By Linda M. Toga, Esq.
THE FACTS: I signed a power of attorney many years ago in which I named my spouse as my agent and my son as my successor agent. My son passed away recently.
THE QUESTION: Should I have a new power of attorney prepared?
THE ANSWER: If you did not name a successor agent to act in the event your son was unable to do so, you should have a new power of attorney prepared. You should also have a new power of attorney prepared if the document you now have predates 2009. That is because the New York State Legislature created a new power of attorney form that became effective on Sept. 1, 2009. Minor changes were made to that form in 2010.
Based upon my own experience and that of my clients, it appears that the people and entities that your agent may have to deal with will be more comfortable if the power of attorney upon which they are relying was signed relatively recently. They are very reluctant to accept the old form, which often was a single legal-sized piece of paper printed on both sides.
Although the law requires that, absent evidence of fraud or wrongdoing, properly drafted and executed powers of attorney must be honored regardless of the age of the document, I recommend that my clients update their powers of attorney periodically. By doing so they increase the likelihood that their agents will not be faced with situations where the person with whom the agent needs to transact business on the client’s behalf improperly refuses to honor the power of attorney based upon its age.
If the power of attorney in which you named your son as a successor agent was signed before September 2009, you will be surprised to see that the current power of attorney form is much longer and more complex than what you signed. While the goal of the current power of attorney is still to allow the principal to grant an agent or agents authority to carry out certain types of transactions on the principal’s behalf, post-2009 powers of attorney include a number of safeguards to protect the principal.
For example, the current power of attorney warns the principal about abuse by agents. In the current form, the principal is not only given the option to name an individual to monitor the activity of his/her agent, but the principal is also required to sign a power of attorney rider in the presence of two witnesses and a notary public if he/she wants to give his/her agent the authority to make gifts in excess of $500.
In an effort to educate the public, the current power of attorney provides agents with information about the duty of care they owe the principal and requires that the agent sign the power of attorney before acting on the principal’s behalf. By signing the power of attorney, the agent acknowledges that he/she must act in the best interest of the principal.
Although it addresses some of the concerns that attorneys and the public had with the pre-2009 power of attorney, in its basic form the current power of attorney does not give the principal the ability to delegate authority to perform many types of transactions that agents are likely to be called upon to perform. This is especially true when the agent is acting on behalf of an elderly principal.
Experienced attorneys routinely modify the current form by adding an exhaustive list of additional transactions and activities that the principal may wish to delegate to his agent. To ensure that the new power of attorney you sign is tailored to your needs, I urge you to retain an attorney who practices in the area of estate planning to explain in detail the current power of attorney and the various types of transaction and activities you may want to delegate, and to prepare for you a new power of attorney that reflects your wishes.
Linda M. Toga, Esq. provides personalized service and peace of mind to her clients in the areas of estate planning, real estate, marital agreements and litigation. Visit her website at www.lmtogalaw.com or call 631-444-5605 to schedule a free consultation.