NEW FORM  WILL BE EFFECTIVE JUNE 14, 2021

On December 15, 2020, Governor Cuomo signed into law A.5630A /S.3923A, which reforms the NYS Power of Attorney process in New York.
General Obligations Law §5-1501, et. seq. has undergone significant changes. These changes shall be effective for any power of attorney executed on or after June 14, 2021. (Note that the amended statute does not invalidate or render any existing powers of attorney ineffective).
The most significant change occurred in §5-1504. This section is titled "Acceptance of Statutory Short Form Power of Attorney" and has been amended to provide third parties accepting a power of attorney in good faith security from liability in the event the power of attorney is not genuine or is invalid. In addition, the statute provides a process by which a third party may reject a power of attorney for "reasonable cause". The statute provides a list of what is considered "reasonable cause" and it remains virtually unchanged except for deletions of references to the statutory gift rider. The process for rejecting a power of attorney is time sensitive so please review the process carefully.
Another area that experienced significant change is GOL §5-1501 titled "Application & Definitions". Section (n) of the Power of Attorney has been modified. The Statutory Gift Rider has been eliminated. This rider allowed the principal to expand or contract the powers given to the agent especially in the area of gifting real or personal property of the principal. Instead of the rider, any modifications to the powers of the agent must be provided in the "Modifications" section of the power of attorney. By way of example, if in a real estate transfer the agent is signing a no consideration deed to transfer the real property to the principal's son who is obtaining a mortgage, the modification section of the power of attorney presented to the title company must allow for this transfer. It is "reasonable cause" to reject the power of attorney presented if this power is not provided.
Another change in the statute concerns the principal's signature in creating the power of attorney. The principal (with capacity) may now allow "a person other than the person designated as agent" to sign the appointed person's signature on behalf of the principal at the direction and presence of the principal. The signature shall read: principal (printed or signed) by appointed person (printed or signed). Additionally, pursuant to a chapter amendment made to the bill, the new power of attorney will require two witnesses.
Finally, the definition of "Statutory short form power of attorney" has been amended so that it is acceptable to present a power of attorney that "substantially conforms" to the form required pursuant to section 5-1513 notwithstanding, that the form contains (i) an insignificant mistake in wording, spelling, punctuation or formatting, or the use of bold or italic type; or (ii) uses language that is essentially the same as but not identical to the statutory form including utilizing language from a previous statute." Substantial conformity does not depend on whether the power of attorney fails to contain insignificant language or clauses.

If you have any questions on this, please contact underwriting counsel for more info.