Smart Solutions for Estate Planning: Navigating the Future of Legal Drafting

Introduction

We will cover the last article of the mini-series on legal document drafting. The focus of this article is estate planning documents.

Estate planning is a broad process that involves a strategic approach to organizing one’s assets in one's lifetime and beyond. Estate planning may have several purposes, including protecting assets against creditors, minimizing estate taxes, or smoothly transferring wealth to chosen entities. Estate planning documents include but are not limited to living trusts, wills, powers of attorney, advance directives, and so on.

As with any legal document, the nature of estate planning is a precise and meticulous endeavor. Therefore, it is of utmost importance that the documents flawlessly reflect an individual’s financial and interpersonal dynamics to achieve the individual’s end goal. Estate planning attorneys, however, may expedite and transform the process of estate planning document drafting with the integration of generative AI tools. This article will explore how AI can enable legal professionals to create ever-accessible and legally sound estate planning drafts.

Initial Drafts and Document Automation

Generative AI can aid legal professionals by providing an automated initial draft, which can serve as a solid foundation for future drafts, saving significant amounts of time. Two examples will be provided.

“Assist me in generating an initial draft of a last will for a client named [Client's Name]. Include provisions for [List of Beneficiaries], [Distribution of Assets], and [Appointing Executor].”

If we fill in the details, it should look something like this.

Prompt:

"Assist me in generating an initial draft of a last will and testament for a client named John Smith. Include provisions for his wife, Mary Smith, and his children, Mark Smith and Emily Smith, as beneficiaries. Distribute the assets as follows: 50% to Mary Smith, 30% to Mark Smith, and 20% to Emily Smith. Appoint John's brother, James Smith, as the executor of the will."

Response:

“Last Will and Testament of John Smith I, John Smith, of [Address], hereby declare this to be my last will and testament.

Article I: Beneficiaries I name my wife, Mary Smith, and my children, Mark Smith and Emily Smith, as the primary beneficiaries of my estate.

Article II: Distribution of Assets I direct the distribution of my assets as follows:

- 50% of my estate shall go to my beloved wife, Mary Smith.

- 30% of my estate shall go to my son, Mark Smith.

- 20% of my estate shall go to my daughter, Emily Smith.

Article III: Appointment of Executor

I appoint my brother, James Smith, as the executor of this will. He shall be responsible for administering my estate and ensuring that my wishes are carried out.

In witness whereof, I have signed and sealed this document as my last will and testament on this [Date].

[Client's Signature] John Smith

Please note that this is an initial draft and may require further customization based on your client's specific requirements. Feel free to reach out to me with any changes or additional instructions. Thank you for entrusting me with this task. I look forward to assisting you further in the estate planning process.”

Here is another example of drafting a living trust:

“Create a living trust initial draft for a client named [Client's Name]. Designate [Trustee's Name] as the trustee and include provisions for [Asset Management] and [Beneficiary Details]."

Let’s put this to use.

Prompt:

“Create a living trust initial draft for a client named Emily Johnson. Designate her sister, Samantha Johnson, as the trustee, and include provisions for the management of her real estate properties, investment accounts, and family heirlooms as part of the trust's assets. Additionally, outline the beneficiary details, specifying that upon Emily's passing, her two children, Ethan Johnson and Olivia Johnson, shall equally inherit the trust's assets as beneficiaries.”

Response:

“Living Trust - Initial Draft for Emily Johnson This Living Trust (the "Trust") is created by Emily Johnson, a resident of [City/State], on [Date].

Article I: Trustor and Trustee

Trustor: I, Emily Johnson, am the Trustor of this Living Trust.

Trustee: My sister, Samantha Johnson, is designated as the Trustee of this Trust. Samantha shall have full authority and discretion to manage, invest, and distribute the assets held in this Trust, subject to the terms outlined herein.

Article II: Trust Assets

Real Estate Properties: The Trust shall include ownership of my residential property located at [Address], and my vacation home situated at [Address]. Samantha, as the Trustee, shall have the power to lease, sell, or mortgage these properties for the benefit of the Trust's objectives.

Investment Accounts: All investment accounts, including but not limited to stocks, bonds, and mutual funds, shall be managed and administered by Samantha as the Trustee in the best interest of the beneficiaries.

Family Heirlooms: The Trust shall hold my family heirlooms, including jewelry, artwork, and sentimental possessions, for the preservation and distribution to my beneficiaries.

Article III: Management and Distribution of Trust Assets

Asset Management: Samantha, as the Trustee, shall prudently manage and invest the Trust assets to ensure their growth and preservation for the benefit of the beneficiaries.

Beneficiary Details: Upon my passing, my two children, Ethan Johnson and Olivia Johnson, shall become the beneficiaries of the Trust. Samantha shall distribute the Trust assets equally between Ethan and Olivia, ensuring each beneficiary receives their fair share.

