MAJOR CHANGES TO NEW YORK POWERS OF ATTORNEY

A new law concerning New York powers of attorney becomes effective September 1, 2009. There are several major changes affecting the content and the execution of the power of attorney form:

1. AGENTS’ SIGNATURES: The form must be signed, dated and notarized, not only by the person making the appointment, but also by the agent being appointed.

2. GIFT RIDER:    To authorize the agent to make gifts, gift-giving authority must be initialed by the principal (person who signs a power of attorney) and accompanied by what is called a Statutory Major Gifts Rider (SMGR), which must be acknowledged and witnessed by two witnesses in the same manner as the execution of a will. Only small gifts of not more than $500 each per calendar year to individuals and charities, which continue a custom of the principal, can be made by the agent without a SMGR.

3. MONITOR:  The person making the Power of Attorney has the option of appointing a “monitor”, who may request, and then must be provided with, records of transactions by the agent.

4. FIDUCIARY RESPONSIBILITIES:  The agent has specific fiduciary responsibilities, including a “prudent person standard of care”. This includes record keeping with receipts and imposing on the agent the requirement that records be made available within 15 days of a written request by a monitor, co-agent, certain governmental entities, court evaluator, guardian, or a representative of the principal’s estate. An agent may be liable for conduct or omissions which violate the fiduciary duty. These provisions regarding fiduciary responsibilities and special proceedings apply to all powers of attorney, including those executed before the effective date of the new law.

5. GUARDIAN: If a guardian is later appointed for the person making the Power of Attorney, the agent must account to the guardian, rather than the principal.

6. HIPPA: Provisions regarding health care billing and payment matters allow the agent access to health care records in accordance with HIPPA requirements.

7. THIRD PARTY ACCEPTANCE: Acceptance of the form by third parties (i.e. banks) is required. A third party cannot refuse to honor any power of attorney form properly executed under the laws in effect at the time it was executed, without reasonable cause. It is unreasonable for a third party to require their own form or to object because of the lapse of time since the execution or between acknowledgment by the principal and the agent.

It is important to note that a valid New York power of attorney created prior to September 1, 2009, will remain valid after September 1, 2009. You don’t have to re-appoint an agent using the new statutory short form. The requirements of the new POA statute apply only to powers of attorney created on or after September 1, 2009.

If you have any questions or would like more details regarding the new Power of Attorney in New York, please feel free to call or email me.