To understand why the law governing estate planning is different, a bit of legal history is helpful. Around the turn of the century when internet-based commerce was in its infancy, new state and federal laws were enacted to authorize online transactions. The Uniform Electronic Transactions Act (UETA) and the federal Electronic Signatures in Global and National Commerce Act (E-SIGN) both have the same effect: if parties elect to conduct business electronically, these laws provide that the terms of their electronic agreement are valid and enforceable, and that the parties can use electronic means to “sign” their agreement. (Interestingly, the federal E-SIGN Act contains an unusual reverse-preemption clause that allows state laws based on UETA to preempt the federal law. All but one state, New York, has enacted a UETA law.)
UETA and E-SIGN apply to transactions – i.e. bilateral agreements between two parties. By making electronic contracts valid and enforceable, these laws allowed online markets to develop and thrive. However, both UETA and E-SIGN expressly exclude wills. Under the traditional statute of wills on which most state laws are based, a will must be signed by the testator in the presence of two witnesses to be valid. The signing ceremony provides some assurance that the will represents the testator’s actual plan for devising property to survivors, and the witnesses can be called to testify in probate court if there is any doubt that the testator was of sound mind and was not subject to coercion. These safeguards are necessary because the testator is deceased at the time when disputes can arise and a court must determine whether a will is valid.
When UETA and E-SIGN were created in the 1990s, there was a fear that electronic wills would be less secure than paper wills, and subject to possible tampering by disgruntled heirs. In the 2020s, we know the opposite to be true. Secure, tamper-evident electronic documents are now commonplace, and paper documents present a greater opportunity for fraudsters. Americans who regularly use online banks, encrypted email, and financial payment apps tend to find it curious that a will must still be executed with a pen on paper to be considered secure.
In 2019 the Uniform Law Commission addressed the issue by publishing the Uniform Electronic Wills Act (UEWA) for the consideration by state legislatures. UEWA, like its predecessor UETA, is a permissive statute. It does not require anyone to make an electronic will, but it allows state courts to treat electronic wills as equivalent to traditional wills. UEWA preserves the traditional witnessing requirement, whereby two unrelated individuals certify that the testator was of sound mind, signed the will freely, and that the will represents the intent of the testator. UEWA also allows the testator to have a will authenticated and saved as a tamper-evident file by a notary public. In this way, the will can be made “self-proving,” so that the probate court will presume it to be valid unless challenged. To date, four states and the United States Virgin Islands have enacted the UEWA.
In the process of promoting the UEWA to the states, the ULC determined that the legal status of other electronic estate planning documents was in doubt. Electronic trusts, powers of attorney, and advance directives, for example, fell into a legal grey area. Unlike wills, these documents are not expressly excluded from the scope of UETA and E-SIGN. However, they also are not bilateral agreements, and thus arguably do not fall within the UETA and E-SIGN definitions of a “transaction.” Without legal certainty that electronic versions of these documents are enforceable, attorneys were loath to create electronic estate plans for their clients and courts had no statutory guidance as to their validity.
To eliminate any doubt that electronic estate plans are legal, this past summer the Uniform Law Commission approved the Uniform Electronic Estate Planning Documents Act (UEEPDA). This new uniform law will have the same effect as UETA did for electronic contracts – it does not require anyone to use electronic estate planning documents, but it provides that electronic versions of these documents are legally equivalent to paper versions, thus valid and enforceable.
UEEPDA was drafted to complement UEWA. A state that wants to allow for electronic estate planning documents of all types can easily combine both uniform acts into a single bill that validates electronic estate planning, with appropriate safeguards to ensure the integrity of the process. Both acts are available at www.uniformlaws.org.
Looking ahead a few years, its easy to imagine a world where anyone can meet with an attorney online to create and execute an estate plan – just like they routinely do today with bank accounts and business agreements.