Estate Planning Enters the Digital Age: TD Wealth

More than two-thirds of estate and financial planners in a new survey said they now incorporate digital tools into their clients' estate plans, TD Wealth reported Friday.

Seventy-one percent of participants said blogs, social media and email accounts have led the way into estate planning this year, followed by 67% who cited passwords.

The survey found the increase in use of digital content and tools consistent with growing interest in digital assets, such as Bitcoin and other cryptocurrencies.

"People want their financial planning to advance alongside their day-to-day use of technology and digital integration," Donna Walton, wealth strategist at TD Wealth, said in a statement.

The survey results also showed that 83% of estate and financial planners use digital tools to support clients' estate planning, with 52% leveraging estate planning software and 48% online wealth, estate planning platforms or both.

TD Wealth said these actions demonstrate that a majority of estate planners are going digital to support their clients' needs efficiently.

Maru/Matchbox conducted the survey in April, collecting responses from 142 estate planning professionals.

Fraught Family Dynamics

Family dynamics have become increasingly complicated, according to the survey. Thirty-four percent of respondents said designation of beneficiaries was the leading cause of family conflict in 2022, up from 17% last year and 14% in 2020.

In an effort to mitigate family conflicts, 84% of estate planners said they have encouraged clients to discuss estate plans with their families and beneficiaries over the past 12 months.

But only 15% of respondents reported that their clients directly raised the importance of bringing their family members and beneficiaries into the estate planning meetings.

This prompted estate planners to initiate inclusion in meetings of clients' families and beneficiaries, rather than leave the task to the clients themselves.

"Communication is critical in helping to reduce conflict among clients and their beneficiaries," Walton said. "The need to openly discuss the plan and its execution allows for better preparation and outcomes, while providing an opportunity to address any potential emotional or logistical concerns."

Estate Planning Challenges

As individuals and families contend with lingering pandemic-related financial losses, market volatility emerged in the survey as the No. 1 threat to estate planning in 2022, cited by 31% of respondents, up from 22% in 2021 and 13% the year before.

"In this current economic environment, people are wary that market risks may upend existing plans," Walton said. "Many believe that inflation could devalue assets or business and employment challenges could threaten expected income and reduce the size of the estate left to loved ones."

Document management is also growing more complex for clients and their independent legal counsel, according to the survey.

Thirty-one percent of respondents said power of attorney presents the most difficulty, 29% cited current wills and 20% said designation of guardian and beneficiary are most difficult.

Walton said clients and estate planners need to plan for unexpected events, such as law changes or family dynamics, in order to manage the increased complexity of estate planning.