UNIFORM LAWS U P D AT E Filling the Gap: A New Uniform Law to Address Electronic Estate Plans Background In 1999, the Uniform Law Commission (ULC) approved the Uniform Electronic Transactions Act (UETA), which gained quick acceptance, and has now been adopted by every US state except New York. UETA is a permissive statute. It does not require anyone to transact business electronically, but it states that if both parties involved in a transaction agree to conduct business electronically, the transaction cannot be denied legal effect or enforceability solely because a document or signature is in electronic form. UETA § 7. The act also provides that if another statute requires a document to be “in writing” or “signed,” an electronic record or signature suffices to satisfy the requirement. Id. Congress enacted similar legislation the following year, the Electronic Signatures in Global and National Commerce Act of 2000 (E-Sign Act). The growth of internet commerce over the ensuing two decades is largely attributable to these two laws, which provide the necessary legal basis for the enforcement of electronic transactions. However, both UETA and E-Sign Act have express exemptions for transactions governed by the law of wills. UETA § 3(b)(1); 15 U.S.C. § 7003(a)(1). When these laws were passed, most attorneys believed that electronic signatures were inappropriate for a last will and testament, reasoning that the traditional formalities of will execution and Uniform Laws Update Editor: Benjamin Orzeske, Chief Counsel, Uniform Law Commission, 111 N. Wabash Avenue, Suite 1010, Chicago, IL 60602.
Uniform Laws Update provides information on uniform and model state laws in development as they apply to property, trust, and estate matters. The editors of Probate & Property welcome information and suggestions from readers.
attestation with two witnesses served several important purposes. The formalities provide reliable evidence of the testator’s intent, protect the testator from coercion or fraud, and ensure that the instrument was in final form rather than a draft. Jumping forward 20 years, it now seems anomalous to many people that online estate-planning services still require a testator’s will to be printed onto paper and signed with ink in the presence of two witnesses. Secure electronic documents with signatures and tamper-evident properties are now common, lessening concerns about fraud. Moreover, consumer expectations have changed for a generation used to banking, shopping, and communicating online. There is a growing demand for online estate-planning services, and the law is just now catching up. The ULC addressed these issues with the approval of the Uniform Electronic Wills Act (UEWA) in 2019. UEWA allows attorneys to offer online estate-planning services yet preserves important safeguards, including the requirement for attestation and witnesses.
For a will to be considered self-proving under UEWA, it must also be notarized by an online notary, who saves the executed will in a secure format and preserves a video recording of the signing ceremony. A Gap in the Law Only months after UEWA was approved, the COVID-19 pandemic significantly increased the demand for online legal services. Lawyers wanted to meet with their clients and execute documents remotely, but the sudden increase in demand also revealed gaps in state laws. In the field of estate planning, issues are not limited to wills. In many states, there is ambiguity about whether other estate-planning documents, like trusts and powers of attorney, can be legally executed in electronic form. UEWA addresses only wills because some electronic estate planning documents are already permitted under other uniform acts, e.g., the Uniform Trust Code and Uniform Power of Attorney Act. But the validity of these documents is unclear in states that have not adopted those other uniform acts. Moreover, even though the nearly universally adopted UETA specifically exempts only wills, some of the official comments to UETA cast doubt on whether the execution of trusts and powers of attorney constitutes a “transaction,” which is defined in UETA to require the participation of two or more persons. If an estate plan is electronically executed by the settlor or principal unilaterally, it would seem to fall outside of the scope of UETA and into a legal gray area.
Published in Probate & Property, Volume 36, No 3 © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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May/June 2022
