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Danger Will Robinson: The New Frontier of Remote Online Notarization and Electronic Wills

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On June 7, 2019, to the delight of some practitioners and the horror of others, the future of remote notarization and electronic wills became a reality in Florida. With the passage of House Bill 409 into law as Laws of Florida Ch. 2019-71, titled “Notaries Public — Electronic Transactions” (the act), Florida has taken a great step forward into the world of technological advancements by allowing notaries to perform notarial acts remotely using audio-video communication technology and enabling the execution of electronic wills. The act becomes effective on January 1, 2020 (except the provisions relating to electronic wills,[1] which become effective on July 1, 2020), giving notaries and lawyers a short window of time to familiarize themselves with the new legislation and prepare for a new technological age of remote notarization and electronic wills.

The act does three things. First, it adds a new Part II to F.S. Ch. 117, which governs the online notarization of electronic documents. It also amends various other provisions of the Florida Statutes concerning transactional documents that are required to be notarized or witnessed to incorporate references to remote notarization. Lastly, the act includes provisions recognizing and regulating electronic wills and other estate planning documents.

Remote Online Notarization

The act is heavy on the nuts and bolts of becoming an online notary public and how to accomplish a remote notarial act, including details on the recording requirement, electronic journaling, witnessing electronic documents, and security and storage of electronic documents by qualified custodians.

At the outset, it should be noted that electronic documents are not new to Florida. In 2000, the legislature adopted the Uniform Electronic Transaction Act,[2] and in 2007, it adopted the Uniform Real Property Electronic Recording Act.[3] The act took electronic documents to another level by making it possible for documents to be notarized online when the notary and the principal are in different physical locations and are connected only via audio-video communication technology.

The legislation refers to the person whose signature the online notary is acknowledging electronically as the principal (distinguished from the principal who signs a power of attorney under Ch. 709).[4] The person who performs a remote notarial act and is registered with the Department of State to do so is referred to as the “online notary public.”[5] The acronym RON stands for “remote online notary,” and the software companies that offer the necessary technology are called RON service providers.[6] The statute requires online notarizations to occur using “audio-visual communication technology,” meaning technology in compliance with applicable law that enables real-time, two-way communication using electronic means in which participants can see, hear, and communicate with one another.[7] F.S. §117.225 provides detailed instructions setting the requirements for registration as an online notary public in Florida, including requiring online notary publics to be both bonded and insured.[8]

An online notary public is subject to the same rules and regulations as a traditional notary public (plus those applicable only to online notarizations) and may perform any of the functions of a traditional notary, other than solemnizing a marriage ceremony.[9] A Florida online notary public located in the state can perform a notarial act no matter where the principal or any witnesses are physically found (and a commissioner of deeds may perform an online notarization while outside Florida), and Florida law will govern the validity of the online notarization.[10] An online notary public may only charge up to $25 per online notarization[11] and up to $20 for making and delivering an electronic copy of an electronic record.[12] The act requires online notary publics to keep a secure electronic journal of the online notarizations they perform, which must include certain information described in F.S. §117.245.[13] The online notary public is required to retain an uninterrupted and unedited copy of the recording of the audio-visual communication, which must include, among other things, a declaration by the principal that his or her signature is being made knowingly and voluntarily.[14]

Before performing an online notarization, the online notary public is required to confirm the identity of the principal by either personal knowledge or complying with each of the following: 1) remote presentation of a government-issued identification credential by the principal; 2) credential analysis of each government-issued identification credential; and 3) identity proofing of each principal in the form of knowledge-based authentication or another method of identity proofing.[15] It is anticipated that this process will include written questions that the principal will answer through written or click-through questions, similar to those used when applying for a credit card. Until the Department of State adopts specific standards for identity proofing, F.S. §117.295(3) sets forth the threshold requirements for identity proofing. These include presenting the principal with five or more questions with a minimum of five possible answer choices per question, drawn from third-party providers of public and proprietary data sources and identifiable to the principal’s Social Security number or similar identifying information, and under a two-minute time constraint per question, the principal must answer at least 80% of the questions correctly with only one chance to retake the quiz.[16] Witnesses are required to go through the same authentication procedures as a principal.[17]

Once authenticated, the principal, witnesses (if any) and the online notary are connected via audio-visual communication technology and the recording must begin. The recording must include all of the following: appearance by the principal and any witness before the online notary public; confirmation of the identity of the principal and any witness; a general description or identification of the records to be signed; a recitation at the commencement of the recording by the online notary public of information sufficient to identify the notarial act; a declaration by the principal that his or her signature on the record is knowingly and voluntarily made; and all of the actions and spoken words of the principal, notary public, and any required witness during the entire online notarization, including the signing of any records before the online notary public.[18] The recording must be retained for at least 10 years (with separate requirements to apply under Ch. 732 for the online notarization of electronic wills).[19]

