Aside

Keeping up to date with Estate Planning laws

This week in Canada, the Province of British Columbia enacted new laws for the preparation of Wills. The changes were described by some as “sweeping” and the “most significant update in the law for decades”. In reality though, there were only two meaningful changes for service providers like us. Firstly, it lowered the eligible age for preparing a Will from 19 to 16, and secondly it changed the law that automatically revoked a Will on marriage. I’m not quite sure why there was pressure to lower the eligible age; I know that the number of teenagers preparing a Will using our service is very, very low (we’ve had one this year according to our statistics). But the revoking on marriage certainly makes sense. Tragic as it may be, newlyweds can be involved in fatal accidents, and it doesn’t seem right that their Will would be voided because there hadn’t been an opportunity to make the update.Changes Coming

Many lawyers will cite changes in the law as a reason to avoid preparing your own Will, but of course, our services are always kept up-to-date. It does however make for an interesting challenge. Our service covers every State in the US (except Louisiana), every Province in Canada (except Quebec) and the UK (England and Wales only). This gives us over 60 different jurisdictions that have to be monitored. Most of the changes to estate planning law impact people who have not made a Will, and also the Execution of that Will. For example, the new BC law encourages the courts to try and figure out what the testator really meant in their Will, rather than have the estate tripped up on a technicality. The distribution of the estate for somebody who doesn’t have a Will was also changed in the new law, but we would hope that nobody would leave their estate distribution to the vagaries of intestate law and take the decisions into their own hands.

But it means that if you pick up a blank form kit in BC, there is a chance that it may now be invalidated because of the new law. Certainly, any help text associated with that kit would most likely be wrong. You also have to be very careful when using an online service and maybe even request information from the service provider on when they most recently had an update to the service. At LegalWills.ca, USLegalWills.com and LegalWills.co.uk we are diligent about monitoring estate planning laws across all jurisdictions, but other services may have gone online years ago and never been touched.

However, don’t let law changes scare you away from preparing your own Will, certainly at LegalWills.ca, USLegalWills.com and LegalWills.co.uk you can be assured that any change in the law will be reflected in our services on the day of the change.

 

 

Six ways the law is a hundred years out of date

DPRI-1-1706-M1_fullwilllargeAs the owner of a company that allows people to prepare their own Will – online, at any time, there are many services we would love to add, but are continually stymied by a law that fundamentally hasn’t changed in centuries. We live in a smartphone, biometric, social World which is entirely ignored by our legal system. Which would be fine if our current system worked, but it is horribly inefficient and open to fraud and exploitation. Given the gaping holes in the way our Wills law works today you would think that lawmakers would be jumping all over new technology to make the system work. Here are just a few ways that the head-in-the-sand approach comes up short;

1. A Will must be printed on a piece of paper;
Today we have video, digital assets, countless online social activity and the only way a Will can be valid is if it’s printed on a piece of paper. an “innovation” that’s been around for a couple of thousand years. The most obvious shortcomings of paper are that it burns easily, doesn’t stand up to flooding very well, is very difficult to find, not secure, easy to forge, and is not easy to update. The single most common question we receive at LegalWills is “my Dad has just passed away, and I know he had a Will, how can we find it?”. It would be relatively easy for us to have an online repository of Wills encrypted with digital signatures and made available to Executors exactly when they are required. Unfortunately the law doesn’t allow for this and currently the only legal document is on a piece of paper – lost, burned, or blown away in a hurricane.

2. A Will must be signed by a handwritten signature
This is perhaps the most ridiculous shortcoming of our existing laws. A scrawled signature is currently the only way of proving that a Will belongs to the person making the Will. Which leads to cases like this , where somebody has to call in a “handwriting expert” to validate the Will because “There are four signatures on it and none of them actually look like any of his signatures.” We sign into our phones with fingerprints, and biometric data. My smartphone uses face recognition to log me in. I can buy a door handle on Amazon that uses “subdermal fingerprint scan technology”, yet according to the law, my entire estate is protected by a chicken scratch signature. You then end up with multi-million dollar properties being contested because claimants “maintain that it is fake and <the testator> never made one”. Or people like this former police officer who “has admitted fraud over a will said to belong to his dead father.” His Dad didn’t have a Will, his son typed one up and passed it off as his Dad’s. Granted, he was caught, but for every one of these there are thousands of fraudulent Wills being presented as originals.

