With a simple prompt, GenAI tools such as ChatGPT can help you create everything from a basic will to a long-form business agreement. But there are risks to staking your business or personal affairs on AI-generated documents.
Key points:
- Many people now regularly use artificial intelligence (AI) technologies in their personal and work lives
- Generative (Gen) AI tools such as ChatGPT can readily produce content in response to specific prompts – including basic personal and business documents
- While GenAI can improve efficiency, it is not a substitute for specialist legal advice when it comes to business and succession planning
“Hello, ChatGPT – can you draft me a valid will in Australia?”
“Yes, I can help you draft a basic will that’s suitable for use in Australia, but there are a few important points to keep in mind…”
Since its launch in November 2022, ChatGPT (a Gen AI intelligence chatbot developed by OpenAI), is now widely known and used worldwide. Like other AI chatbots – Claude, Copilot, Google Gemini – it’s been trained to generate text in response to user prompts, drawing on text-based information from publicly available sources.
As well as people using GenAI in a personal capacity, many workplaces are incorporating or developing their own versions of GenAI tools to help their employees be more productive and efficient.
If you are running a business, particularly if you are an SME where resources are often lean, it may be tempting to rely on GenAI to support you in a number of ways. This could range from basic legal or accounting advice, to drafting a supply agreement or a sale contract, or coming up with an optimal structure for your current and future business. In managing your own personal affairs, it might have also crossed your mind to use GenAI to draft your will or your power of attorney, or to give you advice on estate planning.
There are clear benefits to GenAI – when properly used. But as with any technology, there are risks to relying on it wholly when the stakes are high.
How much can you rely on GenAI?
The product of GenAI tools reflects the input on which they have been trained – and they are prone to regressive bias. In effect, that means they tend to deviate towards the most “popular” publicly available data they can access.
In producing a draft will, power of attorney or other estate or business succession document (such as a trust or family constitution), GenAI might capture the very basic elements of a standard document it has been trained on, but it can never truly account for your unique personal and financial circumstances.
In relying on AI to draft a will, for example, the resulting document may overlook important legal requirements or contain errors such as:
- including clauses that are now outdated, or are vague and uncertain;
- misdescribing your assets, omitting a residuary or calamity clause, providing for contradictory gifts, failing to include guardianship provisions for your children, omitting back-up executors, or including a variation clause that is not wide enough to modify beneficiaries or certain trust powers as circumstances change;
- not including adequate execution provisions; and/or
- causing you to distribute your estate or adopt a new business structure without considering the tax implications, exposing your loved ones and business to significant tax losses.
The output you get also depends on how you frame your prompts. If you don’t know the important, or right, questions to ask, or the potential legal risks that need to be taken into account, the documents generated will reflect that.
For example, if you have not prompted the AI tool to ensure document makes provision for what will happen if all of your intended beneficiaries have passed away (i.e. a typical calamity clause) on your death, then an unexpected event could result in a partial intestacy of your estate. Another pitfall is that GenAI is well-known for
“hallucinating” – producing false or illogical responses or entirely making up content, including case names and legislation. This could mean that any “advice” you seek could be based on outdated law, and neglect to consider important new court decisions and evolving regulations. This is a heightened risk in wills, estates and succession matters, which are dynamically evolving across a complex array of trusts, taxation, power of attorney, family provision, and other areas.
The potential cost of relying on GenAI: personal and financial
Relying on a GenAI-generated document could also lead to a number of unintended, and undesirable, consequences. For example:
- it could result in the invalidity of the documents altogether, or otherwise a half-complete estate and business succession plan. This could contribute to family and business misunderstandings or even relationship breakdowns, or even the need to turn to the Courts to resolve uncertainty, or settle the claims of disaffected beneficiaries and business partners.
- it could also expose your sensitive and confidential personal information about your family circumstances, finances and business affairs to the public domain – compromising your own security and that of your business.
Why the best advice is specialist legal advice (from a real person)
Ultimately, only an experienced lawyer who specialises in business and estate planning will know what questions to ask, and what risk issues – such as family provision and other estate litigation risks – might arise in your specific circumstances, and be able to tailor a solution that is right for you.
The other benefits of using a human lawyer include:
- they will know the right questions to ask and the relevant legal considerations to take into account in delivering legal advice and solutions that reflect your unique circumstances;
- they will (should!) listen to your story and show empathy in considering how to navigate sometimes tricky family and business relationship dynamics;
- they have strict ethical and professional obligations they must adhere to – in contrast, AI algorithms don’t owe you anything; and
- they will be a trusted advocate for your interests, and a long-term partner for you in your business and personal journey.
So while using GenAI for estate or business planning may seem a simple and cost-effective solution, it is important to understand the risks of outsourcing important legal advice and documents to a non-human adviser. While involving an initial outlay, ultimately the peace of mind, confidence and security you will have from obtaining comprehensive, accurate and bespoke estate and business succession advice is priceless.
Lawyers can help guide you through the process, and be a genuine partner with you to safeguard your legacy, and protect your interests for the long-term.
Legal issues rarely come with easy answers, and that’s exactly why we take a thoughtful, tailored approach for every client. Find out more about Hamilton Locke Private, or please get in touch with Brett Heading, Fran Becker, Jamie Blair, Jack Conway or Penelope Nicholls.
