AI Background Checks Transform Estate Planning Practices
The integration of artificial intelligence into estate and financial planning practices is rapidly evolving. AI-powered background and other fact checks can transform two critical estate-planning practice steps:
Filter bad applicants. The safest and easiest time to terminate a client is when the attorney-client relationship hasn’t begun. Practitioners should consider using AI background checks to filter bad prospects before they become clients.
Asset transfers. Asset transfers are a common aspect of estate planning. Using an AI background check before a transfer can identify problems that suggest that the transfer not be made (for example, an existing claim or a history of issues). The corroboration of the client’s status can safeguard both the client and practitioner in the event of a later challenge.
AI can be used to accomplish both of these critical practice steps with only a modest amount of time to review the AI results. Having AI generate the results can be almost instantaneous and at negligible cost. AI can transform client evaluation, risk management and client service. Practitioners have a duty of technological competence, requiring them to understand the benefits and risks of relevant technologies, including AI, as outlined in ABA Model Rule 1.1. and corresponding state ethical rules.
Three Approaches
There are three possible approaches:
Free AI. This should never be used. Storing client confidential information in a non-subscription version of AI may be an ethics violation, as that information may be sent to the cloud for machine learning purposes. The Florida Bar Association created a guide on AI, which notes the following:
“Free general AI models may use your questions and uploaded documents to train future models. To maintain client confidentiality, you will need a paid subscription.”
Subscription-based general AI. This should protect client confidentiality, but what information will the practitioner input into the AI program they’re using? What format of output do they want? If the practitioner merely inputs the identifying information and asks for a background analysis, each attempt could yield different results, with less organization than is practical. They may miss important points.
Proprietary AI package. This is the best option. If a practitioner purchases a proprietary AI package that builds on generally available AI subscriptions, the service provider will have “trained” the AI model by developing and regularly updating directions for the AI program, which will generate more robust and usable results in a consistent format, making review more efficient. This will enable the practitioner to infuse the AI with their own “voice,” thereby increasing the sophistication of the responses that the AI provides. If appropriately trained, this can also change the language the AI uses in responses to better fit the situation the practitioner is inquiring about.
Firm Policy
To mitigate potential claims of discrimination or selective investigation, practitioners should: (1) create a uniform firm policy; (2) consider conducting AI background checks on all prospective clients and potentially on returning clients after a defined period; and (3) avoid even the appearance of discrimination as to which prospective clients they choose to investigate to comply with ABA Model Rule 8.4(g). Some states provide that refusal to represent must not be based on discrimination of protected characteristics. For example, see California Rule 8.4.1.
Pre-Client Screening and Professional Obligations
Before a prospect becomes a client, attorneys and advisors have no fiduciary duty to the prospect. This creates an opportunity to leverage AI background searches to identify reputational or legal risks and, if necessary, decline representation without the complications of terminating an existing client relationship. (See Martin Shenkman, “Terminating an Estate Planning Prospect or a Client,” NYSBA Trusts and Estates Law Section Journal, 2024, Vol. 57, No. 1, p. 32). This is more complex and nuanced than merely a lien and judgment search. Note, however, that AI searches won’t access specific proprietary databases that a LexisNexis or private investigator may use. In addition, even if an AI report isn’t worrisome, practitioners will gain a deeper understanding of the new client, which may facilitate a better relationship.
ABA Model Rule 1.18 provides that: “Caution is in order when undertaking this due diligence. Lawyers owe duties of confidentiality to prospective clients, even if no formal relationship ensues, and must avoid using or revealing information learned in the consultation.” Additionally, using AI to make decisions regarding employment, extending credit or evaluating tenants can violate state and federal laws.
Learning about a client through their background report means building a better rapport more quickly, as you discover commonalities and areas of shared passion. Additionally, AI can provide a CV with a chronological history that the client may appreciate seeing.
Social Media and Reputational Risk
AI tools can identify social media activity, including suspensions or policy violations, which may signal reputational risk. This is an aspect of due diligence that was never included in traditional lien and judgment-type searches. Consider the implications of a prospective client with a history of posting content that is controversial or inflammatory. Might that prospective client, if they become an actual and disgruntled client, do the same to your firm?
Legal History and Litigation Risk
The AI risk assessment should flag legal risks, including prior lawsuits against advisors. Some firms categorically refuse to accept clients who have sued previous professional advisors. AI tools that may identify such history, which could be invaluable in supporting these firm-level decisions.
Data Integrity and AI Model Differentiation
Recent case law highlights the risks of relying on AI-generated content without verification, leading to sanctions for fabricated citations. (Mata v. Avianca, Inc., 678 F. Supp. 3d 443 (June 22, 2023)). A practical solution to this risk in conducting background checks is the use of a secondary AI (for example, Google Gemini, Anthropic Claude) to audit the primary AI’s findings (for example, OpenAI, ChatGPT), reducing the risk of hallucinations or missed information. This layered approach enhances the reliability of risk assessments and supports defensible decision-making. Is this something the administrative personnel in the firm conducting the AI background check will be able to do, or might a third-party provider that has this step reflected in their standard operation be a safer approach?
Confidentiality and Data Security
A critical concern for attorneys in handling client data is the use of AI and vendors whose architecture ensures that uploaded documents aren’t used for machine learning or accessible to third parties, in stark contrast to many free AI platforms. Legal ethics require attorneys to make reasonable efforts to prevent unauthorized disclosure of client information, including when using AI tools. ABA Model Rule 1.6 (Comment [19] to Model Rule 1.6 applies to electronic communications. It requires “reasonable precautions to prevent the information from coming into the hands of unintended recipients.”) ABA Formal Opinions 477R (discussing transmitting confidential client information online), 483 (discussing steps to take in the event of a data breach) and 498 (discussing points for practitioners to consider in a virtual practice) provide guidance on safeguarding client data in virtual and cloud environments.
Subscription AI vs. Free Models
Practitioners will likely find that subscribing to a third-party vendor AI package that’s designed for the professional estate planner will be more efficient. An AI subscription will be specifically engineered for an estate or financial planning practice, incorporating hundreds of custom queries developed over time. Free, generic AI models lack this domain-specific rigor and pose significant risks to confidentiality and accuracy.
A Powerful Tool
AI-powered background checks, when implemented with objective policies and robust privacy safeguards, offer estate and financial planners with a powerful tool for client selection and pre-transaction due diligence. Embracing these innovations will be essential for maintaining competitive and ethical practice standards.
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