My a16z Crypto Startup School Submission — Wills on Blockchain
Hey Everyone!
I hope you had a great Thanksgiving! I hope y’all spent as much quality time with friends and family while consuming a copious amount of food and football as I did. The only downside from this weekend was the pain that the sport of football caused me: Saints lost, LSU lost, the high school team I coach (Newman) lost, & my fantasy team lost (now officially worst in the league). The one positive (and it’s a big one) is that Tulane is now hosting the AAC Conference Championship at Yulman stadium this weekend for a chance to go to a New Years’ six bowl! If you aren’t a football fan, all you have to know is that going into the season, Tulane making a New Years’ six bowl was as improbable as FTX imploding within a week. Looking forward to going to the game this Saturday as well as watching team USA battle the Netherland in the World Cup! Now…Let’s get into it.
Before we get into the thick of things, I want to provide a little context for this blog. During my senior year at Tulane, along with taking classes, coaching sports, running a fundraiser, and not spending any time looking for a job (still unemployed, lol), I was a part of a business accelerator where students learned about entrepreneurship and attempted to start/work on a business venture.
When I entered the course, I had an idea to utilize blockchain technology to tokenize private investments (VC and PE) through NFTs to make them more liquid for investors and for the companies to receive a royalty attached for every resale of those NFTs to support their business. My team and I decided to pivot from this idea (the jury is still out to see if it is viable) and transition to a much more lively, exciting, and happy problem: inheritance documents.
I never imagined as a 23-year-old writing this blog that I would know as much about wills and the inheritance industry as I do and become as passionate about this industry as I am. I guess that is what doing hours of research, interviews, and more will do to you. Due to the knowledge base I already accumulated about wills, I knew exactly what I was going to submit for a16z’s Crypto Startup School Spring 2023 cohort: wills on the blockchain.
Problem: Current State of the Inheritance Industry
As you are reading this blog, would you agree that having a will or other type of inheritance document is important? If so, you agree with 76% of Americans. However, actions speak louder than words. Although a vast majority of American believe wills are important, only 1 in 3 American adults currently have a will.
So why is that? Well, there are three ways that people can make a will:
Do It Yourself (DIY): This approach is legal in many states but is not recommended as most of the time, those wills are not enforceable, rendering them useless.
Lawyers: The typical approach, which goes through lawyers, is great for individuals looking to make a will tailored to them specifically and is best for those with complicated or large estates (aka rich people). However, this process is slow, expensive, and antiquated in today’s digital world. Using a lawyer is costly in terms of time (anywhere from 3–6 months) and money (typically > $1,000).
Digital Wills: The cost issues presented by lawyers, along with the COVID-19 pandemic, have pushed individuals to create their wills online through what is known as a digital will (about 40% of all wills created). These products make it faster and cheaper for an individual to create inheritance documents as people just simply fill out a questionnaire online to auto-generate a will. However, these products are incomplete. After creating the will online, a customer still needs to make the document enforceable by getting it notarized in person and must physically store it themselves.
All these offerings have their drawbacks: is there no better option?
Solution: A D2C E-Will Offering
I’m glad you asked (even though I was the one asking…just roll with it pls). There is new legislation that is slowly, but surely, being legalized across the US allowing for the possibility of a new product called electronic wills (or E-wills). An E-will is an estate planning document that is created, notarized, and stored entirely online, unlike digital wills which are only created online.
However, the majority of Americans do not have easy access to this new legal revelation as E-Wills are only legal in 10 states, and because there is no “go-to” platform to create these documents.
Thus, my group’s idea was to get ahead of the E-will legislation curve and make the first and only D2C E-will offering available on the market. Our product would follow three simple steps: create, notarize, and store
Create: For the creation step, our customers will go through a guided questionnaire that asks them to account for any assets they own, name the beneficiaries of those assets, and assign guardians for children and pets. Users can simply click through the questions, making the will-building process fast, easy, and effective.
Notarize: For the notarization step, our customers will be able to utilize online notary services through our platform to certify their will immediately after completing it. Having e-notarization baked in helps make the whole will process easy for customers and helps relieve them of some of the stress that comes from going to a local notary. To complete the online notarization, we would set up a Zoom call with the customer, provide witnesses (depending on the laws of the state), and use e-signature technology to sign the will. This process takes five minutes max, and customers can complete it directly after creating their will. Now, our customer’s will is legally enforceable.
Store: The last step is to store the wills online. Directly through our platform, users will be able to store their wills and access them at any point. Users will be able to access these old wills and make any changes and updates to them for a small fee. Once a new change is made, the customer will be able to notarize the will once again to make those changes official.
How Does this Involve Web 3.0?
When my group originally set out to build this product, we did not intend to integrate it with blockchain technology originally. Instead, our approach was to prove the D2C E-Will platform concept through a Web 2.0 solution first before integrating with Web 3.0. I even bought an ENS domain for the company and currently use it as my personal domain name (willful.eth).
However, given that I applied to a Web 3.0 startup accelerator with this idea, I guess I need to explain how Web 3.0 would integrate with this product. Here are a few ways:
1. Store Wills on Blockchain
The first and most obvious way that blockchain technology would integrate with this idea would be to store the wills on-chain. Why would this be beneficial? In researching this idea, my group and I discovered that one of the biggest problems with current wills is that storing a document as paper elevates the risk of lost documents.
