Remote Notarization of Legal and Estate Planning Documents During the COVID-19 Crisis
On April 14, 2020, Governor Phil Murphy signed into law P.L. 2020, Chapter 26 to allow for remote notarization of documents. The State of New York had taken similar action by executive order of Governor Andrew Cuomo on March 7, 2020 and Pennsylvania’s initial regulatory provision was subsequently overruled on April 20, 2020 when Governor Tom Wolf executed SB 841 to enact a law for Pennsylvania similar to the New Jersey statute.
What is remote notarization? Some people initially think that a ‘remote notarization’ is where a notary validates execution of the principal’s signature on an electronic document. That is not what this new law does. In this circumstance, a notary uses “communication technology” to witness the signing party sign a document that is subsequently notarized by the notary. Thus, this new process can be referred to as “Remote Ink Notarization” (RIN) to be contrasted with “Remote On-line Notarization” (RON). In New Jersey, a committee of the State Bar is considering the Uniform Electronic Wills Act in which a testator could sign an electronic document and that law would set forth a series of procedures for creating electronic Wills that are subsequently notarized. At present, the concept of “electronic wills” is in its infancy. While the act has been approved by the Uniform Law Commission, it has not been enacted in any state. Moreover, New Jersey had previously enacted the “Uniform Electronic Transactions Act” N.J.S.A. 12:12-1 et. seq., which allows for electronic notarization of certain electronic documents that were previously permitted to be executed in electronic form, e.g., the federal “e-sign.” This statute explicitly prohibits utilizing this technique for Wills and Codicils.
With the new law, RIN will be permitted, but only during the term of the Covid-19 crisis. Upon the expiration of the Governor’s emergency Executive Order 103 (signed March 23, 2020), this new rule will lapse. During that time, a “remotely located individual” can use communication technologies such as “Zoom,” “Facetime,” “Microsoft Teams,” “GotoMeeting,” or other video conference capabilities to witness the execution of legal documents to be returned to the notary for subsequent notarization. When a notary utilizes this technique, there are several important requirements. First, the video conference must be recorded and the notary has an obligation to save the video for a period of 10 years. Moreover, the notary must use “identity proofing” techniques outlined in the new statute to ensure that the document being notarized is by the individual appearing before the notary. Third, the certificate for the notarial seal must indicate that it was notarized pursuant to this temporary law using communication technology. While the law is slightly unclear on the exact manner of execution, it seems that a notary should make certain that the individual is executing a document which they know and understand to be the document the notary is to notarize. The individual executing the document should return the document to the notary for the placement of the notarial seal at a subsequent date. In the opinion of the author, the notary should utilize the date of the video conference on the notarization even though it would actually be signed several days later upon return to the notary.
Because of the temporary nature of the bill, it may be prudent for cautious individuals to re-execute the documents that have notarized under the emergency statute later when the environment is safer. There is always the possibility that the use of the remote notarization will raise questions concerning execution and, thus, to be safe and if possible, it will be better for documents to be re-executed.
From an estate planning standpoint, when is this new law most useful? When clients execute an estate plan, it typically involves four legal documents, a Last Will and Testament, an Advance Directive for Health Care, a General Durable Power of Attorney, and in some circumstances, a Revocable or “Living” Trust. Of these four documents, only the execution of a Power of Attorney requires the signature of a notary N.J.S.A. 46:2B-8.9. While it is customary the other three principal estate planning documents to be notarized, as noted below, each can be executed legally without notarization.
For an Advance Directive for Health Care (“Living Will”) to be executed, N.J.S.A. 26:2H-56 provides that a valid Advance Directive can be executed by having either two witness or a notary. Thus, the execution of the document followed by two witnesses would suffice in these trying times. One requirement is that the designated health care representative cannot be one of the witnesses.
A valid Last Will and Testament can be executed in one of four means. Only one of the four means requires the notary be present. That is, a Will that is “self-proved” must be notarized pursuant to either N.J.S.A. 3B:3-4 but in New Jersey, N.J.S.A. 3B:3-5 allows the self-proving affidavit to be signed after the will is executed. To be a “self-proved” Will means that the notary attests that the testator and witnesses executed the document as a Will. If “self-proved” the witnesses need to take no further action after the testator passes away. If it is not self-proved, one witness must file a form with the local county surrogate’s office after the testator is gone that they saw the Will executed.
The other three forms of valid Will execution are i.) a Will executed in accordance with N.J.S.A. 3B:3-2(a) or ii.) a “holographic” Will executed pursuant to N.J.S.A. 3B:3-2(b) or iii.) a “Writing Intended as a Will” pursuant to N.J.S.A. 3B:3-3. None of these need be notarized. Note that, while the new law allows for remote notarization of a Will, it does NOT allow for remote “witnessing” of a Will.
The most common form for execution of a Will would be a Will established under our Wills Statute, N.J.S.A. 3B:3-2(a). With respect to this type of Will, it merely needs to be signed and witnessed by two individuals. Just about anyone that is competent can serve as a witness N.J.S.A. 3B:3-7. Even an interested beneficiary can serve as a witness. N.J.S.A. 3B:3-8. This statute provides that a Will is not invalid if witnessed by an interested party, but of course, the Will would need to be proper in every other respect. Thus, a Will can be executed at home using family members as witnesses and even using social distancing techniques. The Will is still valid without the need of a notary.
The other two forms of Will include a “holographic” (or handwritten) Will, where the signature and material portions are in the handwriting of the testator or a “writing intended as a Will.” With a Holographic Will, a testator must be careful that they are expressing testamentary intent, that they properly dispose of their wealth, that they name an executor or other fiduciary and, in most cases, remember to waive the normal bonding requirement. If in the handwriting of the testator and executed and usually dated, this is a valid Will. It will obviously help if a holographic Will is witnessed and/or notarized, but that is not necessary. As to a “writing intended as a Will,” a testator merely needs to provide his or her “assent” to the document. A “writing intended as a Will” needs to be proved by “clear and convincing evidence” in court and, thus, while appropriate in some extreme circumstances, is not the most optimal method for execution.
A Revocable or “Living” Trust merely needs to be in writing. Under our statute for creation of a revocable living trust, N.J.S.A. 3B:31-18, there is no execution requirement. It is always better to have a revocable trust signed by two witnesses and notarized because the testator may relocate to another jurisdiction where such added formalities are needed. However, it has been suggested that for some clients currently in isolation, a revocable living trust could be signed and a Holographic Will could be created to “pour-over” any assets into the trust. The Holographic Will, as noted, must make reference to testamentary intent and the appropriate other requisites.
While the new Remote Ink Notarization provisions provide welcome relief for execution of estate planning documents, they were not critical to a client concerned about their well-being and need for execution of estate planning documents. While the notarization can be done “remotely” remember that the testator must still execute the Will in the presence, presumably physical presence, of the two witnesses. The witnesses cannot be remotely located. Once the current emergency expires, it will be interesting to see whether these emergency techniques will resurface in another form.