I’ve often mused about the contrast between the formalities necessary to execute a will, requiring two witnesses and a notary, and the lack of formality to name a beneficiary of an investment or retirement account or a life insurance policy. Often the investment and retirement accounts contain substantially more money than the rest of an individual’s estate. And often the beneficiaries can be changed online without any of the protections required for a will.
Formalities vs. Ease of Execution
While you execute your will after consultation with your attorney with time to consider and reconsider choices, you often name beneficiaries to accounts and insurance policies on the spur of the moment when you set them up. To the extent these involve employment benefits, you may be filling these out at the same time you’re signing scores of other employment-related documents and dealing with all the distractions of starting a new job.
Even trusts can be executed without the two witnesses required by a will and they are often used as a way to avoid probate, which is the legal process through which the instructions in wills are put into effect.
So, which approach is wrong? Are the formalities around will execution archaic and out-of-date? Or should more formalities and protections be required on beneficiary designations?
The Florida Electronic Will Act
The Florida legislature decided to modernize its will execution process by permitting electronic wills. It’s Electronic Will Act still required two witnesses and a notary to be present when the will was executed, but everyone’s signature could be recorded electronically. It required that the will execution itself be videotaped and that the recording be saved along with the provisions of the will.
This seems a little daunting, but no doubt online document companies such as LegalZoom and Willing could simplify the process, mobilizing the camera on your laptop at the right time. Of course, you would be dependent on those companies staying in business and being able to supply the recording upon your death, which hopefully will be many decades in the future.
Gov. Rick Scott Vetoes the Bill
Electronic wills will be sometime in the future as well. Florida Governor Rick Scott vetoed the Electronic Wills Act on June 26, 2017, expressing two concerns. First, he felt that the law made coercion, undue influence and fraud more possible. Second, the law permitted out-of-state individuals to execute Florida wills and he was concerned that this could unduly burden the Florida probate court system deciding disputes about wills of deceased individuals who had no connection to Florida other than executing a Florida electronic will.
Gov. Scott seemed to suggest that if these concerns were addressed he might accept the bill. So we may see another version in the future.
But the Future of Estate Planning is Still in Our Future
Whether Florida or another state turns out to be the first to act, we’re likely to see the development of electronic wills and other ways to facilitate online estate planning. This will be an interesting transformation. It will make it easier and probably cheaper for the majority of adults who do not have up-to-date estate plans to get them. It’s one more step towards bypassing a somewhat old-fashioned, cumbersome and expensive probate court system. This will also put more pressure on attorneys and law firms to lower their fees and find ways to streamline their services.
That’s the good side of these trends (except for lawyers who don’t adapt). The bad, as Gov. Scott suggests, is that they probably make it easier for bad actors to commit fraud or apply undue influence or coercion without the safeguard of an attorney’s involvement. Also, by bypassing attorneys, individuals lose the benefit of their advice and experience. This becomes more important as your situation becomes more complicated, whether due to the amount and type of assets you own or due to your family situation.
For many people, an online solution will work fine because they want to give everything to their spouse and children and name them as fiduciaries on their documents. But fewer and fewer people live in Ozzie and Harriet families with one marriage, two parents and siblings all with the same two parents. The more complicated the family structure, the more complicated the will or beneficiary designations need to be. In non-Ozzie and Harriet situations, it’s important to consult an estate planning attorney even for beneficiary designations on retirement and investment accounts.