Major Changes To New York Powers Of Attorney
A new law concerning New York powers of attorney, originally effective March 1, 2009, has been delayed until September 1, 2009. There are ten major changes affecting the content and the execution of the power of attorney form:
- 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 a Statutory Major Gifts Rider (SMGR) acknowledged and witnessed by two witnesses in the same manner as the execution of a will. Specific provisions in the SMGR grant the agent authority to create, revoke, modify and fund living trusts; designate insurance beneficiaries; create joint accounts; and change beneficiaries on retirement benefit plans. 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.
- MONITOR: The principal has the option of appointing a “monitor” to request and receive records of transactions by the agent.
- FIDUCIARY RESPOSIBILITIES: 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. Agents may resign by following certain procedures. A special proceeding can be instituted to compel an agent to produce a record of receipts and disbursements and for various other purposes.. 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.
- DURABLE: The form is “durable” (i.e. not affected by later incapacity); unless it specifically provides that it is terminated by the incapacity of the principal.
- GUARDIAN: If a guardian is later appointed, the agent must account to the guardian, rather than the principal.
- AGENTS’ SIGNATURES: The form must be signed, dated and notarized, not only by the principal, but also by the agent. It takes effect when the principal and all agents have signed before a notary, unless it is a Springing Power of Attorney which takes effect upon a future occurrence.
- HIPPA: Provisions regarding health care billing and payment matters allow the agent access to health care records in accordance with HIPPA requirements.
- MODIFICATIONS: Provisions can be added to the form or SMGR in the section labeled “modifications.” which eliminate or supplement a power, or add a provision not inconsistent with the other provisions of the form.
- THIRD PARTY ACCEPTANCE: Acceptance of the form by third parties, e.g. banks is required. A third party cannot refuse to honor the SMGR or 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 acknowledgement by the principal and the agent.
- REVOCATION: Execution of a power of attorney revokes any prior power of attorney, unless provided otherwise. Forms properly executed in accordance with the law in effect at the time of its execution remain valid and must be honored.