I Started a Business to Streamline the $90 Trillion Wealth Transfer From Boomers to Younger Generations — Here's How It Helps People Receive Inheritances Faster Ari Brojde, co-founder and CEO of Estateably, had an eye-opening experience while settling his grandmother's estate.
By Amanda Breen Edited by Jessica Thomas
Key Takeaways
- About $90 trillion is expected to pass from boomers to younger generations.
- Brojde and his cousin wanted to address the complex estate settlement process.
This as-told-to essay is based on a conversation with Ari Brojde, co-founder and CEO of Estateably, an estate, trust and incapacity accounting and administration software used by more than 1,000 firms and 20,000 families so far to process over $15 billion worth of assets. Read on to see how Brojde and his cousin and co-founder Alex Wulkan built their company — and what's ahead. The piece has been edited for length and clarity.
Image Credit: Courtesy of Estateably
My background is in financial services, and during my time as a wealth advisor, I heard a ton about this crazy wealth transfer that was coming down the pipeline. At the time I was in the business, we were talking about $30 trillion of assets that were going to change hands from one generation to the next. Today, we're looking at the Great Wealth Transfer — with an estimated $90 trillion of wealth expected to be passed down.
In 2015, I saw the writing on the wall with respect to the benefits that I was providing to my wealth management clients. There was the emergence of advisors and all kinds of automated solutions that would help them and essentially do what I was doing. And, with the Great Wealth Transfer looming, there was a need for a key financial quarterback. At the time, there weren't very many tools that the firm was offering us in order to be that financial quarterback. So I sold my book of business; I thought there was a massive opportunity in creating a piece of software that would allow for better collaboration among a client's financial advisors, financial planners, lawyers, accountants and insurance people.
I built what was called a virtual family office platform that would leverage the expertise of all those different individuals around a single platform. And as I was selling that platform to smaller accounting firms, management firms and law firms, I kept getting a very consistent piece of feedback: The system we built to inventory all of those assets, liabilities and financial documents would be useful for estate administration and settlement. After I heard the feedback three or four different times, I said, "Well, maybe there's something to investigate here."
Related: 3 Ways to Prepare Yourself for the Great Wealth Transfer
Around the same time, I lost my grandmother. She was a shared grandmother with my first cousin, and about two years into the administration of her estate, I reached out to him. He's a lot younger than I am, studying at Tufts University at the time, and I said, "Alex, you know this is strange, I can tell you from my background in financial services that complex estates can take a very long time to settle. But here's a case where we had the most vanilla, simple estate possible." She didn't own property. She was a renter. It was a modest estate. She did have a will naming her three grandchildren as equal beneficiaries of her assets. Yet two years later, we still hadn't received our inheritance.
And during our conversation, my cousin said, "Well, either our family's incompetent and can't navigate this process, or there's something more systemic at play here." So he suggested we start talking to people who do this work day in and day out — the lawyers, accountants, people in trust companies — and ask them if we had hired them and retained their services throughout this process, would it have gone any smoother? And they all came back and said the same thing: No. It's a two- to three-year process.
When we asked why it takes so long to settle an estate, the answers were consistent. It's a very manual, labor-intensive process that requires a fair degree of collaboration and communication within a business network where, oftentimes, no one really trusts one another. So, we thought there was a big opportunity to come in and be the platform of choice for professionals as they navigate and help their clients through this process.
Related: Coming Soon: The Biggest Wealth Transfer in History
In starting my first company, I learned the importance of getting a minimum viable product out to market as soon as possible to get feedback from customers. We had this massive whiteboard in our first Estateably office where we itemized all the steps required in our jurisdiction to get this process underway and finally settled. When we asked people which part of the process gives them the most pain, they all came back and said it was getting a tax clearance certificate, which, for U.S. individuals, is kind of equivalent to a closing letter from the IRS. Estateably is based in Canada and serves North America.
They said the process of getting clearance was like a black box: We have no idea about the status. We send an application and never know if it's received or not. It's between six and nine months of just waiting around, and we can't distribute assets until we get this closing letter from the tax authorities. So we built a small solution that would help expedite these applications with the Canada Revenue Agency. We presented it at a trust and estates conference in Canada, and the feedback we got was encouraging. People said, "This is amazing. This is a huge problem and pain point for us, but it's only a sliver of what we do, so if you can build this type of automation for the rest of this process, we would be buyers of your solution."
So we set out to do that. One of the biggest challenges was the gargantuan task of understanding each step in the process — because there are potentially hundreds of steps — and then building the automation pieces to relieve our users of as much manual data entry and number crunching as possible. In many of our discussions with financial institutions about their problems, they said they suffered from the lack of standardization across their entire practice.
Our initial product was an end-to-end solution that was all about standardizing the work, so we thought we were doing our customers a huge favor. But as we actually got into the market and had more and more files being entered on our platform — today, we have about 25,000 different estates that have gone through the probate process on our platform — we started to realize that every estate was unique and had different characteristics that required a different set of tasks. So we realized we needed to build flexibility and adaptability into the platform to allow our users to add ad hoc tasks when required — because PC software couldn't solve for all the different permutations of what happens in the real world.
Now, the massive transfer of wealth I mentioned earlier is underway, and we're fortunate to have built a foundational piece of software that allows information about beneficiaries and assets to be tracked on our platform and for those assets to be processed. The software generates work forms with a click of a button to automate all the required workflows. And now we have customers asking us to add a fintech piece to help with the actual processing of the assets, and we're excited to bring that to the table. We're continuing to innovate, and AI is critical in that, especially for creating personalized tasks. Natural language processing is another emerging technology. It can take unstructured data like wills and trustees, allow computers to understand it and then make decisions based on it.
Related: The Magic Number for Wealth Went Up $300,000 From Last Year — Here's Why
I would advise any aspiring entrepreneur to get out of the building early and ask as many potential customers questions as possible before spending a tremendous amount of money on software developers and building a product that may or may not resonate with an audience. Work with a good design team to create clickable prototypes to test your ideas and bring them to potential customers to get their feedback. Many times, especially in our industry, where you have individuals who have been slow to adopt technology or are still using older pieces of technology, sometimes clickable prototypes are indistinguishable from a real app. They are a lot quicker and less expensive to build. By putting those clickable prototypes in the hands of potential users, you get valuable feedback versus going away to build software, then coming up for air and hoping that people will adopt it.
