Effective September 1, 2009, New York State enacted a new statutory form of Power of Attorney and a Major Gifts Rider.
Powers of Attorney are essential tools in estate planning and elder law planning. If an individual becomes incapacitated and cannot communicate and handle his or her legal and financial affairs, he or she will need someone to act for him or her. As part of the estate and elder law planning process, we reccommend to the client (“Principal”) that he or she execute a Power of Attorney in favor of a family member or trusted individual (“Agent”) so that his or her affairs can be taken care of in the case of incapacity.
The Power of Attorney allows the Agent to take care of banking, investments, insurance needs, real estate transfers and purchases and many other legal and financial matters. Relative to estate planning, the Agent can, if permitted in the document, make gifts or continue a pattern of giving in order to facilitate estate planning goals. Therefore, the attorney must pay close attention to the laws in each state to be sure he or she complies with the statutory and other requirements so that a Power of Attorney is 100% effective.
New York changed the statutory form as follows: 1) both the Principal and the Agent must sign the form and have their signatures acknowledged; 2) the authority to make gifts must be made through a separate Major Gifts Rider executed by the Principal, and not in the Power of Attorney; 3)executing a new Power of Attorney automatically revokes all prior Powers of Attorney, unless otherwise stated in the documents; 4) if multiple agents are named, they must act together unless otherwise stated in the document; 5) a “monitor” or “protector” can be named in the Power of Attorney to oversee the Agent’s actions; 6) the Principal’s rights are clearly stated on the first page and the Agent’s fiduciary obligations, role and legal limitations are explained and the Agent’s signature signifies the acknowledgment of his or her fiduciary responsibility; and 7) 12 point font is required on the form and no deviation from the form is permitted. This is a brief description of some of the changes.
Powers of Attorney created prior to September 1, 2009 will continue to be valid provided they were valid at the time of their creation.
It is important to keep your estate planning updated in accordance with current law. If you have any questions about the new New York Power of Attorney or any other estate planning need, do not hesitate to call.
AnnMarie Palermo-Smits, Esq.