In the United States, electronic signatures have been legally binding at the federal level since the year 2000 under the Electronic Signatures in Global and National Commerce Act (ESIGN). Even in areas where federal laws don’t apply, most states have passed laws to legalize e-signatures.
For the past two decades, people have signed documents electronically because it saves time, money, paper, and a trip to the post office. When you can email a document back and forth, it makes sense to collect a signature online.
Though it used to be hard to do electronic signatures, major tech companies have made this easy. For instance, Adobe has its own e-signature application for Adobe Reader, and Box has an e-signature feature built into its cloud storage platform.
Most electronic signatures are used to sign business contracts and housing documents, but e-signatures can be used for just about any document. Some documents must still be signed in ink, however.
Wills and testamentary trusts
Federally speaking, wills and testamentary trusts cannot be signed electronically. However, states are starting to adopt e-signatures for wills. So far, only Nevada and Indiana have done so. Florida and Arizona are considering following suit.
What are wills and testamentary trusts?
A will is a document that outlines a person’s wishes for the disposal of their possessions and sometimes their body after they die. A testamentary trust is something that is established through a will, but not until the person has passed away.
Investopedia describes a testamentary trust as “a fiduciary relationship that allows a trustee, who is a third party, to manage assets on behalf of the beneficiaries of the trust.” People establish testamentary trusts to distribute their assets according to their wishes, which can include naming minors as beneficiaries.
A testamentary trust can also guide asset management, tax reduction, and more. However, testamentary trusts don’t bypass probate.
Codicils
A codicil is a document that either modifies, revokes, or explains a will in full or in part. At the federal level, codicils may not be signed electronically, but that might not be the case in states that have adopted e-signatures for wills.
Adoption papers
In the U.S., adoption forms can be filled out online and then printed, but they must not be submitted online, saved online, or signed electronically. Adoption papers are specifically excluded from ESIGN.
Divorce and family law papers
Any family law paperwork, including divorce papers, child support, and child custody papers, may not be signed electronically.
Court orders and notices
All court paperwork must be signed on paper with a pen. This includes the paperwork for filing a lawsuit, filing for a protection order, motions, pleadings, and notices being served to other parties.
Notices of eviction, foreclosure, repossession, or default
If a landlord wants to evict a tenant, the landlord must deliver a paper notice with a physical signature. The laws for serving notices vary by state, but usually, landlords are required to tape a notice to the tenant’s door and mail a copy via certified mail.
The alternative is to deliver the notice personally and directly to the tenant. However, eviction notices usually need to be delivered in person and by mail.
Paperwork to terminate health and life insurance benefits
Terminating a health or life insurance policy is a big deal. It makes sense that these actions wouldn’t be allowed by e-signature. Someone might try to cancel someone else’s policy with malicious intent, and an e-signature would make that too easy.
Product recall paperwork
When a company issues a recall for a product, all paperwork must be signed on physical paper with ink.
Paperwork for transporting hazardous materials
Paperwork that accompanies hazardous materials during transport, loading, and unloading must be signed with an ink pen on a physical piece of paper.
Exceptions to these rules
There are some exceptions. ESIGN specifically bans e-signatures for the above documents, but some states have laws that make electronic signatures legal under specific circumstances. For instance, certain states allow court documents to be signed electronically when the situation meets specific requirements.
Electronic signatures will be the future
Although many documents are not allowed to be signed electronically today, that will likely change in the future. The world is quickly moving into primarily digital practices, and it may be only a matter of time before e-signatures become standard.
