New York’s Power of Attorney Law is Effective September 1, 2009
New York’s new Power of Attorney statute becomes effective on September 1, 2009. The major changes are as follows:
New Statutory Short Form. The statute prescribes a new Statutory Short Form Power of Attorney. A major change is that the agent must now sign the form (before a notary) in addition to the principal.
Statutory Major Gifts Rider. The gifting provision in the Statutory Short Form only permits gifts up to $500. If a principal wants to authorize the agent to make larger gifts – i.e., virtually every case – the principal must execute a “Statutory Major Gifts Rider” or a non-statutory form POA.
The Statutory Major Gifts Rider (“SMGR”) has three substantive sections. Section (a) grants the agent limited authority to make annual exclusion gifts to the principal’s spouse, children, descendants and parents. Section (b) allows modifications where broader powers may be inserted. Section (c) allows the agent to make gifts to himself or herself.
The SMGR must be acknowledged and witnessed by two witnesses in the same manner as the execution of a Will. Generally, this requires two witnesses and a notary.
Appointment of a Monitor. In the new form there is an optional provision that the principal can appoint a “monitor” to request and receive records of transactions by the agent. The statute provides for a special proceeding that a monitor can bring to compel an agent to produce a record of receipts and disbursements and for other purposes. This provision should help reduce abuse of the power of attorney by the agent.
Compensation. The new form gives the principal the option to initial a box if he or she wants to provide reasonable compensation to the agent.
Not retroactive. The new law is not retroactive. Powers of Attorney properly executed in accordance with the law in effect at the time of its execution remain valid.
If you have any questions about the new law, please contact us.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.