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Probate & Property

May/June 2024

Technology—Probate - New Year, New Tech: Technology and Estate Planning

Ross Bruch and Marguerite Weese


  • "Work smarter, not harder"—and find ways to become more efficient and prioritize tasks that move the needle.
  • Utilizing the proper software allowed attorneys to save time, freeing up more time in business development or educating and counseling clients.
  • Perhaps artificial intelligence and fintech will change the current pitfalls, but practitioners are left pulling these complex illustrations together using all currently available technologies.
Technology—Probate - New Year, New Tech: Technology and Estate Planning
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Technology—Probate provides information on current technology and microcomputer software of interest in the trusts and estates area. The editors of Probate & Property welcome information and suggestions from readers.

By this time of the year, our New Year’s resolutions may either be going strong or, more than likely, have started to fade into a distant memory.

Like many other working professionals, this year, I vowed to embrace that current favorite bromide—“work smarter, not harder”—and find ways to become more efficient and prioritize tasks that move the needle. As with all of these resolutions, this can be easier said than done!

A great place to start is by maximizing my use of both existing and new technologies.

A warning, though: Getting the intended efficiencies will require finding the ‘right’ technology tools, as the ‘wrong’ ones may make tasks take longer and create a more confusing process.

A great example of working smarter, not harder was examined in a prior article about estate document drafting software tools. Utilizing the proper software allowed attorneys to save time, freeing up more time in business development or educating and counseling clients. After all, estate planning is more than merely document preparation. It is coordinating what our clients own, how they want their assets to pass on to the next generation, and making sure the practitioners do so in the most tax-efficient way.

Along that continuum, there are many topics about which an attorney may need to educate their clients, ranging from basic estate plan terminology to complex wealth transfer strategies. Attorneys can utilize various tools and techniques to convey these concepts to their clients. But because each client learns differently, attorneys may need to use flow charts, diagrams, or calculations to illustrate a specific concept.

While these deliverables are helpful to the client, they may be time-consuming for the attorney to pull together. Whether the attorney is billing by the hour or charging a flat fee, time is our most precious resource. Automating these illustrations can help create efficiencies and consistency in the client deliverables. This article focuses on three key features that various software programs may provide to help estate planners modernize and digitize their practice.

Net Worth and Account Aggregation

No matter how large or small a client’s net worth is, you must have a solid understanding of the client’s balance sheet before planning. Estate planning professionals should have a clear vision about their client’s total net worth to discern whether or not federal or state estate taxes will be due following the client’s death. Other important information to know about includes how assets are owned or titled, identifying the assets’ tax characteristics, understanding the liquidity status of the assets, and determining what assets exist inside versus outside the taxable estate. Titling will inform incidents of survivorship as well as how an asset may pass at death. For example, joint assets with right-of-survivorship pass automatically to the surviving owner, but joint assets without this right may pass via a properly executed will. Retirement accounts, on the other hand, pass by beneficiary designation, and the account owner’s death triggers very specific required distribution rules that the beneficiary must follow.

For estate planners looking to provide holistic planning advice, the ability to perform an accurate liquidity analysis will lend itself to a conversation about the ability to pay estate taxes and other related expenses at death. Finally, it is imperative to know which assets may be included in an estate for estate tax purposes and which may fall outside the taxable estate to estimate directionally accurate estate tax. Given the information required to create a comprehensive plan, an estate practitioner may desire a clear, consistent format to display this net worth information and an easy or streamlined way to collect it. Using estate planning software may be one way to provide the attorney with this desired result.

Having a client’s financial information in one place and format will make a convenient reference page for advisors. This will help during initial planning conversations and when the advisor needs to refer to the client’s profile to check facts quickly. Basic static snapshots of this information can easily be built in Microsoft Word, PowerPoint, or Excel, but that does not always allow for the information to be easily sliced and diced to review the information with the necessary various lenses. Software tool Vanilla® promotes a balance sheet builder that can show a client’s entire financial picture and allows third parties—family members or other advisors—to upload information independently.

Inviting third parties to help gather relevant information may seem particularly appealing if you’ve been stuck waiting for clients to provide you with all their information. To address this hurdle, some software programs offer additional help. eState Planner advertises that it uses a built-in questionnaire to gather information, while tools like NaviPlan or eMoney market the capability of account aggregation, meaning they allow clients to connect financial accounts (investment accounts, checking accounts, loans, etc.) to save time and reduce errors. Although this may seem like the perfect solution, it has drawbacks.

