Emerging Technology Improving Executor And Professional Deputy Roles

Financial technology is revolutionising how we manage our personal finances. Easy access to an increasingly diverse range of financial services means our money is more widely distributed than ever before.

While such diverse, and increasingly digital services, aim to make our lives simpler, it can present problems upon death or loss of mental capacity for the appointed Personal Representative or Deputy who needs to identify all of the estate’s assets and liabilities.

There is currently an estimated £20 billion located in unclaimed accounts, and the wealth of the baby boomer generation is likely to substantially increase this figure.

As old meets new, the historic issues in understanding financial affairs such as poor bookkeeping, hoarding and changing address or employers, are likely to be compounded by issues such as online account management and paperless billing.

Similarly, the impending generational shifts will further complicate matters. Increased divorce rates, second marriages and even greater geographical distance mean the next of kin may not fully understand or be aware of financial affairs.

Technology is helping to ease this burden on those tasked with administering an estate or managing financial affairs.

Having recently been awarded Innovation of the Year at the British Wills & Probate Awards, Ben Furlong from Estatesearch has taken the time to discuss technological innovations, how they can mitigate risk and what opportunities they present.

What are the risks to executors when administering an estate? 

Personal liability for unknown creditors, and incorrect distribution due to insolvency were key legal challenges we first set about solving for executors. But as we developed our services with practitioners, we identified other challenges, such as the business cost of having to administer an asset discovered after distribution; a problem many seem to have encountered.

Perhaps more ambiguous is the duty of care professionals owe their clients when collecting in the estate as an executor, or securing assets as a deputy. Both roles require ‘reasonable due diligence’ but no definition of reasonable is given in legislation or existing professional standards.

There remains a subtle risk, especially considering an increasingly litigious society, that a practitioner faces a negligence claim for missing either an asset or liability from a disgruntled beneficiary.

How can technology help to mitigate these risks?

By developing Application Program Interfaces (APIs) with data aggregators, such as Credit Reference Agencies like Experian, we can securely transmit and receive personal data relating to an estate in minutes.

This allows a rapid collation and assessment of vast amounts of information compiled from a wide range of institutions. By parsing the data through a logic filter, relevant data can be clearly presented for practitioners to quickly establish any bankruptcy, insolvency, and outstanding credits with providers of financial services.

Similarly, technology allows us to develop systems and procedures to securely transmit and receive personal data from other data holders. Automation enables the efficient communication and collation of information from more sources than would otherwise be feasible. Recording, logging and documenting each step of the process also generates a clear audit log of activity for future reference.

While reviewing personal papers remains an important part of any due diligence, technology helps support a more robust process to help mitigate risk, aid compliance and avoid negligence claims. However, while risk is an important factor in the legal industry, we prefer to focus on the opportunities technology presents.

How are emerging technologies helping to improve the role of private client solicitors?

By adopting services that provide efficient access to more comprehensive data, there is an opportunity for private client solicitors to reduce administration. Helping improve profitability and allowing increased dedication of available time to providing an outstanding client experience.

In addition to efficiency, comprehensive technology-enabled due diligence can mitigate unknown risks and identify previously unknown accounts, maximising value for clients. We have also identified and prevented ongoing financial abuse in one matter, identifying an annuity where monies and correspondence were being directed to a family member who had previously denied knowledge of any such accounts.

By utilising and offering efficient technology services, practitioners will be able to deliver greater value to clients. An essential requirement during the evolution and rise of DIY in the legal industry.

Looking to the future, how do you feel technology will be used in the sector in the next ten years?

Financial technology is having a profound impact on how we live our lives and the landscape is constantly shifting. Financial data will be increasingly accessible via open banking initiatives, and with machine learning and AI tools, will help automate data analysis. All these tools will help focus practitioners’ time on their clients, which I believe will simply continue to drive client satisfaction.

Much of the technology to transmit, receive and analyse financial data already exists. A key challenge over the coming years will be creating policy and legislation to keep pace with the rate of technological change, to support access to data for vulnerable people and the legal representatives supporting them.

1 Comment

  • test

    Technology can certainly help, but be aware that some of the vendors are ruthless salespeople and will take full advantage of anything which will tie you in semi-permanently or cause massive financial issues if your business levels drop.
    1) Make sure that the contract actually says what you have agreed.
    2) Make sure you can extract your data easily and in usable form, not having to extend your contract for months while staff spend that time downloading EACH file one at a time.
    3) Build in flexibility if you need to downgrade the number of licences.
    4) Check that your deal is with the software supplier, NOT with a finance company who will still need to be paid if the software company goes under or offers a defective service.

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