3. The inclusion of digital assets
Lawyers are starting to acknowledge the importance of digital assets, but have yet to come up with a secure, convenient way to tie these together with a printed Will. Generally speaking it’s a really bad idea to include your Facebook account information in your Will (Wills are public record once you pass away), but online accounts can have significant value. Domain names are still sold for tens of thousands of dollars. PaddyPower, PayPal, Bitcoin, WordPress accounts can be worth a lot of money. And of course, families may end up fighting over Flickr, Picassa, Facebook and iTunes accounts, so they should really have a named beneficiary.

4. Global assets
We live in a very mobile World and people hold assets in multiple jurisdictions, and indeed in some cases may not even know which jurisdiction the assets are held in. If I own $500k in Bitcoin currency, is this subject to inheritance taxes of any country? what if I live part of the year in the UK, part of the year in Dubai, and have a house in Florida and have a PartyPoker account? I recently read this article about differences between English and Scottish law which explains “The EU has very recently introduced new rules to help clarify the position in complicated situations, where the law of two or more EU countries could apply. From August 2015, most EU citizens will be able to choose whether the law applicable …should be under the rules determined by the country of their residence or the country of their nationality. However, the United Kingdom has chosen to opt out of these regulations.” In other words the UK has opted out of a law that will come into effect in two years time that will solve a 50 year old problem. Good luck finding resolution to the issues of today’s digital assets.

5. The cost of a lawyer
Lawyers continue to overcharge for their services. In most cases a lawyer will have a client complete a blank form, put the information into some software and generate a standard boilerplate Will. And then charge $600 or £400. Not in every case of course, but a lawyer should be able to say to a client “you know, that was a really simple Will, let’s call it $25” but it won’t happen. We’ve had people come to us having been quoted $1,200 for a Will. It’s just out of touch with reality, especially as Wills should be reviewed at least annually and updated regularly.

6. Using the services of a lawyer
We can automate and “app-ify” many things today. Online and smartphone applications are breaking new ground daily and it not difficult to conclude that if Intuit can build TurboTax for business, it is not much of a stretch to address everybody’s estate planning needs with self service tools. At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we provide a service that works for about eighty percent of people, and we direct people to legal professionals for anything complicated. But it is well within our technical capabilities to provide an online tool that works for 99.9% of the population, probably more effectively that the legal profession. A Will is something that everybody should have, access to a lawyer should not be a roadblock to preparing a Will.

The broken system of the Last Will and Testament

morse

Samuel Morse invents the telegraph and the UK Wills Act was written

We live in a wonderful age of smartphones, social media, biometrics, geolocation and even “smart clothing”. There is however one industry that seems to have dodged the world of technology – the system of writing a Last Will and Testament hasn’t changed much in centuries. In fact, the law pertaining to Wills in the UK was written in 1837, the year that Samuel Morse invented the telegraph, and aside from a few minor updates, the law has not really changed very much. Today, there are at least three major issues with our system of writing a Will;

1. Most people don’t have one

Everybody should have a Will, but most people don’t have one, and for those that do, most are not kept up-to-date. This is a serious issue as people end up dying intestate and their estate is not distributed according to their wishes, or worse, their wealth goes to the government. There are a number of reasons for this;  general procrastination and cost are most frequently cited. In most cases though, it comes down to the misconception that the only people who can write Wills are legal professionals. This is of course not true, anybody can write their own Will, but the legal profession continually scaremongers the general public by making weak analogies (“you wouldn’t perform your own brain surgery, so why would you write your own Will?”) or making it sound more difficult than it actually is “use a lawyer because you have to sign it correctly or it is invalid” (you have to sign the document in the presence of two witnesses….most people can understand this instruction). But the best method for making the process seemingly beyond the understanding of the general public is persisting in using the language of Chaucer and Shakespeare. Wills are still filled with terms like “hereinafter”, “thereof”, “hereunder” and 250 word sentences (I counted an actual sentence in my Will). There is absolutely no justifiable reason for forcing a document written in 2013 to be totally unreadable. There is also no legal requirement to use impenetrable prose to write a Will.

2. Finding the Will

The most frequent call we receive at LegalWills is from a loved one who thinks their family member had a Will, but they can’t find it. There is no registry of Wills, and if there were, most people wouldn’t use them. There is also no way of knowing whether a Will that has been found is the latest version. It is a system that should not exist in the advanced technology age that we are living. The only legal Will is a printed piece of paper with a scrawled signature. Electronic Wills are not legal, nor video Wills, nor digital signatures on Wills. If a person dies in a house fire, chances are their Will went with them. Everybody who dies from a natural disaster will probably be deemed to have died intestate as their Will went with the tornado…flood…tsunami. And don’t assume that writing a Will with a lawyer is any help, we often hear “my father died in Vancouver, he wrote a Will with a lawyer, but we don’t know which one, but I think he wrote it about 25 years ago”. It is a hopeless situation.

