Estate plans now adding digital content, tools, says survey

Wealth advisers will be incorporating more digital content into estate plans in the future.

But that still won’t replace the need for good old-fashioned communication.

More than two-thirds (69%) of estate and financial planners are now incorporating digital tools into their clients' estate plans, according to TD Wealth’s fourth annual estate planning survey. The digital content leading the way into estate plans in 2022 included blogs, social media and email accounts (71%), followed by passwords at 67%.

The survey said the escalation in the use of digital content and tools coincides with the spike in interest in digital assets like Bitcoin and other cryptocurrencies (61%).  The TD Wealth survey results also revealed that more than eighty percent (83%) of surveyed estate and financial planners said they use digital tools to support clients' estate planning, leveraging estate planning software (52%) and online wealth and/or estate planning platforms (48%), demonstrating that a majority of estate planning professionals are going digital to efficiently support their clients' needs.

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

Despite the increase in digital tools being added to the retirement toolkit, the survey also highlighted the longstanding need for communication between family members to solve – and prevent – estate planning problems.

According to the survey, 34% of respondents cited the designation of beneficiaries as the leading cause of family conflict in 2022, up from 17% in 2021 and 14% in 2020. To help mitigate family conflicts, the report said 84% of estate planners have encouraged clients to discuss their estate plans with their families and beneficiaries over the past 12 months.

"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."

Finally, the survey highlighted market volatility as the main threat to estate planning in 2022 (31%), up slightly from 22% in 2021 and 13% in 2020, primarily reflecting the financial losses related to the Covid-19 pandemic.

"In this current economic environment, people are wary that market risks may upend existing plans. 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," Walton said.

The survey of 142 professionals conducted by Maru/Matchbox on behalf of TD Wealth targeted certified estate planners, estate planning attorneys, trust officers, charitable giving professionals, insurance advisers, elder law specialists, wealth management professionals and nonprofit advisers.

[More: 4 ways to help clients control their digital afterlife]