, allowing clients to consult estate planning professionals without being in the same location. In video conferencing sessions, members of the family can review documents together, ask questions and even digitally sign when needed, potentially saving time and cost.
Digital Assets, Blockchain, AI and Beyond
The rise of digital assets like social media accounts, digital photos, cryptocurrencies, and online financial accounts has made digital estate planning increasingly important. Modern estate planning now includes securing and transferring digital assets, with specialized services available to help manage your digital legacy.
Though still in its nascent stage in the context of estate planning, blockchain technology and smart contracts hold promise for automating and securing asset transfers upon certain triggers, like the death of the asset holder. This could minimize disputes and ensure a smoother transition of assets.
Artificial intelligence (AI) is beginning to play a role in predictive modeling for estate planning, helping advisors and clients understand potential future scenarios based on current decisions. AI is becoming more useful in crafting and reviewing legal documents, though the oversight of an attorney is still highly recommended. While AI can’t replace human judgment and expertise, it can certainly assist in the decision-making process.
Technology has both simplified and complicated estate planning. On one hand, it offers tools that make the process more streamlined and accessible; on the other, it raises new issues, like digital asset management and cybersecurity, that require specialized knowledge. What is clear is that technology will continue to play a crucial role in shaping the future of estate planning, making it more efficient, secure, and adapted to our increasingly digital lives.