By Thomas M. Fafinski, firstname.lastname@example.org
For years, we have been able to execute business transaction documents electronically from the convenience of our home or office or even by use of a smart phone. In fact, electronically executed and stored documents have become common place even as it relates to the purchase of such significant assets as real estate. Beneficiary designations for significant assets like retirement accounts and life insurance can be handled electronically but other personal property assets require physical documents. The electronic execution of documents relating to Wills, Trusts and Estates have lagged far behind nearly every other contract or document we encounter in the course of our personal and professional lives.
Several non-lawyer services have crept into the space and created solutions for do-it-yourselfers. The primary attractions associated with these services seem to be the low cost and high convenience factor – offering the testator the ability to draft estate documents from the comfort and convenience of their home, office or otherwise. While these services tout having lawyer create documents, many have even been sued for the unauthorized practice of law. Even if the document templates were created by lawyers, they are rarely tailored to the testators individual circumstances or reviewed by counsel prior to execution. These services provide mere templates, sometimes based upon information inputted by the testator, which purport to be validly enforceable wills in all jurisdictions. While these services provide for a low-cost convenient solution and may even appear on its face to be a valid will or trust, the testator is left with doubt as to whether the online template is suitable for their situation, has been executed appropriately, or even enforceable. Additionally, there is likely no recourse if the wrong document is generated or the formalities associated with execution have failed. Unfortunately, the true test of the enforceability of such online created instruments only occur after the testator has passed and the instrument can no longer be modified as a direct result of the testator having already passed. This has generated concern in the legal community. So much so that even the American Bar Association created a task force to study the issue. The American Bar Association created task force identified a number of issues causing concern and detailed those concerns in a report. See https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/diy_estate_planning/.
The American Bar Association task force concluded that “a person may have a false sense of security that he has addressed the disposition of his estate, only to have it discovered (after death) that important issues were not addressed. This could lead to increased difficulty and expense in the administration of the estate, with the prospect of litigation among the intended objects of the decedent’s dispositions. For those reasons, at least on preliminary review, that the average person should proceed with caution in using DIY estate planning as a substitute for a proper, professionally-drafted plan.”
One of the primary reasons for turning to the online, non-lawyer prepared documents for estate plans involve the costs associated with generating the document. As discussed in greater detail below, Virtus Law has addressed the costs aspects by having a mixed solution of an online experience while maintaining legal representation throughout. A lawyer actually creates the final estate documents and even oversees the execution. The solution bears the hallmarks of convenience and cost effectiveness comparable to the non-lawyer, online services. Admittedly, the cost may be slightly higher, it is still extremely competitive with the online services.
While the cost and convenience of these non-lawyer services is attractive, there could be significant downsides to not having an attorney. Additionally, most of the steps associated with estate planning can be accomplished with a lawyer in a truly virtual format and at the lower cost points. The execution requirements (i.e. having the signature by the testator on the will be witnessed by multiple people and notarized) still require having witnesses and a notary in the physical presence of the testator. These same requirements exist for the non-lawyer documents created and/or generated by these non-lawyer services. Virtus Law has coached clients through this process by handling the execution through a video conference with the witnesses and notary present in the testator’s home or office.
Even though Virtus Law has been able to overcome requiring the testator to be present at our office, we have found that the formal execution requirements have caused some to procrastinate with regard to the handling of their most important family and financial affairs. Virtus Law has tried to adapt by providing solutions around the barriers and it appears as though several of these barriers will soon be altogether removed by the legislature if it allows such documents to be electronically executed. A path to the electronic execution is opening.
However, an examination of the electronic signature trend begins with the passage of the Uniform Electronic Transactions Act in 1999. The Uniform Electronic Transactions Act paved the way for recognizing contracts executed electronically. Then in 2000, the Electronic Signatures in Global and National Commerce Act (“E-sign Act”) passed Congress and applied to interstate commerce. Most states followed the path blazed by the Uniform Electronics Transactions Act and the E-sign Act. Forty seven states passed legislation allowing for electronic signature of documents, except as it related to wills.
