Long awaited changes to the New York State Power of Attorney regulations were signed into law by Governor Cuomo on December 15, 2020. The bill, a major overhaul of the existing power of attorney legislation, will substantially change the format and enforceability of the current document in a few key ways. Most significantly, the power of attorney will be condensed from the current two-document format of the Short Form and Statutory Gifts Rider, to a single, more user friendly document format. Witness requirements will be simplified and banks and other financial institutions could face penalties for unreasonable refusal to accept the power. The new law also creates a presumption in favor of the validity of a power of attorney form. The new provisions will also allow the document to be executed on behalf of a client who has a physical inability to sign the paperwork.
Generally, a power of attorney is a legal document giving one person (commonly referred to as the agent or attorney-in-fact) the power to act for another person (commonly referred to as the principal). The agent can be tasked with a wide variety of legal and financial decision making on behalf of the principal, with such authority specifically enumerated in the power of attorney document. The powers are frequently utilized in the event of the principal’s illness or disability, or when the principal cannot be present to sign documents or engage in financial transactions.
Estate Planning and Elder Law Practitioners have long advocated for the changes that are reflected in the new legislation. The complex nature of the current document system makes the forms challenging to execute and creates unnecessary burdens on practitioners and their clients. The new law, which will take effect 180 days, will simplify the document and reduce the likelihood such paperwork will be rejected by a financial institution or bank. We fully expect that documents executed prior to the new legislation will be honored and will remain enforceable under New York State law. This means documents currently in effect will not be invalidated.
The power of attorney is one of the most versatile and important documents in an estate planning package and is a vital tool in assuring you are protected in the event of illness, injury or unexpected unavailability. Together with a health care proxy your advanced directives are an important part of any comprehensive estate plan, and we look forward to meeting with you should you have questions or desire updates to the documents you have previously executed. Power of attorney is still a document that should be discussed with a qualified estate planning or elder law attorney. At Littman Krooks, we are always at the forefront of legislative changes that impact our estate planning and elder law clients. As more information becomes available, we will share updates with you through our website and through our Littman Krooks email newsletter.