Significant work is needed to connect each account, particularly if your client has several at various institutions. The software is intended to create efficiencies and reduce the time spent on data collecting. Still, the practitioner should be aware of potential connectivity hiccups if a client must change a password or if there is multi-step account authentication. A practitioner will also not gain any efficiencies using this software if the client has a significant number of assets that don’t have online accounts, such as private equity, businesses, or real estate, that must be manually tracked. For these reasons, these aggregation tools may be more appealing to those who are advising broadly on wealth planning than to an attorney who focuses on drafting documents.

Estate Document Summaries and Flow Chart Illustrations

Once an attorney understands a clients’ net worth and unique family dynamics, the next step is to help clients understand their current estate plan (which could be intestate succession if they don’t have any valid estate documents in place) and counsel them through their choices to reach their desired objectives. This process may involve walking a client through each estate document and illustrating how different estate vehicles, such as trusts, work as part of the larger picture. Advisors often rely on document summaries and flow charts to illustrate these points because they are much easier for clients to comprehend and less intimidating than a thick stack of draft documents potentially filled with legal jargon. Flow charts can also present options and show how estate tax ramifications depend on when and how assets are transferred.

Mark Twain famously said: “I didn’t have time to write a short letter, so I wrote a longer one instead.” Turning long documents into shorter summaries is hugely time-consuming, and translating words into graphics is even worse, making this an area that cries out for efficiency. In addition, if flow charts and other summaries are given to a client, the documents must have a polished look. Most advisors don’t have a marketing background or an understanding of how to best package materials. Using software to assist in this process could help advisors perform these tasks more efficiently and effectively. Depending on the client’s goals, several software options are available—each with some useful tools:

  • Luminary touts its ability to create dynamic, customizable visuals to illustrate a client’s existing estate plan, quantify transfer outcomes, and create one-page summaries of key terms and details;
  • Vanilla® boasts its ability to build estate visualizations using pre-built fact patterns, custom flows, and proprietary artificial intelligence engine; and
  • eState Planner states it allows an advisor to create a visual representation of a client’s estate plan in real time as the client describes the client’s wishes.

Once advisors find the one that best suits their client’s needs (and their skills!), they can more effectively walk a client through the decision points of the estate plan. Although these three programs are aimed explicitly at estate planning practitioners, other software programs, not necessarily marketed similarly, may still help with different needs, such as flow charts.

Lucidchart and SmartDraw are examples of this software. They market themselves as a diagramming application that brings plans to life by letting advisors visualize complex ideas, showing current and future states, and creating polished diagrams. Keep in mind that all of these technologies and software come with a learning curve. In some instances, an advisor will need to spend significant time understanding how to use them and integrate them into the advisor’s current practice.

Estate Tax Calculations and Wealth Transfer Illustrations

For advisors who serve clients with taxable estates, the ability to run estate tax calculations and show wealth transfer strategy illustrations is critical.

Many products—such as NumberCruncher, TigerTables, or zCalc—make performing directionally correct estate tax calculations relatively straightforward. As most estate practitioners know, tying estate tax calculations into a dynamic wealth transfer illustration can be tricky. Software tools such as eMoney and NaviPlan tout the ability to handle such complex scenarios, but these are both primarily financial planning tools with limitations. WealthTec combines the power of numbers with illustrations but does not integrate back with larger flow charts. For example, clients may want to understand the ripple effects if they irrevocably gift significant wealth using an LLC into a trust. Advisors can use software to help map out these consequences for the client, which will help clients better understand what that does to their income, estate tax, and ultimately to their heirs.

The efficiencies software programs can provide diminish as an estate plan becomes more complex and an advisor has to tie all the pieces together. Even though there are some shortfalls to all of the current technologies, advisors and practitioners may still be able to save valuable time using the different options available. All the software mentioned above can create certain efficiencies, but finding the best one for you takes time and testing.

Perhaps artificial intelligence and fintech will change the current pitfalls, but practitioners are left pulling these complex illustrations together using all currently available technologies.

Although I focused this article on only some of the features that may be used to help educate and counsel clients, this is not a comprehensive review of every module or tool. Many of the programs mentioned also include other ways to create efficiencies in an estate planning practice, such as client development, client records, billing, and communication, to name a few.

No one software does it all. And we all have to investigate the different software to see what is most tailored to our needs. So, if you—like me—aspire to work “smarter and not harder,” a little early homework will help make this year a happy one for yourselves and your clients.