Pennsylvania Passes Remote Notarization, Offering Some Estate Planning ReliefApril 21, 2020 – Alerts
On April 20, Pennsylvania Gov. Tom Wolf signed Senate Bill 841 ― now Act 15 of 2020 ― into law, allowing for the remote or virtual notarization of signatures on all documents. The finalized bill expands on the Pennsylvania Department of State’s April 2 order authorizing remote signing of specific estate planning documents and increases opportunities for valid document execution, which is particularly helpful to individuals looking to create or modify their estate plans.
However, other in-person requirements for signing certain documents limit the benefits of this new law in a few key ways and are likely to require clarification in the coming months. This alert highlights the changes from the April 2 order to the finalized law, summarizes the steps for valid remote notarization in Pennsylvania and raises necessary points clarification and improvement to the new law based on the unique obstacles faced by estate planning clients.
COVID-19 has highlighted the importance of having basic, updated estate planning documents in place. Whether someone is a health care worker on the front lines, a self-quarantined, at-risk individual with a preexisting condition, or anyone in between, the pandemic has demonstrated the necessity of having one’s affairs in order. In Pennsylvania, these basic estate planning documents include a will, durable general (or financial) power of attorney, health care power of attorney and living will. Many states still require an in-person notarization of a person’s “wet” (ink) signature on original estate planning documents, and in many cases these signings must be witnessed by two disinterested individuals (those who are not family members named as executors, agents or beneficiaries).
Social distancing and stay-at-home laws have made complying with these traditional, face-to-face laws increasingly difficult, but the need to solidify a current estate plan also increases with the rapid spread and harmful effects of the virus. Both the April 2 order and SB 841 attempt to strike a balance between existing signing formalities and the need for a virtual method to complete these important documents.
The April 2 Order
On April 2, the Pennsylvania Department of State issued an order temporarily suspending the in-person requirements for notarization of certain estate planning documents. Specifically, the order allowed remote notarization for powers of attorney, self-executing wills and temporary guardianships (all of which require notarization to be valid), as well as documents that are commonly notarized for “best practices,” including advanced health care directives/health care powers of attorney, living wills and standby and temporary guardianships. Notaries could notarize signatures on these documents using one of several “tamper-evident” communication technology platforms, subject to certain restrictions.
Notably, the April 2 order excluded important, commonly-used estate planning documents such as revocable trusts, beneficiary designations and codicils from the list of documents that could be remotely notarized. This limited attorneys’ and clients’ options for creating estate plans using one or more of these documents, which may have been less effective or ineffective without notarization if they attempted to execute the document remotely. The April 2 order also was unclear in several respects, including what constituted “tamper-evident technology,” as well as the logistics of how the notary would actually notarize someone’s signature — electronically, on the communication platform or otherwise.
Senate Bill 841/Act 15
Thankfully, Act 15 of 2020 greatly expands the scope of the April 2 order. The new law temporarily allows for remote notarization of all documents, not just certain estate planning documents. This means clients hoping to execute revocable trusts, codicils, beneficiary designations, and other commonly used documents, including those mentioned above, may now do so, as long as the requirements discussed below are satisfied. This law remains in effect until 60 days after the end of the declared State of Emergency due to COVID-19, though legislation is pending in the Pennsylvania General Assembly that would make these remote notarization rules permanent. The Pennsylvania Department of State’s official announcement on the passage of SB 841 also clarifies the law in several respects and provides new guidance on some of the more technical features.
Some aspects of the April 2 order are incorporated in the new law. Pennsylvania notaries planning on conducting remote notarizations must complete an online form to become a certified electronic/remote notary, as well as notify the Department of State about what communication technology provider they plan to use. Any remotely notarized documents must include a statement such as “this notarial act involved the use of communication technology” in the notarial certificate.
As with an in-person notarization, the notary can rely on the oath of a witness familiar with the person signing (usually the attorney vouching for her client’s identity through her prior personal knowledge), or the notary must request two forms of government-issued ID.
The remote notarization must occur on one of the state-approved communication and identity proofing technologies, including DocVerify, SafeDocs and Pavaso. The Department of State’s announcement indicates this technology must allow the notary to “communicate with a remotely located individual simultaneously by sight and sound” while making reasonable accommodations for individuals with visual, auditory or speech impairments. Notably, the announcement rules out the use of common, client-friendly mediums such as Zoom and FaceTime, indicating these do not meet the requirements without using some unspecified, additional safeguards. The approved communication technology must create an audio-visual recording of the entire interaction between the notary and remotely located individual. Either the notary or an individual acting on the notary’s behalf must retain this recording for at least 10 years.
According to the official announcement, this technology must also “enable the identification of a record before in the presence of the notary as the same record being signed by or containing a statement made by the remotely located individual.” A notary can accomplish this with electronic records or signatures using “tamper evident technology,” the “presence of the same tangible record before the notary and remotely located individual” or by exchanging tangible records. Pennsylvania law prohibits the electronic signature of estate planning documents. However, the explanation in the official announcement suggests exchanging the documents to be signed and verifying that the document notarized is the same as the document signed will constitute a valid execution without the use of electronic signatures. Additional legislation or regulations are likely necessary to clarify this point in the near future.
Additional Points From the Department of State’s Official Announcement
In addition to the above clarifications, the Department of State’s official announcement adds several significant points not included in either the prior order or the new law. First, the notary must be located in Pennsylvania, but the remotely located individual whose signature is being notarized may be located anywhere in the U.S., or any U.S. territory, without triggering any additional requirements. Contrast this with New York’s temporary remote notarization laws, which require the signatory and the notary to be located in New York state. Second, the notarial certificate must reflect the Pennsylvania county in which the notary is physically located at the time of the notarial act — meaning not necessarily where the signatory is signing.
While Act 15 makes the task of notarizing estate planning documents possible during the pandemic, other unchanged signing formalities still pose significant obstacles to both clients and practitioners. For example, Pennsylvania has not extended the same suspension of in-person presence to individuals witnessing someone’s signature. Many estate planning documents are witnessed in Pennsylvania as a best practice, but some, including the durable general power of attorney, must be both notarized and witnessed by two individuals who are not named as agents in the document to be a valid, enforceable document. This means clients hoping to name trusted agents to pay their bills, run their business or make any number of other important decisions on their behalf (including in the event they are incapacitated) must find two adults who are not named in the document to witness their signature in person while the notary remotely notarizes and records the signing. This significantly impedes people confined to their homes, who are often those most at risk, from executing all their documents in a time when planning for incapacity is highly necessary. However, the Legislature could alleviate this problem by temporarily dropping these in-person restrictions as they have now done for notaries.
Fox Rothschild’s Taxation and Wealth Planning practice group is actively monitoring all developments in Pennsylvania’s Legislature that impact the ability of our clients to safely and effectively create and maintain their estate plans. For more information about this alert, establishing an estate plan during COVID-19, or any other estate planning matters, please contact Catherine Appel or any other member of the firm’s Taxation & Wealth Planning Department.