May 10, 2021 Power of Attorney New York
A power of attorney (POA) is a legal document that provides a trusted individual (known as the agent or attorney-in-fact) with the authority to act for another person (the principal).
An agent can be given a number of legal and financial decision-making responsibilities for the principal. This authority is specifically stated in the power of attorney document.
POAs are used frequently when the principal is sick or disabled, or when the principal can’t be present to sign documents or engage in financial transactions.
A new law in New York, effective June 13, 2021, amends state law in defining the types of Power of Attorney instruments that will be deemed valid and enforceable as a matter of law. The new law provides that the statutory short form Power of Attorney that has customarily been used to date will continue to be effective. In addition, non-statutory Power of Attorney forms will also be valid, subject to certain requirements.
Specifically, as of June 13, 2021, a Power of Attorney form no longer needs to exactly match the wording of the statutory short form, but now can substantially conform to the statutory short form. This means using language that is essentially or substantively the same as, but not identical to, the statutory form. Also, under the new law, separate statutory gift riders are not required for new POA’s, and the POA is deemed a personal representative for health care-related financial matters as well. Also, the rules for any institution (e.g., banks) failing to honor the POA are tightened considerably.
What are the Different Types of Power of Attorney?
There are a number of types of POAs that can be used for specific situations:
Limited. This document explicitly gives an agent the power to act on your behalf for a very limited purpose, such as the right to sign a deed to property for you on a day when you are unavailable. A limited power of attorney typically ends at a time specified in the document.
General. This is a comprehensive POA that provides your attorney-in-fact with all the powers and rights that you have yourself. A general power of attorney can give an agent the authority to sign documents on your behalf, pay your bills, and conduct financial transactions for you. You may use a general power of attorney if you aren’t incapacitated but require assistance with financial matters. A general power of attorney ends on your death or incapacitation unless you rescind or cancel it before then.
Durable. This POA can be general or limited in scope but stays in effect after you become incapacitated. Without a durable power of attorney, if you become incapacitated, no one can represent you unless a judge names a conservator or guardian. A durable power of attorney will remain in effect until your death unless you rescind or cancel it while you’re not incapacitated.
Springing. A “springing” power of attorney takes effect at a future point in time or upon an event defined by the principal, such as the principal’s incapacity. The “springing” power of attorney may be the right POA where the principal wants to retain complete control over his or her assets until a disability renders him unable to do so.
Where Can I Find NY Power of Attorney Forms?
The New York State Department of Taxation and Finance website has the Form POA-1 on its web application that’s accessible from an Online Services account.
Do Financial Institutions Honor Valid Powers of Attorney?
Yes. In New York, the new law stipulates that a POA is presumptively valid, and that an institution cannot unreasonably refuse to accept a statutory power of attorney or one that essentially conforms thereto. Whereas before, the only relief available when a POA was rejected was an injunction to compel acceptance of the POA, now courts can award damages as well.
Note that under the new law, institutions considering whether or not to accept a POA can require that the POA (agent) swear out an affidavit certifying that he/she believes it to be valid, and not revoked or modified prior to the date of the affidavit. Once the agent’s affidavit is submitted, the institution has 7 days to accept or reject the POA.
Contact an experienced elder law attorney at Ely J. Rosenzveig & Associates, P.C. and discuss how to draft, execute, and use powers of attorneys in your best interest.