New York State Enacts NEW Power of Attorney Form

New York State Enacts NEW Power of Attorney Form

Effective June 13, 2021, New York State will have a new Power of Attorney form.  This is a significant change to the existing from, which was last revised in 2010.

The goal of the new document is to make the signing process easier by eliminating the numerous – and somewhat confusing – sections that had to be initialed and to allow for an easier experience when attempting to use the document at a financial institution.

What are the major changes?

1. The agent is authorized, by default, to gift up to $5,000 per year per recipient without the need for additional authorization within the Power of Attorney.  The prior maximum amount was $500, unless a Statutory Major Gifts Rider was also executed.
2. And speaking of the Statutory Major Gifts Rider, it has been eliminated.  Any modifications which expand or limit the agent’s default gifting authority is included in the Power of Attorney “Modifications” section, instead of in a separate Rider. 
3. The Principal’s signature must now be witnessed by two disinterested persons, as well as notarized.  Previously, only a notarization was required.
4. The statute includes detailed enforcement provisions which a third party must comply with if it does not honor a validly executed Power of Attorney.  If a third party refuses to honor the document, it must provide written notice to the agent within 10 days of presentation, along with detailed reasons.  An agent may be awarded damages, including attorney’s fees and any costs associated with the third party’s unreasonable refusal to honor the document. 
5. There is clear guidance on how a Principal may direct another person to sign the Power of Attorney on his or her behalf.  This is particularly important for individuals who have physical challenges, such as holding a pen or limited vision.

Do I need to execute a new Power of Attorney?

Not necessarily.  So long as your existing “old” Power of Attorney was validly executed, you do not need to execute a new document. 

Do the Detailed Enforcement Provisions apply to my existing Power of Attorney?

Yes!  An “old” validly executed Power of Attorney is grandfathered into the new rules and third parties must comply with the new enforcement provisions.

What else do I need to know?

Although the new Power of Attorney requires less initialing and no longer includes a Statutory Major Gifts Rider, it will likely include many modifications and may be just as long (or longer) than your prior document.

This might be a good time to review your appointments in existing document and determine if you would like make updates, whether to your Power of Attorney, Will or Health Care Proxy. If you have questions, please do not hesitate to contact me.