No amount of New York estate planning is complete without protecting yourself while you’re still alive. This is why a power of attorney is important. It’s recommended (in conjunction with a health care proxy) for anyone 18 and above. Here’s what you need to know about New York’s recently changed power of attorney (POA).
What is a Power of Attorney?
A power of attorney is a legal document that acts as a planning tool that is used during your lifetime. In a general sense, it allows an individual or multiple other people, the power to manage the financial affairs and make important decisions on another individual’s behalf if they can’t.
The Parties of a POA
The “principal” gives specific authority to others who are the “agent/agents.” The agent is the individual who is authorized to make decisions on your behalf and who agrees to follow the instructions that you have set up. In the absence of specific instructions, the agent is required to act in the best interests of the principal.
You probably want to consider choosing more than one agent in case your agent passes away or somehow becomes unavailable. Otherwise, your family will likely have to endure lengthy and costly court proceedings to handle your personal and financial affairs. They would have to replace the previous agent by having a guardian appointed. You can avoid this by appointing a successor agent or by assigning co-agents.
What Changes were Made to the NY POA?
Because the old format was convoluted and lead to many invalid POAs, the aim of the new law was to simplify the process. Here are important changes:
- You don’t have to use the “exact wording” anymore and instead it’s “substantial conformity” with the wording of the law
- There’s built-in forgiveness for making insignificant spelling or wording errors or for using language/formatting from prior law
- The POA must be signed, initialed, and dated
- The POA form now requires two witnesses, in addition to notarization
- POA can now be signed at the direction of the principal, which had previously been a major issue if the person couldn’t sign independently due to illness or physical disability
Presumption of Validity
If a POA was validly executed before the effective date of June 13, 2021, it is enforceable under the new law. For all the POAs that are executed after the effective date, there’s a presumption of validity. A financial institution (or other third party) may agree to take a witnessed/notarized POA and may rely on the presumption that the signature is valid; this presumption prevents these third parties from rejecting the POA without cause.
Effectiveness
For the POA to be effective, the principal must have capacity at the time of the signing, and the DOA is durable if it remains in effect even after the Principal becomes incapacitated. The POA is effective when the agent has signed the POA in the presence of the notary. If there are two or more agents who are designated to act together, then the POA takes effect when all agents have signed in the presence of the notary.
Get More Information about New York Power of Attorney
If you have an old POA, it should still be enforceable it was in compliance with the law at the time. However, you may still want an experienced attorney to go over it to ensure that it meets the legal requirements. If you don’t have a POA, you can get an attorney’s help with setting it up and taking care of all your estate planning needs. Connect with a MOWK Law estate planning attorney who can help you sort out your specific situation.