People make very personal decisions on a will, and can oftentimes cut out certain immediate family members from receiving assets. Due to this, a person may not share where their will is stored, preventing/prolonging the probate process. Sometimes spouses locate the will after their partner passes away but do not report finding it. This occurs if the partner dislikes the contents of the will and wishes to exploit the default asset distribution process. In the default process, the assets are distributed across the immediate family. One litigator we talked to said,
“Lost wills are a very common occurrence.”
Another even said,
“I’ve litigated cases where a spouse ripped it up because they didn’t get what they wanted”
Guessing they probably didn’t have as great of a Thanksgiving celebration as you hopefully had last week.
By storing a will on the blockchain, the will is secure, unalterable by others, timestamped, easy to locate, and private.
- Secure: Your bedside drawer vs. a blockchain network…which sounds more secure?
- Unalterable by others: You can use a smart contract so that only a specific wallet addresse could edit and make updates to the will
- Timestamped: By utilizing the blockchain, anyone can see when a will was created, edited, and executed. Thus, it is impossible for someone to contest that a specific will is not the most recent version.
- Easy to locate: Similar to the last point, anyone can see that a will was created, so it’s easy to locate.
- Private: Although transparency is a word that gets thrown around when talking about Web 3.0, the specific contents of the will would not be open for anyone to see. ZK Proofs would be used to keep the data of the will itself private for its creator.
2. Utilize the Power of Smart Contracts
Losing a loved one is one of the hardest experiences that anyone has to go through in their entire life. I am sure everyone reading this blog dealt with those negative feelings of pain, sadness, and grief that typically comes along with these types of tragic events (if you haven’t, I’m genuinely happy for you). The last thing that most people want to do is prolong this process of suffering and get their minds off it (for me, coaching football helped innumerable). However, the tech-deficient will and inheritance industry in its current state does not address this pain well. If a loved one had a will, you need to locate it, the executor must manage the disposal of the estate within the terms of the will, etc. People still need to execute the contents of the contract in the current system. Dealing with all this stuff post-mortem makes people spend more time thinking about their past loved ones, thus prolonging the five stages of grief.
However, by putting wills on the blockchain, the legal document can utilize the power of smart contracts to speed up this process. For any readers who are not crypto natives, you may be wondering, “What makes a contract smart? Is it just that a Harvard Lawyer created it?” Per Coinbase’s definition:
“Just like any contract, smart contracts lay out the terms of an agreement or deal. What makes smart contracts “smart,” however, is that the terms are established and executed as code running on a blockchain, rather than on paper sitting on a lawyer’s desk.”
This means that the will can distribute the assets by itself. Obviously, for physical items, a blockchain-enabled e-will cannot physically move the items to their rightful owner. However, if you create NFTs that signify ownership of specific assets on the blockchain, the smart contract can simply distribute these assets to their rightful owner effortlessly.
3. Assign Crypto Assets to Family Member Wallets
With more people moving their assets into self-custody as a result of the FTX collapse, more people are storing more of their net worth on-chain than ever before. One of the biggest benefits of moving your assets into self-custody is that you are not relying on any third party to keep your assets safe, you only need to rely on yourself. However, there is a huge potential problem with this that can be illuminated by asking one simple question:
What would happen to all your assets if you suddenly dropped dead?
Although I’m sure some people have shared where they keep their seed with loved ones close to them (spouse, sibling, parent, etc.), if I were to bet, most people have no answer to this question (myself included).
A blockchain-enabled E-will solves this problem while also being legally enforceable. As part of the will, there would be a section where you can add wallets of family members or friends who are a part of the will and you can assign which assets (tokens, NFTs, etc.) they will receive upon confirmation of your death. This makes the process simple, easy, and effective, and lessens the pain as the only thing more painful than dying is losing access to your crypto funds (it’s a joke, settle down.)
Conclusion
This blog delves into a little more detail than the application I submitted to a16z, so I hope I can get this blog into the hands of the ultimate decision-maker so I may have a better chance (hopefully) of getting selected to join the cohort! A few things to note about the blog:
- The last time I spent an extensive amount of time on this idea was in June, so I may not be completely up to date with all industry developments (given how slow law operates, I’m probably fine)
- There are probably plenty of other reasons why Web 3.0 would work with a D2C E-will provider (please share any ideas in the comments)
- Although most of my time recently has been spent on the job search, coaching football (not anymore), and writing blogs, I would drop everything to pursue this venture idea full-time. Part of the reason I don’t have a full-time position now is honestly because I thought I would maybe work on this idea full-time post-grad. If my group received some funding for this idea back in May, I probably wouldn’t be writing this blog tbh.
If you are interested in this idea and would like to talk to me about it (particularly devs, but anyone else is welcome as well), please feel free to reach out in the comments or through one of my socials linked below. Guess I’ll try out the building in the open model rather than the stealth startup.
Thanks for reading! Not sure what I’ll be writing about next week. Have an idea about a Web 3.0 World Cup of sorts, but will need to do a little thinking and theorizing before writing. Stay tuned, and hope you have a great start to your Christmas season!
Here are my links if you feel inclined:
