Montreal’s ClearEstate Technologies aims to disrupt an antiquated business that has resisted change

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Disruption is coming to the business of writing and executing wills, an antiquated corner of the economy that has resisted change for decades.

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Alexandre Gauthier and Davide Pisanu, two of the three co-founders of Montreal-based ClearEstate Technologies Inc., raised US$13.5 million in December, as investors, including OMERS Ventures, bet the duo’s software could do for estate planning and settlement what TurboTax did for filing taxes.

“We provide an end-to-end experience for (customers),” Gauthier, who is also chief product officer, said in an interview. “We’re there through the entire process, introducing them with the right professionals at the right moment and automating most of it through our platform.”

ClearEstate, founded in November 2020, was born out of pain. Gauthier got the idea while settling his mother’s estate. It was an arduous, 18-month undertaking that involved a litany of paperwork, calls with lawyers and confusing legal work. Gauthier, a former marketer with experience in e-commerce, was inspired to create a user-friendly process for the everyday person.

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“My favourite website is the Ontario government website where you can find all 73 forms that may or may not be required for probate,” Gauthier said sarcastically. “You poke through them and you don’t understand anything. Those forms were written by attorneys for attorneys.”

The industry is primed for a shakeup, especially as Canada faces an increasingly aging population, said Sharon Hartung, author of Your Digital Undertaker: Exploring Death in the Digital Age in Canada.

Close to one in five Canadians are over the age of 65, according to Statistics Canada. Between 2016 and 2026, more than $1 trillion in personal wealth is expected to be transferred from one generation to the next, according to a 2020 report by Manulife Financial Corp.

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“One of the reasons that tech will disrupt the estate industry is because people are looking for ways to streamline the data gathering,” Hartung said. “Fundamental to estate administration is having a (continual) inventory of assets.”

Inserting tech into the industry can advance how digital assets, such as cryptocurrencies and photos, are handled in estate planning. It can also help keep a digital record of an individual’s assets, rather than the slew of binders and papers kept about a person’s house.

“There’s a huge amount of analog processes that are paper-based. So people create spreadsheets and they create binders and engage professionals,” Hartung said. “An executor’s job … is to figure out how it all gets done.”

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ClearEstate is betting that it can compete with accountants, lawyers and financial planners by making the process faster and cheaper. Its platform provides automated probate filing and estate accounting, professional advice for executors, a portal for beneficiaries to keep track of the process, and record-keeping of assets and liabilities, among other tools and services.

It makes money through flat fees on various packages that range in price from $500 to $6,500; great value, if the company is correct when it says its platform can save executors 120 hours of time and $8,500 in fees.

The average estate settlement costs in North America can run a family about $10,000 in fees, Pisanu and Gauthier said.

“It was very clear from the start that there was a need in the market,” said Pisanu.

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People pay accountants, lawyers and professionals to help them administer estates, so the founders didn’t have to wrap their heads around what exactly to offer, he said. The concern, rather, was whether people would take to the idea. That concern might have been unfounded. The company has already expanded beyond Canada, into California, Texas and Nevada. ClearEstate is adding about 80 estates per month, and aims to accelerate that pace to 300 per month by the end of the year.

I think Canadians are looking at estate planning and settlement and … they’re surprised that it’s not caught up with the rest of (digitized) infrastructure

Shawn Chance, partner at OMERS Ventures

“I think Canadians are looking at estate planning and settlement and … they’re surprised that it’s not caught up with the rest of (digitized) infrastructure,” said Shawn Chance, a partner at OMERS Ventures, the venture capital arm of OMERS, the Toronto-based manager of Ontario municipal workers’ pensions, which had assets worth $121 billion under management at the end of 2021.

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Unsurprisingly, established players are skeptical their industry requires radical change. Demetre Vasilounis, an estate planning lawyer at Fasken Martineau DuMoulin LLP, said digital estate services could be helpful, but the traditional approach of having a lawyer supervise and counsel someone when planning and settling an estate would be a difficult feat for the tech sector to take on.

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“Because you’re dealing with a lot of different third-parties — being the courts, being the financial institutions, being the land title’s office, being beneficiaries, being disgruntled people who might make a claim against the estate — that’s when it can get really difficult,” he said. “I think the challenge for the disruptors is having the technology equipped to deal with all that.”

Pisanu and Gauthier, though, think they can manage that challenge. Pisanu said unless a lawyer is servicing high-net worth clients, very few lawyers do estate planning and execution full-time because there isn’t enough volume.

“We are at a point today where we’re processing more probates in Ontario per month than most lawyers in Ontario process in a year,” Pisanu said. “We deal with professionals all the time and I think there’s a time and place for high-value advice, but processing paperwork is not high-value advice.”

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