The Digitalization of Estate Planning with Sharon Hartung
Updated: Mar 30
One of the highlights of the 2021 BC Estates Forum was the fireside chat with Sharon Hartung on the state of innovation in the estate planning ecosystem.
The BC Estates forum is always an insightful event. At the 2021 BC Estates forum, Sharon Hartung, a world leading expert on innovation in the estate planning sector, shared valuable insights on the impact of the COVID-19 pandemic on digitalization in the industry.
Her urgent message for financial advisors and other estate professionals? If you’re not prepared for the upcoming ‘digital tsunami,’ you haven’t been paying attention—and you just might get swept away.
What follows is a lightly edited version of Hartung’s talk.
The COVID-19 pandemic’s effect on digitalization
Sharon Hartung: “The pandemic numbers have been incredible in terms of online usage. There’s people already online and new users going online to do basic things like ordering groceries, dealing with financial institutions, or even registering for a vaccine. All these new accounts add to our growing list of digital assets. It's going to have an impact on estate planning and estate administration, first to manage, while we're living, and then for the fiduciary and their advisors to manage during incapacity or death.”
What’s changed in the last year with digital assets?
SH: “Prior to the pandemic, the average client didn't think they owned any digital assets, but now because of the pandemic, their online digital lives and expansive footprint have quadrupled. I've been warning the estate industry for the last several years of what I call ‘the digital tsunami.’ The simple fact is that the paper trail of physical assets and property rights was trending online long before the pandemic.
What’s changed in the last year with digital assets?
SH: “The pandemic has digitized the way we live and there's three basics we need to consider in terms of the impact on the advisor, their organization or estate firms.
The implication for executors and their supporting advisors is there's no more paper trail. I believe clients and beneficiaries will hold advisors and firms accountable for not sufficiently informing and bringing awareness of the digital assets to the client.
There's an obligation for every advisor in estate planning, regardless of profession, to address digital assets. They need to be planned in order for them to be accessible, or transferable. We need more options from service providers. I felt so passionate about that topic, I co-authored an article with Jennifer Zegel, for Bloomberg Tax Insight about some of the options and choices consumers need.
The last big reason is that given how digitally dependent our lives have become, it’s no longer acceptable to create a will and estate plan, and simply hope the executor figures it out. Paper based solutions, or simply a digital asset clause to address digital assets are the minimum starting point.
Clients are going to expect platforms and automated processes that need security and that are compliant with jurisdictional specific laws to address their growing digital inventories. That's the tip of the digital asset iceberg, so to speak. There's going to be further business process changes and innovation around this paper based industry, so it's up for a digital transformation.”
The risk of not digitizing
SH: “If we look at the digital transformation that we're entering into there are two basic pieces of it: we've got digital assets on one side of the equation, and then we have the estate industry on the other. There's a construct in information technology academia called “competitive advantage versus competitive necessity”.
Prior to the pandemic, it was a competitive advantage to consider automating things in some way. It could be as simple as getting a platform to share documents with the client or the type of communication that you use with a client. It might just be the front office staff engaging with the client before you get complex about anything in the estate industry.
Now during the pandemic we've seen that automation isn’t being used to differentiate yourself in the market; it's a necessity. If you aren't using a creation technique online with your clients or you don't have a website, you're going to fall behind. And the same thing is going to happen as the entire estate industry digitizes, so it's time.”
Where to start digitizing
SH: “When people ask where they should start, I usually say start with your own personal information technology. Are you current in terms of cybersecurity? Are you using some of these tools with your family and your friends? Then start looking at your business from a transformation perspective. It can be overwhelming sometimes when you look on social media because it looks like everybody's got everything and they're doing everything already.
What we do know historically from information technology implementation, it's really important to start small. Start something that doesn't have significant business values that you can work the kinks out or how to create a project to plan around, and then go from there.”
What clients will expect from their advisors
SH: “Now that clients have spent the past entire year getting comfortable online, they will have expectations that their advisors have gone digital too.
Clients will expect:
The same ease of use and convenience when dealing with advisors who leverage an offer and keep pace with technology. In other words, clients won't accept their instructions being taken with a pad of paper and transcribed.
More secure methods of providing sensitive information other than through email, and the ability to complete estate transactions online or on a mobile device with the same ease as they have at their financial institution.
Simplicity of digital signatures as they deal with the insurance and real estate sector.
And finally, they will look to their advisor to recommend or provide solutions that help them manage and keep up to date with this growing digital footprint.”
Thank you to Sharon for such an informative and thought-provoking discussion.
We look forward to being part of the solution in the ever expanding digital landscape of estate planning.
Create your EstateBox account today and enjoy a 60-day free trial (no credit card or code required) to help you get started on your life and legacy plan.
How Advisors Can Prepare Clients for the Great Wealth Transfer
While we’re passionate about all things estate planning, we’re not professionals. We recommend speaking with your lawyer or financial advisor when putting together an estate plan.
Follow us on LinkedIn, Facebook, and Instagram!