A New Way of Thinking for Estate Planning & Administration

Have you embraced Economy 4.0?

The new economy, propelled by innovative start-ups, is characterized by collaborative work environments and seamless technology integration. It has shown us the value of building a lean, flexible organizational structure, leveraging networks, and adopting new work methods. 

This new economic landscape is transforming the wills and estates space. Driven in part by advances in legal technology, the estate planning process is being streamlined and becoming more effective, convenient, and efficient for clients.

Advisors in the space embracing this paradigm shift are ‘on brand’, given legacy planning is all about forward thinking!

Current State of Wills & Estate Planning

• Will planning leans to being too transactional, reactive rather than proactive.
• Estate and financial planning remain siloed, resulting from disconnected advisors and a legacy mindset around collaboration.
• The proliferation of online DIY options challenges the value proposition for lawyers preparing wills.

The Paradigm Shift: A Holistic & Collaborative Approach + Technology①

• The client expectations baseline has shifted in the new economy - it requires a more holistic approach involving all of a client’s trusted advisors (see my “Advisors Unite” post), including identifying between them which advisor takes the lead role (taking ownership in the new economy vernacular), in order to deliver a truly effective, trusted customer experience.
• Estate planning is no longer viewed as a once-and-done task, or perhaps sprinkled with a few codicils - to help keep client’s planning relevant and current these days, effective estate planning needs to include a structured, regular review with clients to continually assess changes in their affairs, with their executors or beneficiaries, and the evolving legal landscape, .

• Technology supporting estate planning② is streamlining document drafting and review, providing for readily accessible and locatable storage of wills, enabling virtual execution of legal documents, and facilitating collaboration to help ensure client planning is comprehensive.

Empowering Executors

• Estate administration technology③ is also transforming how estates are managed, enabling executors and reducing the reliance on trust companies or other professional executor services, that typically rely on the allowable percentage of estate values for setting their fees.
• Empower executors by providing in the will for them to engage the support they may require to manage the estate, including legal and financial experts and a Certified Executor Advisor (CEA) to guide them throughout and help them manage the estate in a cost-effective manner.
• Get the 'right people' for the role of executors, changing when needed or when identified during regular planning reviews, and the estate will go from 'good to great (paraphrasing Jim Collins in his book Good to Great).

Future-Proofing Estates

• Bulletproofing estates by being strategic - considering the potential for conflict and looking to get ahead of it by communicating testator’s intentions, executor choices, and addressing if advances to some beneficiaries are to be trued up with the will (with family meetings or preparing letters of intention, or other ways to let intentions be known).
• Reframing will and estate planning as ‘legacy planning’ augments the process for clients and their advisors, setting it up to be a more comprehensive, strategic planning process.
• For estates prone to disputes, add an 'estate monitor' as a proactive measure to diffuse disputes (as a colleague frames the role, it’s the “Costco effect - having a checker at the exit keeps people honest"). The use of estate monitors for contentious estates is emerging as a practical, pragmatic option (more about this new forward-thinking role in an upcoming article).

The transformation of the wills and estates sector is well underway as part of the shift to Economy 4.0. Status quo in estate planning and administration clearly won't cut it anymore. I encourage all to embrace this seismic shift to a more collaborative, technology-enabled, proactive approach to estate planning and administration, for the sake of our clients and their stakeholders.

#EstateStrategies #GoodToGreat

Notes:

①  Excluded from this discussion is the potential for AI in estate planning,  including AI-powered drafting tools and predictive analytics. While it's still early with AI, it will impact estate planning. This will be a topic for a future post (this post "Revolutionizing Estate Planning" from @MarkMatos, financial advisor, addresses its transformative potential).

② A few notable leaders in the field include: eStatePlanner, Appara , and for US advisors I really like what I see Vanilla developing.

③ Estateably is my go-to app - an impressive Canadian startup leading the way in the estate admin side, along with Clio - Cloud-Based Legal Technology for matter management and enhanced client interaction features.

Image is from Unsplash's History in HD and is the Wright Brothers first controlled, sustained flight of a powered, heavier-than-air aircraft on December 17, 1903.

I apply my pragmatic, business perspective to estate planning and administration, to help ensure outcomes are optimized for beneficiaries:

• For executors, I am a co-pilot through the estate administration journey, for those that would prefer not to defer their role to a trust company that typically charges excessive fees.
• For contentious estate situations, I act as an estate monitor for either the executor or a beneficiary (the monitor role is relatively new in estates and trusts administration and is gaining traction as an effective means to defuse disputes and avoid litigation).
• For advisors helping clients with legacy planning, I am a resource to help coordinate gathering details of a client’s affairs that need to be incorporated in their planning, foster a more collaborative approach among all advisors, and when needed, an objective, candid estate strategist to help align stakeholder expectations.

𝘗𝘭𝘦𝘢𝘴𝘦 𝘕𝘰𝘵𝘦: 𝘛𝘩𝘪𝘴 𝘱𝘰𝘴𝘵 𝘪𝘴 𝘯𝘰𝘵 𝘪𝘯𝘵𝘦𝘯𝘥𝘦𝘥 𝘵𝘰 𝘤𝘰𝘯𝘷𝘦𝘺 𝘯𝘰𝘳 𝘪𝘮𝘱𝘭𝘺 𝘭𝘦𝘨𝘢𝘭 𝘰𝘳 𝘵𝘢𝘹 𝘢𝘥𝘷𝘪𝘤𝘦 - 𝘐 𝘢𝘮 𝘯𝘰𝘵 𝘢 𝘭𝘢𝘸𝘺𝘦𝘳, 𝘯𝘰𝘳 𝘥𝘰 𝘐 𝘱𝘳𝘰𝘷𝘪𝘥𝘦 𝘪𝘯𝘤𝘰𝘮𝘦 𝘵𝘢𝘹 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴. [𝘋𝘔 𝘮𝘦 𝘵𝘰 𝘳𝘦𝘧𝘦𝘳 𝘺𝘰𝘶 𝘵𝘰 𝘭𝘢𝘸𝘺𝘦𝘳𝘴 𝘢𝘯𝘥 𝘵𝘢𝘹 𝘢𝘥𝘷𝘪𝘴𝘰𝘳𝘴 𝘴𝘱𝘦𝘤𝘪𝘢𝘭𝘪𝘻𝘪𝘯𝘨 𝘪𝘯 𝘸𝘪𝘭𝘭𝘴 & 𝘦𝘴𝘵𝘢𝘵𝘦𝘴 𝘸𝘰𝘳𝘬.]