Failure to comply with the online notarization procedures will not automatically make the notarial act void. Nevertheless, such failure may be introduced as evidence to establish violations of Ch. 117, or as an indication of possible fraud, forgery, impersonation, duress, incapacity, undue influence, minority, illegality, unconscionability, or for other evidentiary purposes.[20]

Electronic Wills

While the rules for the execution of electronic estate planning documents are contained in the same legislation as the new online notarization provisions described above, the provisions relating to electronic estate planning documents differ significantly. Estate planners advising clients who wish to execute their estate planning documents electronically are cautioned to pay close attention to these provisions.

Historically, for a testamentary instrument to be valid, the witnesses to the estate planning documents were required to be physically present with the testator at the time of execution.[21] The act amends F.S. §731.201 to include electronic wills under the definition of a will.[22] Any requirement that an individual sign an instrument in the presence of others may now be satisfied by those others being present and electronically signing using audio-video communication technology in accordance with the requirements of Ch. 117.[23]

New F.S. §732.521 defines an “electronic will” as a testamentary instrument, including a codicil, executed with an electronic signature by a person in the manner prescribed by the act, “which disposes of the person’s property on or after his or her death and includes an instrument that merely appoints a personal representative or guardian or revokes or revises another will.”[24] This includes a trust with testamentary aspects under Ch. 736, a health-care advance directive, a waiver of spousal rights under F.S. §§732.701 or 732.702 or a power of attorney authorizing any of the banking or investment powers enumerated in F.S. §709.2208 (collectively described as estate planning documents).

While the act allows a principal to electronically execute a power of attorney using an online notary and/or witnesses, the legislation does not allow a principal to grant his agent any of what attorneys refer to as the estate planning “superpowers” using electronic witnesses or notaries.[25] More specifically, F.S. §709.2202(1) requires that certain grants of authority contained in a power of attorney must be separately signed or initialed by the principal to be valid.[26] These superpowers include the power to 1) create an inter vivos trust; 2) with respect to a trust created by or for the principal, amend, modify, revoke, or terminate the trust when the trust instrument explicitly provides for amendment, modification, revocation, or termination by the settlor’s agent; 3) make a gift; 4) create or change rights of survivorship; 5) create or change a beneficiary designation; 6) waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan; and 7) disclaim property and powers of appointment.[27] The remote grant of these so-called “superpowers” can be accomplished in a power of attorney that is remotely notarized only if the subscribing witnesses are in the physical presence of the principal.[28] A power of attorney containing these superpowers, which is executed remotely, will only be valid as to the nonsuperpowers being granted therein.[29]

The legislation makes a variety of other changes to the Florida Probate Code dealing with the implementation of electronic wills in Florida that are worth noting. In F.S. §732.522(4), it clarifies that an electronic document will be deemed to be executed in Florida if the instrument states that the person creating the instrument intends to execute and understands that he or she is executing the instrument in, and pursuant to the laws of, Florida.[30] Note the statute does not actually require the person to be in Florida, just that the instrument must state that the testator is executing it in Florida.[31]

Traditionally, a testator revoked a will or codicil when the testator or someone in the testator’s presence burned, tore, canceled, defaced, obligated, or destroyed the will or codicil with the intent and purpose of revoking the document.[32] A testator can revoke an electronic will or codicil when the testator or someone in the testator’s presence deletes, cancels, renders unreadable, or obliterates the electronic will or codicil with the intent and purpose of revoking the document.[33] The statute adds that for purposes of revoking an electronic will or codicil, the revocation must be proved by clear and convincing evidence (a higher evidentiary standard).[34] If the recording of the audio-video communication relating to the online notarization of an electronic will cannot be produced, the electronic will be treated as lost or destroyed subject to F.S. §733.207.[35]