3. Collecting the Assets

Assuming that a Will has been written (point 1) and the Will has been found (point 2), the Will probably says something like “I leave my entire estate to …” . The Executor then has to start gathering up these assets; the life insurance policies, bank accounts, government bonds, share certificates, cash, online accounts. The problem is, the Executor has absolutely no way of knowing when they are done. We wrote about this in a previous article when Citibank put out a 16 page supplement to the New York Times with a list of thousands of old accounts asking for people to claim them. There are some tools available to help, like www.mylifelocker.com. But again, it’s a problem that shouldn’t exist in 2013.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we are trying to help with each of these issues, and I will describe in more detail in future blog posts. But it is infuriating at a time when I can buy a pair of socks with smart sensors and an accompanying iPhone app that the Wills business seems to have been frozen for 200 years.

Same-sex marriage and the Last Will and Testament

Last week, the State of New York passed same-sex marriage legislation; from July 24th 2011, same-sex couples will enjoy the same rights as those in Connecticut, Iowa, Massachusetts, New Hampshire and Vermont. In Canada, all Provinces and Territories recognize same-sex marriage under the 2005 Civil Marriage Act which defines marriage as “”the lawful union of two persons to the exclusion of all others”. In the UK same-sex couples can be joined in a “Civil union” or “registered partnership”.

Why is this of interest to the legalwills blog? well, the most significant implication is for those who choose not to write a Will. There were many cases in the past of a person dying intestate (without a Will) having lived for decades with a life partner. The law used to say that only married partners could have a claim on the estate, and until recently, same-sex couples had no claim (common-law partners still have no claim in most jurisdictions). The “civil union” in the UK and other same-sex marriage legislation gives rights to survivors when no Will has been written. Of course, at LegalWills we would have just advised everybody to write a Will in 30 minutes and save their surviving partner the anguish, but sadly, in many cases people procrastinate when it comes to putting their estate planning affairs in order.

But same-sex marriage legislation also provides some rights for partners who have been left out of a Will. In most jurisdictions it is not possible to completely disinherit one’s spouse, and this now extends to same-sex relationships where applicable.

There are also clear implications for same-sex couples with children. In a Last Will and Testament a guardian for the care of minor children is named, but this only comes into effect when both parents are unable to provide care. With same-sex marriage the parental rights can now extend to both parents.

The recognition of civil unions also has implications for Powers of Attorney and Living Will forms – if you are ever unable to speak for yourself, for example, if you were in a coma. One’s married partner is usually the first point of contact for physicians who need to consult with a family member on important healthcare decisions.

The law is still quite varied across different jurisdictions and the discussion is probably worthy of a Masters thesis rather than a blog post. However, many basic rules still apply for same-sex couples;

  1. Make sure that you have a Will, Power of Attorney and Living Will in place.
  2. If you planning to disinherit your married partner; seek legal advice as the wishes that you have outlined in your Will may not be enforceable.
  3. If you do get married or divorced, make sure that you update all of your estate planning documents. Marriage typically revokes (cancels) any existing Will.

This is a very rapidly changing legal landscape, and so if you read this in a few months, it may be out of date. If you have any comments to add, please feel free. I am happy to provide any clarifications or corrections.

The challenge of keeping your Last Will and Testament safe

We seem to have touched on this topic a few times in this blog; how do you keep your Last Will and Testament safe and private, but accessible to your Executor at the appropriate time? It is a real balancing act that weighs up security, with the convenience of access for the Executor as well as the ease of updating and maintaining the document.

a lost Will in Tuscaloosa

In the last few days and weeks the issue has become more prominent after the tsunami in Japan, the tornadoes in the US and the series of earthquakes in Asia. I read today of a Facebook group dedicated to “Pictures and Documents found after the April 27, 2011 Tornadoes” with the hope of reuniting important documents with their owners, and these documents include property deeds and a number of Last Will and Testaments.

We actually received calls from relatives of people impacted by Hurricane Katrina in 2005 asking how they would attempt to locate a person’s Will after this type of disaster. And really there is no good answer that can be given.

Your options currently are to store your Will at home, maybe in a fireproof safe, or to store the document at a lawyer’s office or with a bank. Each option has its advantages and disadvantages, but in a catastrophic situation, none of these options is likely to help. We wrote previously about the proliferation of Will registries and how ineffective these services are, as they most often allow you to store a note with a description of where the document is stored, not the document itself (we actually feel that many of these services are close to being scams).

Storing your document at home is the best way to ensure that your Executor can access the document at the appropriate time; however, there doesn’t necessarily have to be a natural disaster for you to lose your document; a flood or house fire may put your Last Will and Testament at risk. Storing your document in a lawyer’s office probably makes the Will more secure and often documents are stored offsite; however, a lawyer’s office is as likely to fall victim to a tornado as much as a home, so it is worth asking the lawyer’s office exactly where the documents will be held. One cautionary note though is that your Executor needs to know where the document is stored, and it is not uncommon for law offices to merge and be acquired by other offices and so your Will could potentially outlive your law firm (it actually happened with my family).

Tuscaloosa, Alabama

Minamisanriku, Japan

The bank is the most secure, but your Executor faces a conundrum; how can they gain access to the deposit box, when the document that can provide them with the authorization sits in the deposit box. It is actually the least convenient of all options, and again, your Executor would have to know how to gain access at the appropriate time.

A quick word on copies. One seemingly obvious way of protecting your documents is to make a number of copies and store them in all kinds of different places. This unfortunately doesn’t work – there should only ever be one original document; copies should be clearly marked as copies. Every time a Will is updated, previous versions including all copies, should ideally be destroyed, but even if this isn’t done, a newly signed and dated Will effectively cancels (revokes) any previous Wills.

Unfortunately until the law manages to catch up with digital signatures, cloud computing, data encryption and all of the other technologies available to us today, a signed piece of paper is the only legal form of a Last Will and Testament, and as we know, pieces of paper don’t do very well in floods, winds, fires and exposure to countless other natural elements …. !

Keeping up with the law when writing your Last Will and Testament

One of the common arguments made by lawyers against preparing your own Will is that “the law changes all the time and so your Will may no longer be valid”. I think it’s worth exploring this statement a little bit to see if there is any substance to the claim.

Let us start by discussing what makes a document a legal Will. If you type on a piece of paper “this is my last Will and Testament”, name an Executor, describe how you wish your possessions to be distributed, and then sign and date the document in the presence of two witnesses who also sign, you have a basic, but perfectly legal, Last Will and Testament. This is of course not recommended, because there are other matters to include; for example, alternate plans, plans for minor beneficiaries, guardians for minors, and then of course there are your legal obligations within the Will, for example, providing for a spouse or dependents. Very quickly, you can see why the law has an impact on the creation of a Will, and this is why we provide three very different services; www.legalwills.ca, www.uslegalwills.com and www.legalwills.co.uk for our Canadian, US and UK customers respectively. Each service is shaped by the law for that jurisdiction and within the US and Canada there are variations for each Province and State.

The legal variations from one jurisdiction to another include things like the age at which you can make a Will, the number of witnesses required to sign, and what you can legally do within the Will, for example, disinherit a spouse. In fact, most of the variations in the law affect the help text, rather than the final document itself. So how likely is it for a law to change that would make a Will kit invalid?

Laws do change. One of the most high-profile estate planning changes has been with same-sex marriage; a few years ago in most jurisdictions if a person died without a Will, and they left a same-sex partner, the surviving partner would have no claims on the estate, even if they had co-habited for decades. This is changing and the law is recognising the rights of surviving same-sex partners. However, this change in the law does not actually affect Wills, it has a major impact on people dying without a Will.

The other laws that change are inheritance laws, particularly as it relates to taxation. The US has seen almost annual changes in estate tax law from the 2010 repeal to the 2011 $5 million threshold. But again, these changes do not affect the creation of a Will (although it may cause people to look at different estate planning strategies).

Is it therefore possible, as some estate planning lawyers claim, that you could pick up a do-it-yourself Will kit that would be invalidated because of a change in the law? For the most part, “fill in the blanks” kits are so vague that it would be difficult for them to be invalidated. They are often not much more than a blank sheet of paper, and so it would take a radical law change to make the kit out of date. Of course, any accompanying guide could be outdated, and also, the testator’s plan could be illegal, but the kit itself would probably not have to be pulled from the shelves.

However, once in a while a law is changed that could make kits no longer legal, and this type of law is coming into effect this year in British Columbia. Before this law change, estate planning in the Province was for the most part based on the Wills Act of 1837, and the last major review was in 1920. The change of the law is significant and includes things as simple as changing the term “testator” to “will-maker”, but the more significant change is the philosophy to ensure that a deceased person’s last wishes are to be respected, even if the document containing those wishes does not strictly meet the requirements of a will. This allows the court to correct errors in the formal execution of a will. Furthermore the law is changed to no longer automatically revoke (cancel) a Will when a person gets married. It also allows a person to write a Will at 16 (rather than the current 19). The list goes on, and there are many other interesting changes to the law that need to be considered by will-makers.

