Electronic documentation

Trusts

Unlike wills and codicils, which are discussed below and which must be executed in accordance with certain legislated formalities, there are no general formality requirements in law for the creation of a trust, other than in certain limited circumstances. For example, testamentary trusts are generally validly created only if the formal requirements for making a will under applicable provincial law are satisfied. The Ontario Statute of Frauds also requires that the ‘grant’ or ‘assignment’ of an interest in an existing trust be in writing, and that the creation of trusts of land be evidenced in writing.^[1] Otherwise, the basic requirements for the creation of a trust in Ontario are:

• the intention to create a legally binding obligation in the nature of a trust;
• certainty of property subject to the trust; and
• sufficiently ascertainable beneficiaries.

Notwithstanding the foregoing, normally the terms of an express trust are set out in a written document, which is often in the form of a deed. This obviously avoids practical difficulties in establishing the trust and its terms in the absence of any written record.

Traditionally, the formalities of a deed are that it be in writing, sealed and delivered (though in modern times it is now common practice for the seal to appear as a facsimile of a seal printed on the document). Although there is no requirement that the deed be signed, a signature provides evidence that the deed was sealed and delivered. Witnesses, likewise, are common in practice but are not required by law.

As there is no requirement that a trust or a deed be signed, there seems to be no reason why a trust or deed evidencing a trust could not be signed electronically. An electronic signature is defined in the Ontario Electronic Commerce Act, 2000 (the Act) as ‘electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document’.^[2] The Act does not specify any particular test of reliability for such a signature. Rather, the term ‘electronic signature’ is intended to be a technology‑neutral term that refers to the many ways in which a person may indicate an association with an electronic document.

It is worth noting that s.3(1) of the Act provides that no person can be required to accept a document in electronic form without that person’s consent, which can be inferred on an objectively reasonable basis from the conduct of the parties. It is unclear whether this provision has any application in the context of a trust, as there is no requirement of consent generally. However, this provision may be applicable in the context of certain trust‑related documents where consent may be required, such as a change of trustee document. As a matter of best practice, parties should include a provision in any deeds or other trust‑related documents that will be executed electronically specifically authorising the use of electronic signatures, in addition to a counterparts clause, in order to signify each party’s consent to the signatures being made in electronic form.

Wills and powers of attorney

Generally speaking, electronic signatures can be used in most cases where a signature is required or expected as a matter of practice. However, certain types of document are specifically excluded in the Act – including wills and codicils, trusts created by wills and codicils, and powers of attorney (PoAs) to the extent that they are in respect of an individual’s financial affairs or personal care. The exclusion from the Act does not mean that electronic signatures are not acceptable; rather, it indicates that specific legislation or common‑law principles governing the requirements for these types of document would apply. 

At present, original signatures are still required in Ontario for wills and PoAs by all parties, including the testator or grantor and the witnesses, and electronic signatures are not permitted. British Columbia, with the recent enactment of the Wills, Estates and Succession Amendment Act, 2020 (Bill 21), currently allows a will made in electronic form to satisfy the requirement that a will must be in writing.^[3] However, in order to facilitate the continued execution of wills and PoAs in a safe, socially distanced manner during the COVID‑19 outbreak, the Ontario government passed Ontario Regulation 129/20 under the Emergency Management and Civil Protection Act (O. Reg 129/20), which temporarily permitted the virtual witnessing of wills and PoAs. On 19 April 2021, the Accelerating Access to Justice Act, 2021 (Bill 245, the Bill) received Royal Assent, and its amendments to the Succession Law Reform Act (the Reform Act) and the Substitute Decisions Act, 1992 (the Decisions Act) made virtual witnessing a permanent option for estate planners going forward. As a result of the Bill, O. Reg. 129/20 was revoked on 20 May 2021 and is no longer in effect.

Formal requirements

Subsection 4(2) of the Reform Act provides that a will, other than a holograph will, is not valid unless ‘(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction; (b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and (c) two or more of the attesting witnesses subscribe the will in the presence of the testator’.^[4] Section 6 of the Reform Act deals with holograph wills by providing that a testator may make a valid will wholly by their own handwriting and signature, without formality, and without the presence, attestation or signature of a witness. 

The definition of ‘presence’

With respect to the requirement in s.4(2) that the witnesses be in the presence of the testator and in one another’s presence for the making or acknowledgment of a signature on a will and for the subscribing of the will, s.4(3) of the Reform Act now provides that such requirements may be satisfied through the use of ‘audio‑visual communication technology’, provided the following requirements are met:

‘(a) at least one person who acts as a witness is a licensee within the meaning of the Law Society Act at the time; (b) the making or acknowledgment of the signature and the subscribing of the will are contemporaneous; and (c) the requirements specified by the regulations made under subsection (7), if any, are met’.

