Published in NH Bar News (3/18/2020)
In January 2017, SB 40 was introduced to the New Hampshire Senate to enact legislation allowing electronic wills, which at the time, generated much interest and controversy. The bill moved through the Senate, but died in in the House in May 2017 and has not (yet) been reintroduced. But that day is almost certainly not far off.
At that time, Nevada was the only state to have adopted a statute providing for electronic wills. Since then, however, Indiana, Florida and Arizona have all adopted statues in various forms permitting digital signatures on, and storage of, an electronic will. While these issues are a relatively recent topic of debate among estate practitioners around the country, the electronic execution and storage of documents is the preferred method for many commercial transactions. In recognition of this trend, the Uniform Law Commission approved the Uniform Electronic Wills Act (the “Act”) in July 2019.
At the recent Heckerling Institute on Estate Planning Conference, a consensus that emerged was, at a minimum, that practitioners had better be ready to adapt and embrace this trend, because as Forbes Magazine columnist Bob Carlson observed, “ . . . slowly, but surely, estate planning is catching up to modern technology”. Many attendees felt that adoption of electronic wills in some form is inevitable, particularly now that a Uniform Act dealing with this issue has been approved. Many states will soon be considering updating their probate codes to incorporate electronic wills and New Hampshire is likely no exception.
1. Rationale and Momentum
The practice of electronically signing and storing documents for commercial transactions is widely practiced and accepted. Financial institutions also allow clients to make beneficiary designations electronically online. Despite technological advances in other areas, the execution of many estate planning documents has remained embedded in paper and pen. While the reasons for the rituals of executing paper estate planning documents are widely understood, limiting the execution of wills to traditional methods misses an opportunity to join the wave of technological innovation and client convenience.
2. New Hampshire Law Today
In September 2001, New Hampshire enacted the Uniform Electronic Transactions Act which permits transactions to be conducted between parties via electronic records of legal documents and electronic signatures. RSA 294-E et seq. The Uniform Electronic Transaction Act, however, specifically does not apply to any law governing the “creation and execution of wills, codicils or testamentary trusts”. RSA 294-E:3 II(a). Today, New Hampshire law requires that a valid will be (1) in writing (2) signed by a qualified testator, and (3) signed by two or more uninterested witnesses. RSA 551:2. However, it is important to note that under RSA 551:5, a will made out of state that is valid according to the laws of that jurisdiction is effective in New Hampshire.
3. The Act - Key Elements
The Act is designed to apply to wills and codicils, but not trusts (other than testamentary trusts). An electronic will is a will that is readable as text at the time the testator electronically signs the document. The testator’s signature must be witnessed by two people who add their own electronic signatures. The Act provides two options for witnessing: the first requires witnesses to be physically present in the same location as the testator when signing the electronic will (similar to Indiana’s approach); the second only requires the witnesses to be “electronically present” through electronic means with the ability to see and hear the Testator in real time (similar to Florida’s statute). The Act also includes language for self-proving wills that fits into the Revised Uniform Law on Notarial Acts of 2018 or similar laws that permit electronic, online notarization.
4. What Issues Are Raised by Electronic Wills?
One the most controversial issues is the effect of having witnesses appear remotely. By having at least two witnesses appear in person, the ritual of the document signing signals to the Testator that executing their will is an important legal act. Second, witnesses are able to testify in the future if the will is challenged for undue influence or lack of capacity. There is concern that will contests may become more common with witnesses appearing remotely via telephone and/or video. Florida, has adopted involved and lengthy processes under its notarial acts statute requiring the Notary to ask the testator a number of questions to determine if the testator is a “vulnerable person” under Florida law, which would require witnesses to be physically present at the time of signing. FSA 117.285.
Revocation of a typical will is accomplished by a subsequent document or some affirmative destructive act. Under the Act, a subsequent document may revoke an electronic will. However, is deletion of one electronic copy the same as the revocation of all electronic copies? How can beneficiaries be sure the testator revoked the document and not some other party?
Estate planning attorneys often hold the original signed documents for their clients, but who is responsible for the electronic will? While the Uniform Act is silent, statutes in Arizona, Nevada, Indiana and Florida all define a qualified “custodian” authorized to hold and maintain the electronic will. In some cases this qualified custodian is not the testator or attorney. With data breaches and other security concerns, these states and New Hampshire will need to be prepared for a growing need for secure maintenance of estate planning documents.
The need for New Hampshire practitioners to deal with electronic wills appears inevitable. Many of our clients are “snow birds” who spend time in states with electronic will statutes. New Hampshire probate courts will begin to see electronic wills being offered for probate. Though electronic wills may well provide convenience for our tech-savvy or elderly clients, there are plenty of issues regarding revocation, remote witnessing and notarization, and fraud prevention that need to be carefully considered for New Hampshire’s own electronic wills statute.
Linda Garey and Christina Krakoff are members of McLane Middleton’s Trusts & Estates Department. Admitted in New Hampshire, Linda can be reached at (603) 628-1325 or [email protected]. Admitted in Pennsylvania, Christina can be reached at (781) 904-2684 or [email protected].