This article is being written against the backdrop of the COVID-19 pandemic. As with society in general, the legal community has scrambled to keep firm clients, lawyers, paralegals, staff and their families safe while shifting to alternative work arrangements. Social distancing practices make things that were relatively easy to accomplish before the epidemic much more difficult.
The “Formalities” Hurdle
For Maryland estate planning lawyers, one challenge arises from the kind and character of the “formalities” required by various documents. Maryland law controls the degree that various estate planning documents required in-person witnessing and/or notarization. Prior to the health emergency declared by Governor Hogan, these rules were well established. Wills require two witnesses who sign in the presence of the testator/testatrix. Grout v. Sundberg, 213 Md. App. 144, 161-2 (2013). Powers of attorney require two witnesses and a notary. Est. & Trusts § 17-110 (a). Health care directives generally require two witnesses although an electronic advanced directive where the declarant’s identity has been properly authenticated eliminates the necessity of witnesses. Health Gen § 5-602 (c). Under these well-established formality requirements, remote execution of many estate planning documents was not possible.
Pre-COVID Remote-Electronic Transactions
Maryland has two statutes, however, that permit remote-electronic transactions. The older statute is the Maryland Uniform Electronic Transaction Act which is part of the commercial law statute. These provisions permit remote-electronic transactions to take place with virtual signatures. The type of transactions contemplated by the Act are bilateral contracts. Real estate contracts, for example, are generally now exclusively remote-electronic contracts. Section 21-102 of the Maryland Uniform Electronic Transaction Act specifically excludes Wills as being a document that can be accomplished under the Act. Wills, of course, are unilateral documents and not bilateral contracts which presents unique concerns as to the efficacy of such a document.
The second Maryland statute is the Revised Uniform Law on Notarial Acts (2018) which was enacted last year but effective October 2020. This statute permits a notary to attest to a document of a “remotely located individual” if the signing individual and the notary are able to communicate with each other simultaneously by sight and sound. Physical presence is not required. The Maryland Power of Attorney Act requires two witnesses and a notary. Est & Trusts § 17-110 will permit, once the remote notary act becomes effective, that a power of attorney may use “communication technology” pursuant to the State Government Act § 18-214 (the new Notary Act) for the purposes of notarizing a power of attorney.
The Maryland Pre-COVID Statutes Did Not Help Estate Planning
Neither of these statutes facilitated estate planning under COVID-19 conditions because one statute specifically excluded planning documents from its scope and the other will not be effective until October. Fortunately, Governor Hogan issued two executive orders that filled the gap – one dated March 30th permitting remote notarization and one dated April 10th covering remote witnessing.
End Runs Around the Maryland Formalities Statutes
Before these executive orders, planners could use several “work-arounds” to avoid the formality requirements of Wills or health care directives. A Declaration of Trust could act as a Will substitute. It only requires the settlor’s signature and would side-step needing a recordable deed or other formal acts to fully fund it. See Est. & Trusts § 14.5 (2) (creation of trust) and Real Prop. § 5-105 (writing required for declaration of trust). Once established, a declaration of trust would be a substitute for a power of attorney to the extent “funded” as well as being a Will substitute at death. Health care directives generally require witnesses, however, by statute “any authentic expression made by an individual while competent of the individual’s wishes regarding health care for the individual shall be considered.” Health Gen. § 5-602 (a)(1). This is undoubtedly a person’s constitutional right. Cruzan v. Dir., Mo. Dep’t of Health, 497 U.S. 261 (1990). Thus, a signed, but un-witnessed, health care directive with an explanation that it is executed during the health care emergency should be enforceable. Since the two executive orders, a whole range of traditional estate planning documents now can be remotely witnessed and/or notarized assuming the client has access to audio/visual technology. For clients without that capability, however, the work-around techniques are still useful.
Maryland Planning Under the Executive Orders
Two executive orders issued by Maryland Governor Hogan made estate planning much easier during the COVID-19 crisis.. The combined effect of these two executive orders permit remote witnessing and remote notarization during the pendency of the state of emergency. A Will, power of attorney and a health care directive may be remotely witnessed under Executive Order 20-04-10-01 (the “Remote Witnessing Order”). To comply with Maryland law, however, the required witnesses must be in the “electronic presence” of the person signing the document. This requires video conferencing to permit all the various individuals to observe and communicate with each other to the same extent as if physically present in the same location.
