AI in Estate Planning: Opportunities and Cautions for Trustees

Technology is transforming nearly every industry, and estate planning is no exception. Artificial Intelligence (AI), including machine‑learning tools and generative AI like ChatGPT, is being used to draft documents, analyze investments, and assist in administrative tasks. While AI offers efficiency and new capabilities, it also raises ethical, legal, and practical questions—especially for trustees who must meet fiduciary duties. This post explores how AI is being integrated into trust and estate work and provides guidance on leveraging AI responsibly.

How AI Is Being Used in Estate Planning

Document Drafting and Review

Modern AI tools can generate drafts of wills, trusts, powers of attorney, and other documents. Some platforms allow users to create entire estate plans by answering a series of questions. AI can also summarize lengthy legal documents, extract key provisions, and flag inconsistencies. According to the American College of Trust and Estate Counsel (ACTEC), AI is increasingly being integrated into estate planning research and processes, helping to create legal documents, evaluate risk, assist with estate management, value assets, and plan taxes.

Risk Evaluation and Asset Management

AI algorithms can analyze historical market data, real‑time economic indicators, and portfolio characteristics to assess risk and suggest investment strategies. In trust administration, AI may help trustees monitor compliance with the prudent investor rule and identify asset allocations that align with the trust’s objectives. ACTEC observes that AI provides tools and insights for individuals to make informed decisions and preserve their legacies.

Tax Planning

AI can model future tax scenarios and evaluate strategies to minimize estate and income taxes. By simulating different gifting strategies, trust structures, and distribution timelines, AI may help trustees and attorneys identify optimal paths.

Administration and Compliance

Automated systems can handle routine tasks like generating annual reports, tracking deadlines, and monitoring trust expenditures. Integrating AI into administrative platforms can reduce errors and free trustees to focus on high‑level decisions.

The Allure and the Risks

Efficiency vs. Personalization

One reason AI attracts attention is its efficiency. It can draft documents or analyze data in seconds, reducing costs and turnaround times. However, estate planning is deeply personal. AI‑generated documents may overlook nuances in family dynamics, property laws, or beneficiary needs. ACTEC Fellows caution that while AI is revolutionizing estate planning, attorneys and consumers must recognize its limitations and responsibilities. A standardized AI template may not capture unique considerations like blended families, special needs beneficiaries, or charitable intentions.

Ethical Considerations and Attorney Responsibility

Professional ethics require attorneys (and trustees acting in fiduciary roles) to ensure that documents are accurate, comprehensive, and tailored to the client’s circumstances. ACTEC notes that estate planning attorneys are warning consumers about using AI to draft documents and discussing the responsibilities of lawyers when using this technology. AI tools are not liable for mistakes; errors or omissions can lead to unintended beneficiaries, probate complications, or tax penalties. Trustees should rely on AI as a supplement to—rather than a replacement for—professional legal counsel.

Data Security and Privacy

Estate planning involves sensitive personal and financial information. When using AI tools, trustees must confirm that the service provider safeguards data, complies with privacy laws, and avoids unauthorized sharing or storage. Publicly available AI models may capture and retain user inputs, potentially exposing confidential information.

Bias and Accuracy

AI models are trained on existing data, which may reflect biases or outdated laws. Without human oversight, AI might perpetuate errors or recommend strategies that violate state laws or fiduciary duties. Trustees must review AI‑generated outputs carefully and adapt them to the specific circumstances of the trust.

Guidelines for Responsible AI Use

1. Use AI for Preliminary Drafts and Analysis: Let AI generate initial drafts or summaries to save time. Always have an attorney review and tailor the documents.

2. Preserve Confidentiality: Choose platforms with robust encryption and data protections. Avoid entering sensitive details into tools that store data without explicit user control.

3. Verify Legal Compliance: Confirm that AI tools incorporate the latest federal and state laws. Law changes, such as new tax regulations or revised probate statutes, may not be reflected if the model relies on outdated information.

4. Pair AI with Professional Judgment: Use AI to enhance due diligence, not replace it. Trustees should still exercise independent judgment and consult legal counsel.

5. Document the Process: Keep records of decisions, AI recommendations, and the rationale for accepting or rejecting them. Transparency helps demonstrate that the trustee acted prudently and in good faith.

Example: AI Drafting a Simple Trust

Imagine a trustee uses an AI service to draft a discretionary trust for a beneficiary. The AI generates a document outlining the trustee’s powers, distribution guidelines, and tax provisions. The trustee reviews the draft with an attorney, who notices that the AI omitted language addressing the possibility of beneficiary substance abuse and the trustee’s authority to withhold distributions. By combining AI efficiency with professional oversight, the final document reflects the grantor’s intent and protects the beneficiary.

Looking Ahead: The Future of AI in Estate Planning

AI will likely become more sophisticated, enabling increasingly accurate document generation, real‑time tax advice, and predictive analytics for investments. ACTEC notes that practitioners are researching both the positive and negative effects of AI. Ongoing discussion among estate planning professionals, ethicists, and technologists will shape best practices.

Trustees who embrace AI responsibly can streamline administration and gain valuable insights while honoring their fiduciary obligations. Those who ignore the technology risk falling behind—but those who rely on it blindly risk errors and liability. Balancing innovation with caution will be essential.

Conclusion

Artificial intelligence is reshaping the trust and estate landscape. Trustees can harness AI to improve efficiency, manage investments, and analyze taxes. However, AI is not a substitute for thoughtful legal advice, personalized planning, or ethical judgment. Understanding AI’s capabilities and limitations allows trustees to integrate technology prudently and protect the long‑term interests of beneficiaries.