Estate planning touches upon the most personal aspects of consumers’ lives, enabling them to leave their belongings and assets to loved ones or important organizations after they pass.
Family legacies can involve prohibitive legal red tape and paperwork, and the time, resources and costs needed to manage such labor-intensive processes often mean consumers’ estate plans are out of sync with their financial realities.
Giving consumers the peace of mind that their legacies are continued in accordance with their wishes drove CEO Cody Barbo to co-found Trust & Will, a digital estate planning solution provider. Many consumers begin the process after major life events, like the birth of a child or purchasing a new home, to ensure their assets or legal guardianship of their children will be passed to family and friends should the worst occur, he explained. They then often place those documents in storage and forget about them.
“Half of the adult population in the U.S. who have estate plans often have one that is out of date,” Barbo said. “They set it up when their kids were born, or when they bought their first home, and it’s maybe sat in the office or garage or attic or basement for five, 10, 15 years. Quite a few things can change [in that time].”
This can create a legal gray area that is difficult to navigate. There is the question of who assumes guardianship of children in the event that parents pass away unexpectedly, for example.
“Who is legally appointed to look after your kids?” he asked. “It’s not necessarily godfather or godmother [who would take over guardianship]. It’s legally who you have appointed in a set of documents, once signed and notarized, to make it happen if something happens to you.”
Having additional children, selling or purchasing real estate or experiencing liquidity, such as selling stocks, all typically require that consumers update their wills and estates to ensure their legal documents accurately reflect their current wishes. They often discover the costs involved in such updates are more than they have or are willing to spend — between $500 and $15,000 depending on where they are in the country. Others do not realize their documents require updates or do not want to endure the hassle of updating them, Barbo explained, but digital estate planning solutions could ease this process.
Paying for Paper
One of the most common sources of friction in estate planning is a continued reliance on in-person meetings and paper-based application processes. Consumers interested in initiating such processes generally schedule face-to-face discussions with attorneys to go over their estates, then trust their attorneys to draw up customized estate plans. Many do not know those assessments are often created with the help of digital tools, Barbo noted.
“If you go to an attorney, they’re using a software,” he explained. “They say it’s customized, but it’s all templatized. It’s [created using] a decision tree.”
This means any client information gathered verbally or on paper — including the value of customers’ mortgage payments, how much they own in investments or their annual incomes — during in-person meetings is manually inputted into these specialized software systems, Barbo said. Consumers often wind up paying attorney fees for a consultation in which the results are determined by an automated process, which adds time to the estate planning process and passes more costs onto customers.
Trust & Will streamlines estate planning by cutting out the middleman — the attorney — to save customers time and money. It provides a digital platform with access to software that can help customers manage their wills on their own. The company does not charge initial consultation fees, and consumers need not schedule follow-up appointments to make changes to their estates, Barbo noted. They can go online for virtual consultations and subsequently review and update their information at their leisure.
“They can come back and make changes at any time in the future at a small annual subscription [fee] of $12 per year,” he said. “We’re not charging them an arm and a leg to make updates like an attorney would.”
Its aim is to ensure clients can update their documents as often as needed with as little hassle as possible. Digital estate planning solutions have been around since the dot-com boom, but Barbo said he thinks that technology that ensures these details are safe and secure as well as continued work toward legalizing digital estate management will go a long way toward making them appealing to more consumers.
Using AI to Legalize All-Digital Estate Planning
A major barrier that can hinder digital estate planning solutions’ adoption is that many U.S. states still require in-person meetings and paper documentation to process estate plans. These analog methods can take more time than necessary, however.
“When you look at the country today, all states, [as well as Washington,] D.C., still require a wet signature [written in-person in ink], in-person notary and/or witnesses to witness you signing this document,” Barbo explained. “Some states don’t require the notaries; some states don’t require witness signatures — it depends on [which] state you’re in.”
In-person meetings and paper applications are thus generally unavoidable, even when consumers have the tools they need to manage their estates online. This added requirement has become particularly burdensome during the COVID-19 crisis, which has many brick-and-mortar businesses shuttering to slow the virus’s spread. Changes may be just around the corner, though.
“One of the things … that we are going to continue to put resources toward, is that in January 2019 we completed the first electronic will in the state of Nevada,” Barbo said. “There was legislation that was introduced that requires remote online notary.”
Trust & Will’s digital remote online notary process relies on a Boston-based technology firm for artificial intelligence (AI)-enabled facial recognition technology, which verifies users’ identities via video calls. Consumers submit their government-issued identification documentations and go online, at which point the system scans their facial features, compares them to the submitted documentation and verifies whether those present in the video chats match their official IDs. Their biometric data is then stored in the cloud with a recording of the video session so all relevant information can be easily accessed for future reference.
Nevada is not the only state to have legalized digital estate requirements for faster and safer remote identity verification processes. Similar legislation passed in Indiana in 2019 and is underway in Arizona and Florida. Barbo said he believes many others will soon follow, giving the industry and its consumers hope that convenient, secure digital estate planning solutions may become widely available in the near future.