Of course, it’s important to note that no law would invalidate all Wills made before the Will came into effect.

We are conducting a through review of our services to ensure that any changes required by this new law are updated for our BC customers. There is a good chance that a kit purchased in a stationery store would not undergo this type of review, but of course, legal professionals working in BC certainly know about the law changes.

In summary to answer the initial question; is it possible for a do-it-yourself kit to be invalidated by a change in the law? possibly. And this is just one more reason why we steer people away from kits like this. Either using the services of a legal professional, or using an interactive service like the one at LegalWills is probably the best way to guard against this.

The Last Will and Testament of our children

Today’s post is nothing more than an opinion, but speculation about the future of the Last Will and Testament. For the most part, the field of law is very traditional. Lawyers are generally speaking slow adopters of technology, and the law itself is painfully slow to adapt to change. But the World we live in is changing dramatically quickly and technology is becoming a core part of most people’s lives. Especially the lives of our children growing up who are always connected, always trying new things, and quick to understand and use new services and technologies. You only have to look at the legal issues surrounding things like intellectual property, content streaming, Wikileaks or even something as simple as taxation to see how difficult it is for the law to tackle the new hyper-connected World. At LegalWills we witnessed an attempt at intellectual property theft with developers on the other side of the World trying to reverse engineer our services and found that legally there was very little we could do about it. The US patent office is coming under increasing criticism for granting patents for technologies that they clearly barely understand and almost every day we see frivolous claims for things like social networking. In fact Twitter has been sued for patent infringement countless times in the last year including this one for mass notifications, Facebook have also had their share. including infringing on “System for creating a community for users with common interests to interact in”. One of the more famous claims was BT’s claim on links on a website !!

But this is all a prelude to the Wills discussion. Today a Will must be written (usually on paper, but in theory written on something is fine like a handwritten Will on a piece of wood) and then signed in the presence of witnesses to become a legal document. So what is the long-term viability of this law? It seems that our children will find writing on a piece of paper a little anachronistic in 20 years time, especially when it’s such an ineffective tool; somebody has to find it, hope that it hasn’t been burned or destroyed, hope that nobody has meddled with it, inserted pages, removed pages, it hasn’t been lost, the version that they have is indeed the Last Will and Testament and not an old version. Writing on a piece of paper is a horribly inefficient way of preparing a Last Will and Testament especially with the tools available to us today. Surely in 20 years time the law will allow for video Wills, Wills that have been stored online in an encrypted format, barcoded Wills, even hologram Wills (rather than holographic Wills). What about a Will written on Facebook or whatever Facebook happens to be in 20 years time?

And how about possessions? a Will today allows you to distribute your physical assets and wealth; but won’t a Will of the future need a beneficiary of your blog, your domain names, your Paypal account, and other online assets. Many services are starting to provide for this, and the term “digital Will” is starting to appear, but this is currently separated from your legal Last Will and Testament. There is clearly a gap in today’s understanding of estate planning that glosses over digital assets. By way of an example; if I hold the usage rights to a domain name like sales.com, I never own the domain and I have to renew it every year or so, but I have usage rights all the time I pay my annual fee. As soon as that payment lapses it becomes available to somebody else even though as an asset it could be worth a million dollars. How do I pass this on to a beneficiary?

We’ve spoken in the past about signatures. It is a ridiculously antiquated way of proving that you are who you are. But today, in 2011, it is considered to be proof that you signed the piece of paper. There are all kinds of cryptographic advances being made to make a handwritten signature obsolete and I would be surprised if our children still relied on scratching their name on a sheet of paper to be proof of their identity.

I have similar thoughts about the swearing under oath; today having a signature notarized gives it more “weight”. In other words, if I sign a piece of paper, it was probably me, if I sign it in the presence of a Commissioner of Oaths who makes me swear in the presence of God that it really is me signing, then it really must be me. I really cannot imagine that this will be the most secure approach that we will have in 2031.

There’s clearly more to the signing than just adding a signature; you have to prove that there was no undue influence, that you had mental capacity, that the Will reflected your own wishes and so forth. But the mechanics of writing on a piece of paper and signing it will not work for our children. A Will also has more to its clauses than just a distribution of assets; it names an Executor, Guardians for children, potentially sets up trusts, has alternate plans. There’s probably too much in there for a person to record into a webcam.

This is clearly an area for our futurists to think about, will our children’s Wills be recorded, barcoded, encrypted and stored in the cloud with a copy of their DNA?  if they are, our laws need to adapt a little more quickly.