To make an electronic will self-proving, the acknowledgment of the electronic will by the testator and the affidavits of the witnesses must be part of the electronic record containing the electronic will, be attached to or logically associated with, electronic will.[36] The electronic will must designate a qualified custodian and the electronic record that contains the electronic will must be held in the custody of a qualified custodian at all times before being offered to the court for probate.[37] The statute requires the qualified custodian, who has custody of the electronic will at the time of the testator’s death to certify, under oath, that to the best knowledge of the qualified custodian, the electronic record that contains the electronic will was at all times before being offered to the court in the custody of a qualified custodian and that no one has altered the electronic will in any way since the date of its execution.[38] F.S. §732.524 defines who may serve as a qualified custodian and how it intends qualified custodians to operate.[39] It requires qualified custodians to store electronic wills using a secure system; to furnish for the court information such as the qualified custodians’ practices related to the creating, sending, and storing of electronic wills; and to provide access to the electronic will and record to the testator, the testator’s personal representative, and others defined in the statute.[40] The statute also details the procedure for destroying an electronic will, for transferring the electronic will to a successor-qualified custodian, and for removing a qualified custodian.[41] A qualified custodian is only held liable for damages caused by the negligent loss or destruction of the electronic record.[42] A testator may request a paper copy of his or her electronic will or record and the qualified custodian may not charge a fee for doing so,[43] but note that the qualified custodian may charge a fee for providing access to or downloads of the electronic will.[44] Upon learning that a testator is deceased, the qualified custodian is required to deposit the electronic will with the court.[45]

H.B. 409

Many are wondering how the legislation will work in practice once it becomes effective and the online platforms become operational. Until then, there are a few areas of immediate concern worth examining.

A primary concern many have with the legislation is the purported protection built into the act meant to protect those citizens who the legislature has deemed most vulnerable to exploitation when executing estate planning documents. The legislation requires that the principal answer a series of three “yes” or “no” questions designed to identify whether the testator is a “vulnerable adult,” as defined in F.S. §415.102(28). A vulnerable adult is “a person 18 years of age or older whose ability to perform the normal activities of daily living or to provide for his or her own care or protection is impaired due to a mental, emotional, sensory, long-term physical, or developmental disability or dysfunction, or brain damage, or the infirmities of aging.”[46] The act requires the principal answer the following questions in substantially the same form as prescribed in F.S. §117.285(5): 1) Are you under the influence of any drug or alcohol today that impairs your ability to make decisions? 2) Do you have any physical or mental condition or long-term disability that impairs your ability to perform the normal activities of daily living? 3) Do you require assistance with daily care?[47] If the principal answers yes to any of these questions, the principal may no longer execute a document outside the physical presence of witnesses.[48] Interestingly, the statute does not require this exchange to be recorded as part of the audio-visual recording, and many anticipate these questions will be part of a series of click-through screens instead of verbal questions and answers. For a variety of reasons, whether because the principal does not realize they are a vulnerable adult, or because the principal is embarrassed to admit they need or receive assistance, or because the principal knows they are a vulnerable adult but nonetheless proceeds for convenience sake, these questions may not be enough to protect vulnerable adults from executing electronic estate planning documents without realizing those documents are not valid. 
As a result, the statute attempts to provide further protection for vulnerable adults by requiring the remote notary to give the principal the following written consumer protection notice before moving forward with the remote notarization:

NOTICE: If you are a vulnerable adult as defined in s. 415.102, Florida Statutes, the documents you are about to sign are not valid if witnessed by means of audio-video communication technology. If you suspect you may be a vulnerable adult, you should have witnesses physically present with you before signing.[49]

Notably, the statute does not require the remote online notary service provider to provide the principal with the statutory definition of a vulnerable adult, without which, this warning may do little to prevent vulnerable adults who do not self-identify as such from continuing through the remote online witnessing process. If the principal does not self-identify as a vulnerable adult, and is not scared off by the consumer protection notice quoted above, F.S. §117.285(g) provides that any document signed by a vulnerable adult in the presence of a witness by means of audio-video communication technology will not be effective.[50] The burden of proof lies with the contestant of an electronic record to prove that the principal was a vulnerable adult at the time of executing the electronic documents.[51] While some have opined that the automatic invalidation of a vulnerable adult’s estate plan is a harsh consequence, such stiff penalties are not new to Florida’s wills and trusts jurisprudence. Florida has always demanded strict adherence to will execution formalities.[52] Still, without a doubt, electronic wills will be challenged regularly on the grounds that the principal was a vulnerable adult.

Once these questions are asked and the warning notice is given, the notarial act can proceed and the remote online notary can begin the process of creating an audio-visual recording of the act. The act of witnessing will only be valid if the principal provides verbal answers, on video, to the following questions asked by the online notary public: 1) Are you currently married? If so, name your spouse; 2) Please state the names of anyone who assisted you in accessing this video conference today; 3) Please state the names of anyone who assisted you in preparing the documents you are signing today; 4) Where are you currently located?; and 5) Who is in the room with you?[53] While the aforementioned yes and no questions are meant to identify vulnerable adults, the purpose of these open-ended questions is actually two-fold: to build an evidentiary record of the principal’s mental functioning and potential influencer; and to assist the notary in determining the principal’s mental capacity.