Article IV: Revocability This Living Trust is revocable during my lifetime. I reserve the right to amend, modify, or revoke this Trust in whole or in part at any time and in writing.

Article V: Successor Trustee In the event that Samantha is unable or unwilling to act as Trustee, I appoint my brother, William Johnson, as the successor Trustee, to assume all duties and responsibilities outlined herein.

Article VI: Governing Law The construction, validity, and administration of this Trust shall be governed by the laws of [State/Region].

In witness whereof, I have executed this Living Trust on [Date].

Emily Johnson, Trustor

Please note that this is an initial draft and may require further discussion and revisions to meet Emily Johnson's specific estate planning needs and preferences. It is essential to consult with a qualified attorney to finalize and execute a legally valid and customized living trust.”

Legal Compliance and Updates

Artificial Intelligence tools, based on their database, can provide legal guidance to ensure that the estate planning documents are compliant with the relevant, up-to-date laws, jurisdiction, and regulations.

One can order the AI model to draft prompts that comply with specific laws or regulations that pertain to the estate planning document. Such include:

“Draft an estate planning document that complies with the latest tax laws and regulations for [Client's Name]. Include provisions for minimizing tax implications and maximizing asset preservation.”

One could ask

Prompt:

“Draft an estate planning document that complies with the latest tax laws and regulations for Mr. John Anderson. Include provisions for minimizing tax implications and maximizing asset preservation."

Response:

“Last Will and Testament of John Anderson

I, John Anderson, of sound mind and legal capacity, hereby declare this to be my last will and testament.

Article I: Beneficiaries and Specific Bequests

Beneficiaries: I hereby designate my beloved wife, Mary Anderson, and my two children, Michael Anderson and Emily Anderson, as the primary beneficiaries of my estate.

Specific Bequests: In addition to the general distribution of my assets, I specifically bequeath [Specific Asset/Property] to [Named Beneficiary], ensuring the fulfillment of my personal wishes.

Article II: Tax Minimization Strategies

To minimize tax implications on the transfer of my assets, I authorize the establishment of a testamentary trust in accordance with applicable tax laws. The testamentary trust will provide flexibility in managing assets and offer potential tax advantages for the beneficiaries.

Article III: Asset Preservation and Management

Recognizing the importance of asset preservation, I grant the Trustee of the testamentary trust broad powers to manage, invest, and diversify the trust assets. This includes real estate properties, investment accounts, and business interests, with the primary objective of ensuring the long-term growth and protection of the assets for the benefit of my beneficiaries.

Article IV: Appointment of Executor

I appoint my trusted friend, [Executor's Name], as the Executor of this will. [Executor's Name] shall be responsible for administering my estate, ensuring the proper execution of my wishes, and overseeing the distribution of assets as outlined herein.

Article V: Residuary Clause

All the rest, residue, and remainder of my estate, both real and personal, not otherwise disposed of in this will, shall be distributed among my beneficiaries in proportion to their respective shares.

Article VI: Revocation of Previous Wills

I hereby revoke any and all previous wills and codicils made by me at any time.

Article VII: Governing Law

The laws of [State/Region] shall govern the interpretation, validity, and administration of this will. In witness whereof, I have executed this document as my last will and testament, revoking any prior wills, on this [Date].

[Client's Signature]

John Anderson”

An alternate usage is to feed the language model with the current draft of the estate document and then request a comprehensive review based on how strictly it aligns with a particular law or policy.

It is important to note that AI language models typically have limited knowledge due to the cut-off on its update date. Chat GPT, for instance, at the very moment, has access to information only up to September 2021 and fails to provide real-time updates. One could inform the model of recent legal updates in relevant law or policies, direct the model toward incorporating real-world legal dynamics, and provide responses that align with them.

Error Detection and Risk Alleviation

Error detection is critical for spotting illogical or inconsistent elements of a legal estate document. Employing AI tools can mitigate risks and mistakes that can cause legal quarrels or challenges.

Example prompts are:

"Review the estate planning document for [Client's Name] and identify any potential legal errors or inconsistencies in the language used for beneficiary designations and distribution of assets."

or

"Assist me in detecting any inaccuracies or omissions in the estate planning document of [Client's Name], particularly regarding the appointment of the executor and alternate beneficiaries."

By providing sufficient details in the prompt for generative AI models, one can harness its ability to detect errors or inconsistencies within one’s work, evaluating the document’s accuracy.

Moving Forward

There are many other types of legal documents AI can assist in drafting. This includes legal letters and correspondence, discovery documents, legal memos, intellectual property documents, compliance and regulatory documents, and many more. Further exploration and use of AI tools in drafting such documents will enable lawyers and paralegals to broaden the scope of AI applications in their daily work.