Both the Uniform Electronic Transactions Act and E-sign Act specifically excepted the execution of estate or will instruments from its scope. Because wills and trusts are interpreted after the testator is deceased, formal written execution continued in nearly every state. Nevada was the only state that actually passed legislation early on when, in 2001, it allowed for wills to be signed electronically. Other jurisdictions did not follow.
Years later, in 2017, Florida Governor Rick Scott vetoed legislation following Nevada’s lead out of concern for “the right balance between providing safe- guards to protect the will-making process from exploitation and fraud while also incorporating technological options that make wills financially accessible.” (See http://www.flgov.com/wp-content/uploads/2017/06/HB-277-Veto-Letter. pdf)
Governor Scott reasoned that the law did not ensure authentication of the identity of parties, allowed nonresidents of Florida to probate their wills in Florida which could potentially overburden its courts and could create confusion with the acceptance of the Florida court’s decisions in other states. Scott also had concerns revolving around the legislature’s decision to delay the implementation of remote witnessing and remote notarization. Other states also introduced legislation seeking to make electronically executed wills enforceable but none have yet passed. Even if states other than Nevada were to pass enabling legislation, it would only be effective in the states adopting the electronic execution provisions.
There has been some progress in the electronic execution arena with courts applying a harmless error analysis. The Tennessee courts in Taylor v. Holt, 134 S.W.3d 830, 831 (Tenn. Ct. App. 2003) addressed an electronically signed will, despite the lack of a state law allowing for wills to be executed electronically. The case involved an individual who created his own will on his personal computer and used a cursive font in lieu of his signature, leaving all of his assets to his girlfriend. His cursive signature was witnessed by two of his neighbors. When his sister challenged the will, the Tennessee Court of Appeals determined that the will met the requirements of being executed since it was “any other symbol or methodology executed or adopted by a party with intention to authenticate a writing or record.” An Ohio court also found that a galaxy stylus created will on a galaxy tablet to be valid, holding that the laws do not require that it be written on a particular medium. In re Estate of Javier Castro, Deceased, 2013-ES-00140 (Ct. Comm. Pl. Lorain Cnty., Probate Div., Ohio, June 19, 2013). The cost associated with relying upon such doctrines, like the cost of fully litigating the case, begs for enabling legislation.
Now, a giant step forward for the Wills, Trusts and Estates industry has been cleared by the Uniform Law Commission. The Uniform Law Commission recently approved the Uniform Electronic Wills Act. Under the Uniform Electronic Wills Act, the signature has to be witnessed or notarized in conformance with state law and stored in a tamper-evident format. The Act also has provisions allowing for the will to be witnessed remotely. If enacted by individual states, wills executed electronically within that state will be enforceable. It is worth noting that there is not a clear indication of the enforceability of electronic executions of estate documents which predate the effective date of the model legislation.
The Act permits electronic estate documents, like wills, and allows probate courts to recognize electronic estate documents as being fully valid and enforceable. The Act has to be adopted and enacted by a state for it to have affect in the state and, therefore, serves as a model Act in the same way that the Uniformat Electronic Transactions Act.
Minnesota also enacted legislation last year providing for remote notarization. The effective date for remote notarization is January 1, 2019. Some estate documents require notarization so remote notarization is an important development in the trend toward estate planning as a truly virtual experience. “With the passage of SF893, Minnesota notaries will gain the ability to serve their clients and legally notarize documents online for the first time ever. Remote notarization is safe, secure and convenient for everyone. The passage of this bill is testament that we’re continuing to modernize how the MN government serves its constituents by providing easy access to business and government services. Minnesota is proud to be a leader in the electronic age of document authentication.” – Rep. Dennis Smith, MN. While the notary has to be physically present in Minnesota when notarizing the document, the signor can be anywhere in the world. This means that estate documents can be prepared while the testator is traveling abroad. There are also provisions allowing for both the signor and the notary’s signature to be accomplished electronically.