A notary public in Florida has always been prohibited from notarizing a document if it appears that the person is mentally incapable of understanding the nature and effect of the document at the time of notarization.[54] The online notary public should consider the principal’s responses to these questions in making his or her determination of whether the principal is mentally capable of understanding the document.[55] The answers to these questions may be offered as evidence regarding the validity of the instrument, but an incorrect answer may not serve as the sole basis to invalidate an instrument.[56] There was a movement years ago by estate planners to videotape will signings to use as evidence to uphold the will if there were a future will contest. This practice fell out of favor, as lawyers realized that even their healthiest, sharpest clients did not always come across at their best on video, and many began to believe these videos did more harm than good. Until these platforms become operational, it is hard to say whether the quality of the video and the controls in place will make this problem better or worse.

Once an electronic will is executed in compliance with the statute, there remain issues about the service of a qualified custodian and their responsibilities to maintain the electronic record in a way that is secure and available to the testator. While new F.S. §732.524 is lengthy and tries to anticipate and address issues regarding qualified custodians, two significant issues for testators remain. In today’s world of hackings, malware and ransomware, and other threats to online security, the statute leaves two areas up for interpretation in determining whether the qualified custodian has done enough to maintain the security of the documents it is holding. First, the statute requires that, “[i]n the course of maintaining custody of electronic wills, [the qualified custodian shall] regularly employ a secure system and store in such a secure system” the electronic records. Can such a system ever really be secure? How secure does a “secure system” need to be? We do not know whether the test for security will be an objective one, such as whether certain technological safeguards are in place, or whether the test will be more situational, and secure systems will be deemed not secure only once they have been compromised. It is also not clear what it means that a qualified custodian will be “liable for any damages caused by the negligent loss or destruction of the electronic record.”[57]

Similar concerns can be raised about the security of the recordings of the audio-video communication in which an online notarization is performed. The statute requires an online notary public to take reasonable steps to “ensure the integrity, security, and authenticity of online notarizations,” maintain a backup record of their electronic journal, and protect the electronic journal.[58] The online notary public must also keep his or her electronic journal and electronic seal secure and under his or her own control, and must attach their electronic signature and seal to the electronic notarial certificate in a manner that is capable of independent verification using tamper-evident technology.[59] The online notary public or his or her RON service provider must take reasonable steps to ensure that their audio-visual technology is secure from unauthorized interception.[60] The act gives the Department of State additional rulemaking authority to set standards for online notarization, taking into account improvements in technology and methods of assuring the identity of the principal, and the security of the electronic record, including tamper-evident technologies. Until then, the signal transmission must be reasonably secure from interception, access, or viewing and RON service providers will be deemed to have satisfied tamper-evident technology requirements by use of technology that renders any subsequent change or modification to the electronic record evident.[61] Again, until we start seeing remote online notarizations in practice, it is hard to say how RON service providers will implement the provisions of the statute and the rules that eventually employed by the Department of State.

There remains the additional difficulty of dealing with potentially new start-up technology companies who want to get into the online notarization and qualified custodian business. Some 70% of new technology companies ultimately fail around 20 months after first raising financing.[62] Thus, for example, the likelihood that a testator’s qualified custodian will still be around when the testator ultimately passes and it is time to deposit the electronic will with the court is frighteningly low.

Until we begin to see online notarizations and electronic wills in practice, we do not know how widely used they will become, how well these documents will stand up to challenge, or the ability of service providers to keep the data secure. For now, proceed with caution.

[1] Defined broadly, to include testamentary instruments, including codicils, executed with an electronic signature, which disposes of the person’s property on or after his or her death and includes an instrument that merely appoints a personal representative or guardian or revokes or revises another will. Fla. Stat. §732.521(4) (2019). Fla. Stat. §732.522 also makes the provisions regarding the acknowledgement of electronic wills, the affidavits of witnesses and other instruments signed or witnessed as required by the Florida Probate Code effective July 1, 2020. Fla. Stat. §732.522 (2019).

[2] Fla. Stat. §668.50 (2000).

[3] Fla. Stat. §695.27 (2007).

[4] Fla. Stat. §117.201(12) (2019).

[5] Fla. Stat. §117.201(10) (2019).

[6] Fla. Stat. §117.201(14) (2019).

[7] Fla. Stat. §117.201(2) (2019).

[8] Fla. Stat. §117.225(6)-(7) (2019).

[9] Fla. Stat. §117.209 (2019); Fla. Stat. §117.215 (2019); Fla. Stat. §117.235 (2019).

[10] Fla. Stat. §117.209(3)-(4) (2019); But see Fla. Stat. §117.265(3), which requires the Florida online notary to confirm, either verbally or in writing, that the principal desires the notarial act be performed by a Florida notary public under Florida law.

