Three Ways Estate Planning is Revolutionized by Smart Contracts

Lori Bowers
January 11, 2023
News & Updates

How Smart Contracts are Beneficial in Estate Planning

As the world becomes increasingly digital, it is no surprise that estate planning is also moving in the same direction.  One of the most promising aspects of this digital future is the advent of smart contracts on blockchain technology, like Züs.  Smart contracts are computer protocols that facilitate, verify or enforce the negotiation or performance of a contract.  The smart contract automatically performs the agreed-upon actions when the conditions are met. This makes them an ideal solution for many estate planning needs.  For example: 

Smart contracts can be used to create a will or trust and be sure it is followed.

It is no secret that the legal system is often slow, expensive, and full of red tape.  This can be a major problem when it comes to estate planning.  After all, you want your loved ones to inherit your property as quickly and easily as possible.  One way to solve estate planning issues is by using smart contracts to automatically execute the terms of a contract. They are secure, reliable, and tamper-proof.  

Smart contracts for will and estate planning can offer peace of mind for those tasked with carrying out an individual’s wishes after they have passed. By using this form of technology, like Zus, the will is stored securely on a blockchain that cannot be tampered with or altered. The blockchain ensures the will remains as intended by the initial testator. The reliability of this system ensures that there are no logistical problems in transferring assets, as smart contracts will hold records automatically. Transactions would only be permitted if they meet predetermined criteria. With both security and reliability built in, families can have full confidence in relying on a smart contract will.

Smart contracts can be used to transfer assets after death.

So, how do they work?  Let’s take a look at an example.  Suppose you would like to leave your house to your son John.  You would create a smart contract specifying that John is the only person who can inherit the house. The contract would also include instructions on how the property would be transferred (e.g., via deed or title).  When you die, the smart contract will automatically execute according to your wishes, transferring ownership of the house to John without delay.  

With smart contracts, there is no need to worry about your assets after you are gone. When you die, the smart contract created beforehand guarantees that your intentions will be carried out effortlessly and without delay. Stipulated in the smart contract is clear ownership of any assets to be passed on including a house. All of this is automated and depending on the complexity of the smart contract, you can make sure that specific requirements are met on time as soon as you pass away. So, rest assured, smart contracts can make sure none of your wishes will ever fall by the wayside.

Smart contracts can be used to manage payments and distributions of the estate.

Estate planning is the process of organizing and preparing for the distribution of your assets after you pass.  It can be a complex and overwhelming process, particularly if you have a large estate or multiple family members.  Smart contracts make it easier and less time-consuming by automating the process.  This can save months or even years of estate planning paperwork and complex legal procedures like probate.  

Smart contracts are revolutionizing the way estate executors manage payments and distributions among heirs or other stakeholders. Previously, this process was time-consuming and expensive. It required a lot of paperwork and manual tracking. Smart contracts have made every step of the process much simpler through automation. They facilitate efficient transfers in addition to workflows that background review payments. verify content accuracy, retain records and other tasks that can be tailored to specific needs. Smart contracts provide a secure framework that guarantees payments are sent onto the right people at the right time.

Smart contracts provide a secure way to store your estate planning documents.

The process of estate planning is important; however, it can be difficult to know where to keep your estate planning documents.  You will want to make sure they are secure, but also want to be able to access them easily if the need arises.  Smart contracts use blockchain technology to create a tamper-proof record of your documents, so you may rest assured knowing that estate planning documents are safe and sound.  In addition, smart contracts make it simple for you to share your documents with your estate planning team.  

Smart contracts are revolutionizing estate planning.  They make the process more efficient, secure, and easier to manage.  Have you used a smart contract for your estate planning?  If not, why not?

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