Estate Planning in an Online World

Estate planning in an online world

In what is hardly a unique situation in an age defined by increasing reliance on technology, there are numerous online providers who offer access to programs that allow users to create many of their estate planning documents independently, online.

While these “Will-kits” and other estate planning “how-tos” may be more convenient, there are several risks that users should weigh against the potential benefits before signing up to create their estate planning documents online.

  1. Estate planning in a nutshell

Conventional estate planning usually involves a client giving verbal or written instructions to a lawyer, who then prepares a will, advance care directive (for medical decisions if you are unable to make such decisions), and power of attorney (for financial decisions if you are unable or wish someone else to make such decisions). Throughout this process, a good estate planning lawyer will advise the client on how and when to use the documents and explain the process of probate (the legal process authorising an executor to distribute assets and pay liabilities following a person’s death in accordance with their Will).

The lawyer will also advise the client on how best to strategically draft the documents and give effect to their wishes as well as to try to ensure that their estate is properly managed, with no issues further down the line. Once the documents are prepared, the client is then shown how to properly physically sign them. This is often done at the lawyer’s office and the lawyer can then take on the responsibility of storing the documents until they are needed.

  1. Online estate planning in a nutshell

There are now many online providers of estate planning services, but they generally follow a uniform process. Online estate planning will usually involve the user accessing a Q&A style program to extract the information the program needs to populate their documents. An example would be the program asking who the user wants to leave their estate to, and the user entering in their child or spouse’s name. The program will then input that information into a template document so that it creates a (mostly) tailored electronic copy document with the data incorporated into it.

  1. Benefits of using online estate planning tools

As is the case with many resources that are moving online, the main benefits of online estate planning tools are that they are cheap, convenient, and easy to access and use. In general, online providers do not involve someone manually drafting the documents.

Online tools are also usually quicker than a lawyer, because once a user has entered all of their information, the program is able to generate a document virtually instantaneously. There is also a degree of convenience that online tools boast which a lawyer will often struggle to match.

For some, there is even an emotional benefit to estate planning. Getting one’s affairs in order will often require confronting disturbing questions about relationships, death, and finances. The prospect of discussing those topics with a lawyer and being vulnerable with someone who may be a complete stranger can be challenging, and online estate planning tools allow users to avoid such conversations.

  1. Risks of online estate planning tools

There are many drafting issues that are common with “Will-kits” and other online estate planning tools. Most online programs cannot detect mistakes made by the user when they input information, and these can potentially be more serious than simple spelling errors. Often online-drafted documents contain issues where the wishes of the author are insufficiently expressed, a common example being charitable donations where the charity is improperly identified. A will which says the person wants to leave money to “cancer research” will likely cause executor difficulties because there are so many organisations which might satisfy that criterion. Online estate planning tools rarely have the capability to identify these and other kinds of mistakes because they simply replicate in the data entered by the user and do not critically examine that information as a lawyer would.

Another common issue with online estate planning is that the service provision essentially stops once the document has been drafted, with no guidance for the user as to what to do with the document they have been given. This is especially problematic for wills because they have very strict requirements for execution which are easily overlooked. Improperly executed wills are typically rejected by the probate registry, so the fact that online estate planning tools do not guarantee proper execution poses serious issues for the will’s validity.

Part of why such issues are very common with online estate planning tools is simply the lack of guidance provided. A lawyer cannot only answer questions, but can also draw to their client’s attention matters which are extremely important which would otherwise potentially be missed. Because the most common method of guidance online estate planning tools use is essentially a written guide, the onus is placed on the user to conduct their own investigations and proofreading, rather than a professional who is skilled in critically examining and drafting the documents.

  1. Overall comments

For people with straightforward requirements in their estate planning, online resources may prove helpful. However, this is provided that their needs are straightforward enough to suit the non-specific templates provided by online estate planning tools (which, in our experience, is uncommon), and the user is extremely diligent in how they conduct their research and drafting.

Nonetheless, it cannot be overstated that there are inherent risks in preparing one’s own estate planning documents with little expertise. Estate planning specialists will usually provide a significantly more tailored and comprehensive estate planning package and will be able to assist with more than just drafting the documents, being able to assist with probate, storage, and simply being able to answer any question the client may have.

It is also entirely possible to combine the best of both conventional and online estate planning. There is nothing wrong with drafting documents using online tools then seeking a review and advice from a layer to ensure the documents are in order.

Should you require any advice or assistance in your estate planning, feel free to contact one of our succession specialists, Peter Charatsis, William Last, Ashlee Provis or Clairissa Hewitt.

Published 3 August 2022

The above is general in nature and is not intended to, and does not, constitute professional advice.