Statutory Gifts Rider Form in New York

New York Statutory Gifts Rider Form Updates

On December 15th of last year, the State of New York introduced a new law that made significant changes to the New York power of attorney (“POA”). These changes took effect on June 13, 2021.

Note that the new law won’t have any effect on the validity of existing, duly executed POAs, and the Statutory Gifts Riders, as they will all be grandfathered in.

A major change with the POA form is the elimination of the Statutory Gifts Rider. Under the old system superseded by the new law, the Statutory Gifts Rider was a separate optional form used if the principal (the person granting the authority) wanted to grant his or her agent the authority to make unlimited gifts of their assets.

The Old POA Law Was Extremely Restrictive

New York Statutory Gifts Rider Form
The new law in New York eliminates the Statutory Gifts Rider. As a result, now there’s just a single document required to authorize gift-giving in the state.

In the past, the New York statutory short form power of attorney required two separate documents to authorize the agent to have gift-giving authority (the statutory short form POA and the Statutory Gifts Rider). The principal was required to initial a section of the statutory short form POA to grant authority to the agent to make annual gifts over $500. Next, the principal had to sign the separate Statutory Gifts Rider. Further, the principal’s signature had to be notarized and taken before two witnesses and signed on the same day as the statutory short form POA.

The reason for having a POA form execution and the Statutory Gifts Rider form execution under the old system was to prevent fraud and abuse of power by the agent or “attorney-in-fact.”

However, the two forms created a lot of confusion for New Yorkers because of their complex, highly bureaucratic, inconsistent, and cumbersome requirements.

The New Law New York Eliminates the Statutory Gift Rider

The change in the law was intended to make the NY POA process more streamlined, transparent, and easier to understand and implement. The new POA law lets a principal authorize unlimited gifts in the POA form itself, in the “Modifications” section of the Power of Attorney form. A separate Statutory Gifts Rider is now rendered obsolete.

The new law permits a principal to modify the standard power of attorney form to authorize the principal to make gifts up to a limit of $5,000 in a single year. That’s an increase from the prior limit of $500, under the old law. Plus, any gift in excess of the $5,000 limit can be made by stipulating that authority in an optional modifications section in the POA form itself.

Takeaway

The new law in New York eliminates the Statutory Gifts Rider. As a result, now there’s just a single document required to authorize gift-giving in the state. This should dramatically simplify the power of attorney form and help to create smoother coordination with financial and other institutions.

Contact Us

Remember that a power of attorney is a powerful document, and once you name an agent, that person may have the authority to act on your behalf with or without your consent. Draft a legal and proper POA with the help of an experienced estate planning attorney.

Ask an experienced estate planning and elder law attorney at Ely J. Rosenzveig & Associates, PC, to help you draft your  power of attorney, as well as other important estate planning documents, such as a health care proxy, living will, a  last will & testament, and a wide array of customized trust documents tailored to your needs.

Ely Rosenzveig
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Ely J. Rosenzveig practices principally in the fields of elder law, trusts & estates, tax planning, employment law, and mediation. He has extensive experience in federal and New York State tax law, and has successfully represented a wide range of clients on FBAR & FATCA compliance issues. Ely also practices employment law, with a particular emphasis on age and disability discrimination, negotiating compensation agreements, and severance issues.

With his extensive background in the law, his experience as a congregational rabbi, and his specialized training in Mediation at Harvard Law School, Ely is also available as a professional mediator to help facilitate optimal solutions in matters ranging from family and estate disputes to multi-party commercial issues.



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