The term ‘audio‑visual communication technology’ is defined in subsection 4(1) as ‘any electronic method of communication which allows participants to see, hear and communicate with one another in real time’. Sections 4(4) and 4(5) also clarify that counterpart copies of the will must be complete and identical, but minor, non‑substantive differences in format or layout between the copies will be permitted. Accordingly, best practice would be for the testator and witnesses to confirm during the virtual meeting that they are all signing identical documents. This could be done by holding each page up to the camera or positioning the camera so that all parties can see the document being signed.

The Bill’s amendments to the Decisions Act mirror the amendments to the Reform Act. Like the Reform Act, the new subsection 3.1 of the Decisions Act provides that the requirement that a PoA be executed in the presence of witnesses may be satisfied through the use of audio‑visual communication technology. This is provided that at least one of the witnesses is a licensee within the meaning of the Law Society Act at the time, the signatures required are contemporaneously made and any other requirements specified by the regulations are met. The definition of audio‑visual communication technology in the Decisions Act is the same as the definition provided in the Reform Act, and provides that minor, non‑substantive differences in format or layout between the copies is permitted.

Interestingly, the requirements for virtual witnessing set forth in the emergency order O. Reg. 129/20 and those in the Bill are not identical. Most notably, O. Reg. 129/20 seemingly allowed for wills and PoAs to be signed non‑contemporaneously by circulating the same physical document to the witnesses, who would sign it after the date of execution, while the Bill specifically requires that the signings be ‘contemporaneous’. However, because the Reform Act provides that the testator may sign or acknowledge their signature in the presence of the witnesses, it should still be possible for the testator to sign the will and then circulate the same physical document to both witnesses.^[5] At the subsequent subscription meeting (or meetings, if the witnesses are not together), both witnesses would need to be virtually present during the acknowledgement by the testator of their signature on the will, and the subscription by each witness. There is no provision in the Decisions Act allowing a grantor to acknowledge their signature on a PoA, so remote witnessing of PoAs may only occur by use of counterparts.

Notwithstanding that the option of circulating a will seems to remain available in the case of the Reform Act, caution should be taken with using this approach. It seems clear that the contemporaneous requirement was intentional in order to eliminate certain risks that are inherent when a will is executed virtually and then circulated to the witnesses, rather than being signed in counterparts contemporaneously. For example, a contemporaneous requirement eliminates the risk of a testator dying or becoming incapable in the intervening period between the virtual meetings, as well as any potential ambiguities on the date of a will if the virtual meetings do not all occur on the same day. In his 4 May 2021 letter to stakeholders, Attorney General Doug Downey addressed the slight legislative changes to the virtual witnessing process to require that the signatures of witnesses be made when the virtual witnessing occurs.^[6] Downey explained that the amendments are intended to clarify concerns about the validity of wills and PoAs that arose out of non‑contemporaneous signing. Further, guidance issued by LawPRO, an Ontario lawyers’ insurance provider, emphasises that ‘... the practice of circulating the original will or POA and seeing it executed in multiple virtual meetings will not be continued after a date to be proclaimed. All signatures will have to be contemporaneous. It might be a good practice to adopt contemporaneous signing processes now for virtual executions if you have not done so already’.^[7] Likewise, in a report on the estate law reforms of the Bill, the Ontario Bar Association stated that, ‘[w]hile virtual witnessing of wills and powers of attorney will continue to be available, a new requirement that the signatures must be made contemporaneously is added. The new requirement appears to largely prohibit the practice, which developed under the emergency order, of circulating a single document between the testator/grantor and witnesses for signatures over a period of time’.^[8]

Non-compliance

Currently, Ontario is a strict compliance jurisdiction in respect of will formalities, and the recent case Swiddle Estate (Re) is a reminder of why it is important to exercise caution in ensuring that wills are executed and witnessed in accordance with legislative formalities.^[9] In that case, a codicil was not admitted to probate because it failed to comply with the requirements of subsection 4(1) of the Reform Act and O. Reg. 129/20. The witnesses were physically located in Sudbury, Ontario, while the testator was at her daughter’s house in Mississauga, Ontario. The witnesses were on the telephone (without video) with the testator when she reviewed and signed the codicil. It was then sent to the witnesses via courier the next day, and they each signed the same document. The court held that the codicil was not executed in a manner permitted under the Reform Act or O. Reg. 129/20, and because Ontario is a jurisdiction that requires strict adherence to the formalities of execution of a will, it could not be admitted to probate. 

