By Nancy Burner, Esq.
As of June 13, 2021, New York State has an amended Power of Attorney (“POA”) statute and a new statutory document to go along with it!
On December 15, 2020, Governor Andrew M. Cuomo signed a bill into law that amended the New York State General Obligations Law as it relates to powers of attorney. A POA is a document by which an individual grants authority to another to engage in certain financial and business transactions on their behalf. The one granting authority is termed “Principal” and the person they are authorizing to act is the “Agent.”
While the POA originated as a document to facilitate business transactions, it has been coopted over time by estate planning and elder law attorneys as an important tool for handling the affairs of a Principal with diminishing mental or physical capacity to handle their own affairs. In these situations, the Agent should be given the specific powers to handle banking transactions, retirement account transactions, sign contracts on behalf of an individual, and the list goes on.
The most visible change in the 2021 enactment is the elimination of the Statutory Gifts Rider; an attachment to the POA that allowed for various shifts of assets out of a person’s individual name. While it will still be necessary to list out the specific powers being granted relating to gifting, it will no longer be in a separate document but rather, will be incorporated into the POA document itself.
Another big difference will be the requirement that the Principal’s signature be witnessed by a notary and two witnesses (one of which can be the same individual that is serving as the notary). The witness requirement existed with the 2010 law, but only for Principal’s conferring gifting authority. The second witness was put added to the statute to give extra protection to a Principal that may be the subject of elder abuse or undue influence.
The new statute also incorporates provisions to allow for someone to sign on behalf of a Principal that lacks the physical ability to sign. As an example, I have a client diagnosed with Parkinson’s Disease who has lost the use of her hands. With the new law, she can now direct someone to sign the document for her. She must still be present at the signing and be able to demonstrate her mental capacity to execute the document, but she will not have to worry that she can no longer sign her name.
For anyone that has already seen an attorney and completed their estate planning the question becomes, do I need to sign a new POA? The answer will be different for each person.
Any POA that was valid at the time it was executed will remain in effect but if the document is outdated or does not include all the powers that may be necessary down the road, it may be prudent to sign a new one. However, a change in law such as this is the perfect reminder to make an appointment with an estate planning attorney to have your entire plan reviewed, including your power of attorney.
Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office. Visit www.burnerlaw.com.