Disgruntled couple having problems during a meeting with their agent in the office.
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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide for wealthy investors and consumers. Register to receive future editions, straight to your inbox.
Attorney Tasha Dickinson said she receives calls every week from clients asking for legal advice they received from ChatGPT, Claude or another artificial intelligence chatbot. Some don’t admit it, but she can tell from their questions, she said.
One client, a wealthy Florida resident, asked Dickinson about creating a community property trust — an attractive option for married couples — saying he had received AI’s suggestion to save on taxes for his heirs, she said. Dickinson quickly pointed out a problem: the client’s wife had recently died.
“I said, ‘Well, you understand that a community property trust is between husband and wife, right?’ And there was silence on the phone,” said Dickinson, a partner at Day Pitney. “‘They say, ‘Oh, well, the AI thought that was a good strategy.’ Well, in-universe, that might be a good strategy, but it’s not a good strategy for you.”
Lawyers for the wealthy told Inside Wealth that their clients are increasingly using AI not only to research tax topics, but also to question their lawyers’ advice. While some lawyers say AI helps clients ask informed questions and learn basic concepts, they also say it poses legal challenges and risks.
Robert Strauss, a partner at Weinstock Manion, said several clients have uploaded trusted documents to AI systems and come back with a list of questions and suggested changes, forcing Strauss to defend his work and explain why the AI’s recommendations are not appropriate for the client’s situation.
“The questions are good, but it requires us to spend more time on this topic than we usually would,” he said. “We end up spending two, three, four hours dealing with things that so far have gone nowhere. I haven’t actually received any practical suggestions from that process.”
The result, he says, is a lack of trust by the client in his lawyer.
What’s more troubling, Strauss said, is that clients share sensitive information with models that use big language, raising data privacy concerns and legal pitfalls. Strauss said his firm is currently revising its client agreement to warn clients that using AI chatbots like this may void attorney-client privilege.
In February, a federal judge ruled that a criminal defendant’s conversation with Claude about his legal defense strategy was not protected by attorney-client privilege.
“What keeps me up at night when it comes to AI? It’s not that AI is bad sometimes, because I can correct those mistakes. And it’s not that people are double-checking my work on AI, because I have a lot of confidence in my work,” Dickinson said. “What concerns me is that when people submit documents and do these searches in AI, they’re waiving attorney-client privilege, and that’s a huge problem.”
Dan Griffith, director of wealth strategy at Huntington Bank, warned that asking a chatbot how to protect your assets with a prenuptial agreement or how to sell your business while paying less taxes, for example, could be used against you in court.
Although wealthy clients can generally access – and afford – the best legal advice, they, like the rest of us, benefit from the convenience of AI, according to Griffith.
Dickinson added that cost savings remain an attraction. (“It’s no fun paying for professional services,” she said.) She added that many of her clients are confident entrepreneurs.
“A lot of our clients have been very successful. I mean, they’re smart, right? And they have a thirst for knowledge,” she said. “I think some people are wrong to assume they understand more about it than they actually do.”
Using these AI tools, she says, “gives a false sense of knowledge.”
In some ways, this is not a new problem. Clients often bring suggestions to their attorney that they received from a friend at the country club or from an article. Dickinson described it as “a more evolved form of cocktail talk.”
And the trend is not unilateral. Many lawyers are using AI in their professional and personal lives. This led to headline-grabbing errors, such as memoirs containing false citations.
But few clients know enough about AI and the law to write an effective prompt, lawyers said.
Ed Renn of Withers gave the example of a client who wanted to transfer unlimited assets to his spouse on the advice of ChatGPT. The client, however, did not mention that his wife was born overseas, meaning he could not take advantage of the unlimited marital deduction without a special type of trust, according to Renn.
“If you don’t really know what you’re doing, it’s trash in and trash out,” he said.
Renn added that AI tools appear to make more errors on more complex topics such as international taxes and are not up to date with new legislation or Internal Revenue Service guidelines.
Griffith said that deciding how to transfer your wealth to your loved ones requires a more complicated discussion than ChatGPT is prepared for. There are rarely easy answers when it comes to deciding, for example, how to divide assets between children from a first marriage and a second spouse, he said.
“If your client asks, ‘Hey, if I make this trust, will my son have access to the funds I give him at some point?’ » The answer should not be “yes” or “no”. The answer should be: “Tell me more about your relationship with your son, or what is the situation?” “, he said. “AI tends to be very solution-oriented and tries to find a way to get to a yes. It doesn’t do a good enough job of saying, ‘You know what? Let’s get to the heart of your question.'”