Estate planning has traditionally been relegated to the offices of the estate planning attorney. Estate planning attorneys typically require clients to come to the offices of the estate planning attorney. With so many of my clients, this has proved to be a “convenience” obstacle. To address the busy lives of our clients, we started having estate planning design, discovery and delivery at the client’s home or office. For some, they still wanted the convenience of a truly virtual experience. As a result, we started providing for virtual estate planning several years ago, relying upon video conference technology. Even then, the document execution phase remains a minor obstacle to a completely virtual experience.
Part of proper estate planning requires discovering the hopes, goals, dreams and fears of the testator as it relates to the disposition of the testator’s assets. We accomplish this through discovery and design meetings. Our discovery and design meetings have been handled via video conference in the comfort and convenience of the client’s home or office (if the client does not want to travel to one of our offices) and, after documents were exchanged electronically (in draft format) and then explained via video conference while the draft documents prominently shared on the screen with the video, execution was still not something that could be accomplished virtually. The execution of the documents require the physical presence of witnesses and a notary, as explained above. To overcome this minor obstacle, detailed instructions are provided to the client. An attorney at Virtus Law will even monitor, by video conference, the remote execution of the estate documents. While our clients are also invited to one of our 6 locations throughout Minneapolis, St. Paul, (Brooklyn Park, Edina, Maplewood, Mendota Heights, Cambridge or Red Wing) for a very quick signature ceremony (or we go to their home or office), with these written instructions or video conference monitored execution ceremonies, clients can execute the documents in their home with witnesses and a notary.
To truly address the cost barrier, for less complicated estate planning, including designating guardians and an outright distribution of assets to the surviving spouse (or their designated heirs if both spouses have passed) there is the semi-automated simple will program created by Virtus Law. By going to https://www.virtuslaw.com/simple-will/, our client is able to complete some simple online questions while navigating them with the assistance of video tutorials. Upon completion of the online questions, the information is forwarded to Virtus Law for the completion of a draft of a will. Then there is an execution ceremony consistent with the above described execution alternatives. The semi-automated simple will system is an online, browser-based system that allows you to spend as much time as you would like to complete the data information and view the tutorials. Since Virtus Law invested significant time in developing the video tutorials explaining some of the more routine aspects of estate planning, Virtus Law has been able to significantly reduce the cost associated with drafting the estate planning which provides for outright distributions to designated heirs upon your passing.
The information that is inputted into the system is stored and delivered through a secure information packet to Virtus Law. The draft versions of the will are then created and reviewed by our team, including one of our lawyers, so that you do not have to wonder if the format is compliant with Minnesota law. Our “simple will” is one of the most comprehensive wills (whether simple or complex) I have encountered in my roughly 30 years of practicing law. It derives its title as “simple will” because the method of distributions – outright to heirs – is a simple distribution method. Upon completion of the document, a draft is delivered for your review and your input. A video conference-based delivery mechanism is available, or the client can have a formal execution ceremony. The execution ceremony can be conducted in the client’s home, office or at one of our many offices – again, arranging for 2 witnesses and a notary. However, it looks like, eventually, even more complicated documents will be able to be electronically executed and perhaps even remotely notarized.
While Virtus Law’s solutions for virtual estate planning (from a simple will to a complex trust) still successfully overcome the requirements of having the client physically present in the office of the attorney consistent with traditional estate planning, it appears as though the final obstacle surrounding execution of the estate documents (being completed in the physical presence of witnesses and a notary- executing the documents electronically) will be coming to an end. An even more convenient method of completing estate planning (for simple estates to complex estates) is now on the horizon with the approval of the Uniform Electronic Wills Act by the Uniform Law Commission. If you would like to pursue a virtual estate plan, please contact Thomas Fafinski at email@example.com. Virtus Law has similar virtual solutions for financial power of attorneys, healthcare directives, HIPAA authorizations, business and succession documents like entity formation, buy-sell or share purchase agreements, governing documents for entities and other business transactions.