What you Need to Know about New York’s Updated Power of Attorney Law
Changes have finally arrived for the notoriously cumbersome New York statutory power of attorney, which has been in place in its current form since 2010. The overhaul to the statutory power of attorney in 2010 was an attempt to combat elder abuse while also providing a common document that could be easily recognized by financial institutions in New York, with the goal of streamlining the administration for Agents under a power of attorney. Despite best intentions, completing the 2010 power of attorney form proved to be difficult and an onerous burden, especially for elderly residents who are often those most in need of a power of attorney. After years of activists advocating for reform, the New York legislature passed, and on December 15, 2020 Governor Cuomo signed into law, a bill that will hopefully improve and simplify the statutory power of attorney. For more information on a power of attorney and its use, see our previous article "I GOT THE POWER". Let’s look into the biggest changes to the form power of attorney that went into effect on June 13, 2021.
Elimination of the Statutory Gifts Rider
Principal can Direct Another to Sign
The new law allows a person who is mentally competent, but physically unable to hold a pen and sign their name, to direct another to sign a power of attorney on his, her, or their behalf, provided that the document is executed in front of two disinterested witnesses and a Notary Public. This provision is in line with New York’s law allowing a testator to direct another person to sign his, her, or their Last Will and Testament.
Substantial Conformance
Under the old power of attorney law, rigid adherence to the exact language of the statute was required in order for the document to be acceptable to many institutions. This requirement meant that anyone could, and did, reject the document due to harmless typographical errors. The new law addresses this issue by providing that the power of attorney need only “substantially conform” to the statutory form.
Sanctions for Refusal to Honor Power of Attorney
In order to further address the vast number of power of attorney forms that were rejected for inconsequential mistakes, the new law provides that if an institution is presented with a power of attorney, they must accept or reject it within ten (10) days or receipt. If the institution unreasonably rejects a power of attorney, it can be subject to sanctions including damages, attorney fees and costs incurred by the principal.
Record Requirement
The new law provides that an Agent must maintain records and keep receipts of transactions the Agent makes on behalf of the Principal in an effort to protect the Principal and help guard against abuse of power.
If you created and executed a New York power of attorney prior to June 13, 2021 and it was valid at the time it was created, you do not need to immediately update your document. However, if you are unsure whether your power of attorney meets all of the necessary requirements, or think that you could benefit from the new provisions, contact one of our estate planning attorneys who can review your documents to ensure that you are protected
