Does it make sense to try and use AI tools for estate plans? The author of this article suggests that the answer is "no," and explains why.

As regular readers will be only too aware, artificial intelligence – however you define it – is the hot topic of the moment. And there are many industries, occupations, and sectors that AI might disrupt, enhance or otherwise affect. In this article, a familiar writer in these pages, Matthew Erskine, managing partner for Erskine & Erskine, the legal practice, argues why he thinks that AI should not be employed when it comes to estate planning. Erskine is unafraid to tackle controversial or unusual topics, such as this article about firearms and estates. 

The editors are pleased to share this content and contribution to debate. The usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com

Experts  are raising the alarm – artificial intelligence (AI) will replace lawyers when it comes to estate planning. There are risks to doing any estate plan with AI, but this is especially true for people who own family businesses, for artists and art collectors. 

Five reasons why AI should not be used for estate planning
Estate planning is about control. How will your assets and possessions be distributed after you pass away? How to manage your care and assets if you become incapacitated and unable to make financial or medical decisions? Estate planning is complex and time-consuming for a reason – you are trying to anticipate future events that could jeopardize your control on a very personal and often emotional level. With the rise of AI, some people may be tempted to use AI tools to simplify the drafting of their estate plans. However, there are several reasons why you should not use AI for this purpose.

First, estate planning is a highly personal process, requiring careful and thoughtful consideration of your unique circumstances and goals. While AI tools may be able to generate documents quickly and efficiently, they are, by definition, impersonal and generic. AI can detect patterns based on what has happened in the past, it isn’t able to anticipate probable events of the future. To get personalized attention and expertise, requires hiring an individual estate planning attorney.

Second, estate planning involves tax, legal and financial considerations that require specialized knowledge and expertise. While AI tools may be able to provide basic information and guidance, they cannot replace the experience and expertise of a practicing attorney.

Third, estate planning involves your sensitive and confidential information that should be kept private and secure. While AI tools claim to be secure, there is always a risk of data breaches and cyber attacks that could compromise your personal information.

Fourth, estate planning involves complex tax, legal and financial concepts that require careful analysis and interpretation. While AI tools may be able to analyze data and provide recommendations, they do not provide the same level of critical thinking and analysis that an individual attorney can.

Fifth, estate planning involves ethical and moral considerations that require careful consideration and reflection. While AI tools provide objective data and analysis, they cannot provide the same level of moral and ethical guidance that an estate planning attorney can.

Five reasons why AI generated plans are not suited for family business
While all these reasons apply to any estate plan, it is particularly true regarding succession planning for family enterprises. Planning for succession of ownership as part of the overall estate planning of the family enterprise is often plagued with communication issues, lack of preparedness, personal conflicts, and misunderstanding. Added to this is the interaction with the management and operations of the enterprise, and the impact of economic and political forces outside of the enterprise.  

There are five common family dynamics in family-owned businesses
First, the disparity between family and business goals: Family-owned businesses often have most of their assets tied up in the business, and much of the conflict arises due to a disparity between family and business goals. Estate planning requires careful consideration of both family and business goals, and AI may not be able to align these goals and formulate a strategy for reaching them.

Second, the difficulty in letting go of the family business: The transition phase of a family-owned business can be the most difficult, as many entrepreneurs experience great difficulty in letting go of the family business. Estate planning requires careful consideration of the emotional aspects of succession planning, and AI may not be equipped to address these emotional considerations.

Third, complex family relationships: Family-owned businesses are often subject to complex family relationships that can impact estate planning. For example, sibling rivalries can create challenges when it comes to succession planning. AI may not be able to fully understand the nuances of these relationships and make appropriate recommendations.

Fourth, unique family goals and values: Family-owned businesses are often driven by specific goals and values that are unique to the family. These goals and values may include preserving the legacy of the business, maintaining family control, or ensuring the wellbeing of future generations. AI may not be able to fully understand and incorporate these goals and values into the estate planning process.

Fifth, the lack of business planning and company policies: Family-owned businesses are more likely to face employment-practices liability claims and director and officer liability. These issues can be exacerbated by a lack of business planning and company policies. AI may not be able to provide the level of risk management that is necessary for effective estate planning.

Family-owned businesses should consider these limitations when deciding whether to rely solely on AI for their estate planning needs and should seek the guidance of human professionals who can provide personalized attention and expertise.