How to Bring Estate Settlement into the 21st Century

Estate settlement is a complicated business. Executors find that settling an estate – and preparing their own before death – is one of the most difficult things they will ever do. It often takes about eighteen months and thousands of dollars. The emotional toll is arguably worse.

Not only that but estate settlement is arcane, with certain processes dating as far back as the 15th century. Probate (from the Latin verb “probare” meaning “to prove”) is one, and while we associate it with complex legal proceedings, its purpose is simple: to prove that the deceased’s will is carried out. In the last few centuries, the process has grown more convoluted.

While we don’t write in Latin nearly as much, the estate settlement process in Canada today remains a quagmire of forms and procedures that are difficult to understand, let alone navigate. Yet, estate executors need to manage everything, often without any formal training.

Billions of dollars will be transferred through probate in the very near future – what some call the greatest wealth transfer in history. The country and the industry must be prepared. Let’s take stock of how we must modernize estate planning and settlement to make this transfer smooth.

Temporary Measures are Not Enough

Canada has made some improvements to estate planning and settlement in the last few years. During the height of the COVID-19 pandemic, for example, some provinces allowed remote witnessing for some legal documents. While this was an important step towards making legal documents digitally native, most of these measures were temporary and wills were not included.

In 2021, British Columbia became the first province to ensure legal recognition of electronic wills. Now, electronic wills in British Columbia can be digitally signed and even remotely witnessed. Ontario has simplified some aspects of probate, and legislation went into effect last year to reduce the number of probate forms from 58 to 23, make the fonts easier to read, and clarify the text. These are steps in the right direction, but more work needs to be done.

Complexity Hurts Estates

When my co-founder Alexandre Gauthier lost his mother in 2019, he was thrown into the mess of paperwork as executor of her estate. Finding clear probate instructions was nearly impossible. How was he supposed to tell which forms he needed? Good luck trying to figure out what they mean and filling them out correctly. They were written by lawyers for lawyers, not for the regular people most likely to serve as executors. For these reasons, understanding estate settlement has only been accessible to the few, versus the many that must walk through the process.

The solution for many is to hire lawyers – not for their ability to make complex judgment calls, but rather for their ability to tell which forms to fill out – not necessarily high-value advice. The forms and the process should be understandable to the people who need to use them, but they aren’t. That’s a key pain point today.

This complexity also disproportionately affects middle-class and less fortunate families the most. Those with greater means can afford to spend a small fraction of the estate on professionals to handle the busy work, while those of smaller means can’t.

But here’s another problem with the complexity of probate, one that I think gets far too little attention: The complexity of settling an estate doesn’t necessarily correlate to the estate’s value. 

You would think that a high-value estate would be more complex than a low-value estate, but that’s simply not true. A small estate’s settlement could be enormously complex because of the kinds of assets present, whereas a large estate with different assets could be comparatively easy. The intricacies of probate disproportionately harm those who are less able to afford it.

Settling an estate is also essentially analog. You need to file so many paper forms that most executors create spreadsheets and put together paper binders full of the information they need. Whenever you transfer that information from one program to another, from a program to paper, or vice versa, you risk losing something. There is a reason that companies sell templates just for organizing estate planning and settlement.

Because of this, much of the settlement process is siloed. There is, for example, no nationwide repository of wills in Canada, despite some province-level efforts from Quebec and British Columbia. 

Tracking digital signatures today is not hard. E-signatures have proved to be fast, efficient, and reliable in a variety of industries. They are used regularly in healthcare in the United States, as e-signatures can meet even stringent healthcare regulations. There is no reason that we cannot make more parts of the settlement process work together automatically.

How to Simplify Estate Settlement

Legislators need to make sure that laws work in the twenty-first century. But legal reforms are not enough. We also need to work on the estate side to provide the right support tools.

Simplifying Estate Law

The probate process needs to be simplified legally. Since probate is such a complicated process, any meaningful reduction in the volume of paperwork would help executors. Legislators should take a cue from Ontario and scrutinize the number of forms and how forms are written.

Most executors are not lawyers, so provinces should rewrite and tailor the forms for people who need to use them. And while the forms are being reexamined, surely some can be combined or eliminated. This will help both with estate settlement and with estate planning.  

Legislators also need to revise estate laws to bring them up to date with today’s technology. Only British Columbia recognizes electronic wills as legally binding. The other provinces should follow British Columbia’s lead here. 

The temporary measures from the pandemic and the use of e-signatures in other industries should be sufficient for proving that electronic wills and remote witnessing are viable. We just need reasonable safeguards, like regulations about how an electronic will can be revoked.

Streamlining Estate Settlement With Technology

We also need to leverage technological advances to meet the needs of executors of all estates, both big and small. Streamlining through technology has worked well with taxes. While taxes are still needlessly complex, most people can file their taxes themselves because companies like Intuit and H&R Block create software that walks them through the process using clear language, not legalese.

This is the kind of innovation that we need in the estate planning and settlement space. Yes, some estates will require more careful handling, but the vast majority should be able to step through the process with instructions in plain language. Then, other estates will be able to reserve lawyers for truly complicated issues.

We also need to streamline the paperwork. When you step into the role of executor, you need to deal with the people and institutions connected to the estate. Much of the information will probably be on paper forms, so digitizing this paperwork and incorporating digital versions into the streamlined settlement process is a major area where we can innovate.

Imagine being able to take all of your documents, scan them, and have them automatically populate the forms that you need to file. We see this kind of innovation making its way into the business world, but estate settlement has been lagging behind.

All of these reforms are doable. The estate planning and settlement industry is not one most people discuss regularly, but everyone should be planning how to wrap up end-of-life affairs. If Canadian legislators and industry leaders get behind these key reforms, we can make estate planning and settlement much easier logistically and emotionally. It’s not just expedient; it’s the compassionate thing to do.