Remote Witnesses Are Permitted
Under the Remote Witnessing Order, a “supervising attorney” must oversee the remote witnessing and take reasonable steps to assure that the witnessing follows the proscribed rules. The supervising attorney, however, cannot be one of the witnesses.
At the end of the process the supervising attorney assembles the signed estate planning document and the signed conformed copies of the original signed by the witnesses. That package becomes the completed, fully executed estate planning document.
The Remote Witnessing Order also permits the person signing to use an electronic signature, much like real estate and other contracts are commonly “signed” under prevailing commercial practice. For estate planning documents, however, perhaps this should be avoided unless no other option is workable. An electronic signature introduces an additional proof issue as to whether it was, in fact, signed as claimed. Unlike contracts, estate planning documents are unilateral and lack a process of negotiation that can supply an element of verification.
Remote Notary Is Permitted
An individual need not be in the physical presence of a notary public if rules are followed as set out by the Maryland Governor’s emergency Order Number 20-03-30-04 (the “Remote Notary Order”).
Like the Remote Witnessing Order, a remote notary must use “communication technology” permitting real-time communication among the various participants. The notary must confirm that the document being notarized is the same as the document being signed. The remote notarization is recorded, and the audio-visual record preserved for 10 years. These rules are part of a process designed to reduce trickery or fraud. Like the presence of a supervising attorney, it is meant to create a likelihood that the documents being signed are free from fraud, duress, and/or undue influence.
Is Maryland Headed Toward a More Permanent Solution?
The Remote Witnessing Order and Remote Notary Order are temporary. Both may promote interest in a model act approved last year by the commissioners on Uniform State Acts as the Uniform Electronic Wills Act (the “E-Wills Act”).Various states, not Maryland, have enacted, or at least introduced legislation, permitting electronic Wills. The E-Will Act has remote execution provisions somewhat similar to the two orders and it further permits “Wills” to be in pure electronic form.
As far as the remote witnessing aspects are concerned, the executive orders have a feature that would improve the E-Will Act. The uniform act does not provide for a supervising attorney to oversee the process which was seen as a protection against fraud or other skullduggery. A Maryland E-Will statute should provide that if executed under a supervising attorney it would carry a presumption of validity like the effect that an attestation clause signed by witnesses in the physical presence of the testator/testatrix has under current law. Van Meter v. Van Meter, 183 Md. 614, 617-18 (1944). If not so supervised, the electronic Will could still be accepted if its due execution is established by clear and convincing evidence.
A second difference between the executive orders and the E-Will Act is that the executive orders do not fundamentally change the importance, indeed necessity, of following the procedures involved in creating a Will. The rules governing traditional Wills, contained in the Wills acts or Statute of Wills, are protocols that are meant to protect against improper conduct. The witnesses are present and able to observe the testator signing or acknowledging the Will. Under the executive orders, witnesses are still present albeit in “electronic presence” but they are still able to serve this protective function. Also, the formal ritual in executing a Will increases the appreciation of the serious intent that the Will reflects.
The uniform E-Wills Act encourages an option for a “harmless error” doctrine which would excuse failure to follow the formalities of remote execution if the proponent of the document or record establishes by “clear and convincing evidence” that the decedent intended the record to be his or her Will. The harmless error doctrine was included in the Uniform Probate Code in 1990 and, since then, only 11 states have adopted the rule. Although popular in academia, the harmless error rule has not gained much currency among the states. The approach to remote witnessing of Wills permitted by the emergency executive order does not relax the requirement of two witnesses it merely permits the electronic presence of those witnesses.
During an event such as the coronavirus epidemic, an E-Will statute has obvious appeal if only to make permanent the remote execution of estate planning documents. Because it is such a departure from existing law and because it raises concern whether it adequately safeguards against fraud and undue influence, however, it should not be pushed through on an emergency basis. Ironically, the two executive orders created in the COVID-19 emergency are likely to be a precursor to a more permanent statute. The Maryland Estates and Trusts Bar should use its experience dealing with the executive orders to help craft a suitable statute that permits electronic execution of Wills and other estate planning documents (perhaps also permitting wholly electronic documents) while preserving the safeguards of the historic procedure.
Our experience using both remote witnessing and remote notarization has been positive. Many of our client are appreciative that traditional estate planning can be effectuated without leaving the safety of their homes. These same techniques, however, ought to be permitted in a post-COVID world. Often clients wish to accomplish last minute planning before leaving on a trip. Remote witnesses and notarization would eliminate a trip to the lawyers office on top of other last minute chores before departure.