PA Order Permitting Remote Online Notarization of Estate Planning Documents Creates Confusion

Troutman Pepper
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Pepper Hamilton LLP

The stay-at-home order in Pennsylvania due to COVID-19 has created logistical challenges for estate practitioners whose clients are trying to execute estate planning documents. From document executions outside on porches to witnesses peering through windows to “drive through” executions, estate practitioners have had to adjust their normal execution procedures to account for the reality of social distancing. By far, the greatest hurdle that estate practitioners have experienced in document executions has been the use of notaries.

Pennsylvania permits two types of notaries: “wet” signature notaries and electronic notaries. “Wet” signature notaries are “traditional” notaries who must notarize documents with a wet signature. Electronic notaries may notarize electronic documents with an electronic signature. With both types of notaries, the signor must be physically present before the notary. Under Pennsylvania law, physical presence does not include the use of electronic means to remotely observe a signing.

Pursuant to section 7301(f)(1) of the Pennsylvania Emergency Management Services Code, the governor may “suspend the provisions of any regulatory statute prescribing the procedures for conduct of Commonwealth business, or the orders, rules or regulations of any Commonwealth agency, if strict compliance with the provisions of any statute, order, rule or regulation would in any way prevent, hinder or delay necessary action in coping with the emergency.” On April 2, the Pennsylvania Department of State therefore announced that it was easing the “physical presence” requirement of notarization to allow remote online notarization (RON) of certain estate planning documents during the coronavirus emergency. In its announcement, the Department of State identified three types of estate planning documents that require notarization and three types of estate planning documents that do not require notarization but for which it is best practice to use notarization. Those requiring notarization are (1) powers of attorney, (2) self-executing wills and (3) temporary guardianships. Those that do not require notarization are (1) advance health care directives/health care powers of attorney, (2) living wills and (3) standby and temporary guardianships.

The order provides that, for each of the six categories of documents, notaries may use audio-visual communication technology as an alternative to personal appearance (i.e., through RON). These notaries must (1) become an approved Pennsylvania electronic notary, (2) use an e-notary solution already approved by the Department of State that offers remote notarization technology, and (3) indicate in the notary certificate that the notarial act involved the use of communication technology. In addition, when utilizing RON, notaries must act in accordance with the requirements of the Revised Uniform Law on Notarial Acts (RULONA) and the safeguards included in RULONA and recent RON legislation introduced (but not passed) in Pennsylvania.

Before estate planners rejoice that all of their execution problems have been solved, let’s look past the surface of the order and take a deeper dive into the practical realities of this order. First, the order provides that all notaries who use RON must be electronic notaries who use e-notary solutions approved by the Department of State. Electronic notaries in Pennsylvania have the authority to electronically notarize electronic records, which, through e-notary solutions, are electronically signed. Estate planning documents, however, are rarely, if ever, electronic documents that are electronically signed. The Pennsylvania Electronic Transactions Act (PETA), which permits the use of electronic signatures, explicitly prohibits electronic signatures of “wills, codicils, and testamentary trusts” in section 104(b)(1) of PETA. As Pennsylvania does not recognize electronic wills, the order permitting RON of self-executing wills is confusing at best and invalid at worst because the only way to use RON on a will would be to execute an electronic will, which is explicitly prohibited under PETA.

In addition to the express prohibition on the use of electronic signatures in wills, codicils and testamentary trusts, many estate practitioners believe that there is an implied prohibition on the use of electronic signatures in other estate planning documents, such as powers of attorney, advance health care directives, health care powers of attorney, and living wills. When the Uniform Law Commission drafted the Uniform Electronic Transactions Act (UETA), the basis for PETA, comment 1 to section 3(b)(1), which inserted the wills, codicils and testamentary trusts exception, provided that UETA is intended to apply to “transactions related to business, commercial (including consumer) and governmental matters.” The comment continues that, “transactions with no relation to business, commercial, or governmental transactions would not be subject to this Act. Unilateral generated electronic records and signatures which are not part of a transaction also are not covered by this Act.” (emphasis added).

It is the multilateral nature of business, commercial and governmental matters that serves to protect electronic documents from fraud. Estate planning documents, however, by their very nature, are unilaterally generated documents that are not part of a transaction. Many estate practitioners therefore believe that unless powers of attorney, advance health care directives, health care powers of attorney, and living wills are specifically executed in connection with a “transaction," they were never intended to fall within the scope of UETA and should therefore not be executed electronically. If they cannot be executed electronically, then they cannot be electronically notarized, and the  order relating to the use of RON with respect to these documents does nothing to ease the physical presence requirement in this era of social distancing.

Before jumping into the use of RON with estate planning documents, practitioners should be aware of the limitations of PETA, both express and implied. While the order may appear to be helpful in the execution of estate planning documents, practitioners should exercise caution as further clarification may be necessary to avoid the ambiguity created in permitting the RON of estate planning documents.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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