Notably, the Bill has also added a new s.21.1 that gives the Ontario Superior Court of Justice authority to make an order validating a document or writing that was not properly executed or made under the Reform Act, if the court is satisfied that the document or writing sets out the testamentary intentions of a deceased. This provision will enable a judge, on application, to validate a will or codicil that was not properly executed. However, this provision does not come into effect until at least 1 January 2022, and will not have retroactive effect.

Conflict‑of‑laws rules

When relying on virtual witnessing for clients travelling outside Canada, attention should also be given to Ontario’s conflict‑of‑laws rules under s.37 of the Reform Act. Section 37 provides that:

‘[a]s regards the manner and formalities of making a will … a will is valid and admissible to probate if at the time of its making it complied with the internal law of the place where, (a) the will was made; (b) the testator was then domiciled; (c) the testator then had his or her habitual residence; or (d) the testator then was a national if there was in that place one body of law governing the wills of nationals’.

It would not be difficult to imagine a scenario in which a client is habitually resident in one jurisdiction (for example, the UK) but takes the position that they are a domiciliary of a province of Canada, and would like to make changes to their will remotely while in the UK. It seems logical that for the purposes of subsection 37(a) the will would be ‘made’ where the testator is then located, notwithstanding that the witnesses were in Canada. Accordingly, there may be a question as to the applicable internal law for the purposes of the manner and formalities of making the will. If there is any doubt as to the client’s domicile in Canada, it would be risky to rely on Ontario’s virtual witnessing statute in the event that the position taken by the client turned out to be incorrect and the UK does not have an analogous virtual witnessing statute.

Affidavits

On 1 August 2020, the Commissioners for Taking Affidavits Act (the Affidavits Act) was amended to allow for remote administering of an oath or declaration.^[10] Section 9 of the Affidavits Act states that every oath and declaration must be taken in the physical presence of the commissioner, notary public or other person administering the oath or declaration. If the person administering the oath or declaration is not physically present, s.9(2) of the Affidavits Act permits the oath or declaration to be done remotely if conditions identified in s.1 of O. Reg. 431/20, Administering Oath or Declaration Remotely, are met. These include that the person administrating the oath and the declarant be able to see, hear and communicate with each other in real time, that the person administering the oath confirm the identity of the declarant, that a jurat or declaration modified in accordance with O. Reg. 431/20 be used, and that the person administrating the oath keep a record of the transaction. It is also a requirement of O. Reg. 431/20 that the person administering the oath take reasonable precautions in the execution of the person’s duties, including ensuring that the declarant understands what is being signed. The Guide for Newly Appointed Commissioners for Taking Affidavits, developed by the Ministry of the Attorney General, explains that although this requirement does not mean providing legal advice, it could include ensuring that the deponent understands what they are signing. 

Probate of a will is obtained in Ontario by filing an application with the court, and the grant of probate in Ontario is called a Certificate of Appointment of Estate Trustee (the Certificate). This amounts to proof that the persons named in the Certificate (usually the named executors) have legal authority to deal with the estate and that the will is valid. As required by 74.04(1) of the Rules of Civil Procedure, an application for the Certificate for a will that is not in holograph form must be accompanied by an affidavit of execution (or, if neither of the witnesses to the will can be found, such other evidence of due execution as the court may require). An affidavit of execution is a document sworn by one of the witnesses to the will verifying that they were present and saw the will executed by the testator, that the testator executed the will in the presence of the witnesses who were present at the same time, and that the witnesses signed the document in the testator’s presence. The purpose of the affidavit is to provide evidentiary support that the will was executed in compliance with the requirements under the Reform Act, which permits the Certificate to be granted in a routine manner in the absence of any other issues.

The affidavit of execution can be done at any time, including after the testator’s death. However, typically the affidavit is done shortly after the will execution while the witnesses can be easily located. Prior to the enactment of O. Reg. 431/20, for wills that were not witnessed by a lawyer, one of the witnesses would typically need to take the original will with them and make an appointment with a commissioner for taking affidavits in order to complete the affidavit of execution. With the enactment of O. Reg. 431/20, the affidavit of execution may now be done remotely, greatly increasing the likelihood that the affidavit will be completed in a timely manner. 

Conclusion

Notwithstanding some of the open questions raised by how virtual meetings and electronic signatures may be used in the context of estate‑planning documents, it is clear that the legislative changes described above, and the growing use and acceptance of electronic signatures more generally, are beneficial to estate planners and their clients. Virtual witnessing of wills in particular provides an additional option for executing estate‑planning documents in a variety of situations where it otherwise may be difficult to have an in‑person witnessing. More generally, the electronic signing of deeds and other trust‑related documents provides flexibility that will often be convenient.