[11] Fla. Stat. §117.275 (2019).

[12] Fla. Stat. §117.255(6) (2019).

[13] Fla. Stat. §117.245 (2019).

[14] Fla. Stat. §117.245(2) (2019).

[15] Fla. Stat. §117.265(4) (2019).

[16] Fla. Stat. §117.295(3) (2019).

[17] Fla. Stat. §117.265(2) (2019).

[18] Fla. Stat. §117.245(2) (2019).

[19] Fla. Stat. §117.245(4) (2019).

[20] Fla. Stat. §117.265(9) (2019).

[21] Fla. Stat. §732.502(1)(c) (2003).

[22] Fla. Stat. §731.201(40) (2019).

[23] Fla. Stat. §732.522 (2019).

[24] Fla. Stat. §732.521(4) (2019).

[25] Fla. Stat. §709.2202(6) (2019).

[26] Fla. Stat. §709.2202(1) (2019).

[27] Fla. Stat. §709.2202(1) (2019).

[28] Fla. Stat. §709.2202(6) (2019).

[29] Id.

[30] Fla. Stat. §732.522(4) (2019).

[31] Id.

[32] Fla. Stat. §732.506 (2019).

[33] Id.

[34] Id.

[35] Fla. Stat. §117.245(5) (2019).

[36] Fla. Stat. §732.523(1) (2019).

[37] Fla. Stat. §732.523(2)-(3) (2019).

[38] Fla. Stat. §732.523(4) (2019).

[39] Fla. Stat. §732.524 (2019).

[40] Fla. Stat. §732.524(2) (2019).

[41] Fla. Stat. §732.524(3)-(7) (2019).

[42] Fla. Stat. §732.524(9) (2019).

[43] Fla. Stat. §732.524(8) (2019).

[44] Fla. Stat. §732.524(10) (2019).

[45] Fla. Stat. §732.524(11) (2019).

[46] Fla. Stat. §415.102(8) (2015).

[47] Fla. Stat. §117.285(5) (2019).

[48] Fla. Stat. §117.285(5)(a)-(b) (2019).

[49] Fla. Stat. §117.285(5)(c) (2019).

[50] Fla. Stat. §117.285(5)(g) (2019).

[51] Id.

[52] See In re Bancker’s Estate, 232 So. 2d 431, 433 (Fla. 4th DCA 1970) (holding that a testator must strictly comply with the statutory requirements to create a valid will); In re Neil’s Estate, 39 So. 2d 801 (Fla. 1949) (holding that where a testator fails to sign his or her will, that document will not be admitted to probate); In re Estate of Williams, 182 So. 3d 10, 13 (Fla. 1965) (holding that the signatures of both the testator and witnesses are needed to have a properly executed will); and In re Estate of Olson, 181 So. 2d 642, 643 (Fla. 1966) (holding that an unattested will should not be admitted to probate because “[t]he obvious intent of the statute requiring the attestation of a will by at least two witnesses is to assure its authenticity and to avoid fraud imposition”).

[53] Fla. Stat. §117.285(5)(d) (2019).

[54] Fla. Stat. §107.107(5) (2006).

[55] Fla. Stat. §117.285(5)(e) (2019).

[56] Fla. Stat. §117.285(5)(f) (2019).

[57] Fla. Stat. §732.524(9) (2019).

[58] Fla. Stat. §117.235(3) (2019).

[59] Fla. Stat. §117.55 (2019).

[60] Fla. Stat. §117.265(6) (2019).

[61] Fla. Stat. §117.255(3) (2019).

[62] CBI Insights, Research Briefs, Startup Failure Post-Mortems (June 19, 2019), https://www.cbinsights.com/research/startup-failure-post-mortem/.

 

Sarah S. ButtersSarah S. Butters is a partner at Ausley McMullen in Tallahassee. She is the current director of the Probate and Trust Law Division of the Real Property, Probate and Trust Law Section of The Florida Bar and has extensive experience in estate and trust litigation, estate planning, and the administration of probates and trusts.

 

 

 

Jenna G. RubinJenna G. Rubin is a member of Gutter Chaves Josepher Rubin Forman Fleisher Miller, P.A., in Boca Raton. She practices in the areas of estate and tax planning; probate and trust litigation; and probate, trust, and guardianship administration.

The authors thank Burt Bruton of Greenberg Traurig for sharing his analysis of the act, which was indispensable in the preparation of this article.

This column is submitted on behalf of the Real Property, Probate and Trust Law Section, Robert S. Freedman, chair, and Douglas G. Christy and Jeff Goethe, editors.

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