Estate planning during a pandemic
Thursday, April 16, 2020 @ 12:19 PM | By Richard Weiland
Demand is overwhelming
No imagination is required to see that the pandemic has caused a surge in client demand for estate planning. The many new inquiries coming in daily reveal common motivations driving the demand.
One group of cases are those involving medical urgency. Someone has come down with COVID-19 symptoms or has tested positive, and their estate planning is not up to date. These are the cases which demand the greatest urgency and also present the greatest challenges for taking instructions and execution.
A second group are those who have suffered a material change in their net worth from the pandemic-related economic fallout. These clients have done their planning, but their decisions were based on financial assumptions which have now materially changed.
The third, and largest, group is all the people who had been procrastinating on making or updating their estate plans. Their routines have been interrupted, they are taking in media coverage of the pandemic and they may know someone who has fallen ill. In short, the mortality reminder has shifted their outstanding estate planning from the “important but not urgent” portion of their to-do list to the “important and urgent” category.
The practice is adapting
With suitable technology and some adaptations, many parts of an estate planning practice can continue uninterrupted despite office shutdowns and social distance protocols. The process of taking instructions typically involved a combination of questionnaires, e-mails, and meetings or phone calls, so the only change required in many cases is to replace in-person meetings with phone or video calls. The next stage, preparing documents, requires precedents and systems which most lawyers and their staff are able to access remotely over a secure connection. After drafts are prepared, sending them for review by e-mail is usually simple.
But this highlights the first challenge sometimes encountered: the client, often elderly, who has difficulties accessing and using technology. This can be addressed by using mail and couriers to deliver questionnaires and drafts. It slows the process but tends to be manageable so long as time is available.
More serious concerns arise where the lawyer suspects the client may have diminished capacity or may be at risk of being unduly influenced by others, or both — risks which also disproportionately affect the elderly. In these cases, video calls are a poor substitute for a face-to-face meeting. Only in person can a lawyer read the subtle body language and intonation cues that give valuable insight into the client’s mental and emotional state. In these situations, the lawyer’s professional obligations to the client and to the administration of justice may require in-person meetings, if possible with appropriate health precautions.
Execution of documents during a pandemic also presents challenges. Wills, financial powers of attorney and representation agreements for health care decision-making all have specific and strict execution requirements. In most provinces, the execution of all of these documents requires either two witnesses or one lawyer or notary as witness, and the individuals named as executors, beneficiaries and attorneys, and their spouses, are generally not eligible to witness. When dealing with clients that are either sick with or at high risk from the coronavirus, arranging for two eligible and available witnesses to meet in person ranges from difficult to impossible.
Challenges are driving legal change
A number of provinces, including B.C. and Alberta, and some U.S. states, have in their succession legislation a dispensing provision which empowers a court to order that a document is valid as a will, despite a lack of compliance with formal validity requirements. The wording and judicial interpretation of this provision varies from one jurisdiction to another, but the common essential requirement is that the court must be satisfied the document sets out the testamentary intent of the deceased. Where such a dispensing provision is available, it provides considerable comfort to the estate solicitor that “best efforts” made toward valid execution in restricted circumstances will be recognized by a court order confirming the will as valid.
Ontario is one of the provinces that does not have a dispensing provision; its succession regime requires strict compliance with formal validity requirements for a will to be legally recognized. To alleviate the situation, Ontario passed an emergency order on April 7, 2020 which temporarily allows for remote witnessing of wills and powers of attorney by live videoconferencing. Similar emergency orders have been made in a number of U.S. states having strict compliance regimes.
One of the limitations this situation has highlighted is that even provinces having a generous dispensing provision for execution of wills, like B.C. and Manitoba, do not have a similar mechanism by which the court can validate a financial power of attorney or a health care representation agreement which was not executed in line with formal requirements. There would seem to be no compelling policy reason to empower courts to validate a noncompliant will based on all available evidence, but not to grant a similar power to cure a noncompliant power of attorney.
The COVID-19 pandemic has also injected fresh interest in the proposition that the law should go beyond a court-held dispensing power to give full and routine recognition to digitally signed wills. This suggestion has been discussed in law reform circles for decades. While legislation allowing recognition of digital wills has been passed in a few U.S. states, the dominant voices in the estate bar in other jurisdictions have resisted full recognition of digital wills, citing concerns over potential for abuse and fraud. It will be interesting to see how this conversation evolves with lessons learned from the COVID-19 crisis.
Richard Weiland, TEP, is a partner with Clark Wilson in Vancouver. His practice is focused on tax, estates and trusts.
Photo credit / OlyaSolodenko ISTOCKPHOTO.COM
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