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A power of attorney is a legal document executed by the principal authorizing the agent to act on behalf of the principal. The actions an agent can do on behalf of the principal depend on the acts authorized by the principal in the power of attorney document. It can be limited to only one type of transaction (i.e., real estate transactions) or it can range to two or more or all types of transactions (i.e., chattel and goods transactions, bond, share, and commodity transactions, banking transactions).
The New York statutory form of the power of attorney is generally a durable power of attorney, unless it is modified under the modifications portion. As such, if there are no modifications, a New York power of attorney is a durable power of attorney that endures even after the principal loses capacity. When the principal loses capacity, the power of attorney continues and the principal cannot revoke the power of attorney. Only a court can revoke a durable power of attorney of a principal that has lost capacity.
The statute was amended by Governor Cuomo on December 15, 2020, effective 180 days after signing. Sometime in June 2021, the following changes were made effective:
Elimination of Separate Gifts Rider for Some Types of Gifts
With the new amendments, agents are already authorized to give up to $5000 without any modifications. There is no need anymore to execute a separate statutory gifts rider. If you want to increase the authority to give gifts, you can simply increase this authority under the modifications portion of the power of attorney.
Substantial Compliance with Statutory Form
Previously, institutions would decline a power of attorney if there were deviations from the exact wording of the statutory form. Even a misplaced comma or period could lead to a rejection of a power of attorney. For this reason, the new amendments allowed the acceptance of a power of attorney that had substantial deviations from the statutory form, for as long as there was substantial compliance.
Requires Two Witnesses and a Notary
The old law required a power of attorney to be executed in the same form as a deed. This only required a notary. However, the new amendments required a power of attorney to be executed before two witnesses and a notary. A notary can act as a witness.
Damages for Unreasonable Refusal to Recognize a Validly Executed POA
The new law grants the court authority to award damages, including reasonable attorneys’ fees and costs, if such institution unreasonably refuses to accept a properly executed POA.
Safe Harbor for Third Parties Acting in Good Faith
Lastly, the amendments allow third parties who rely on the POA in good faith to be held harmless and free from liability.
Although there is a statutory form for the power of attorney, the assistance of counsel is drafting one is necessary, especially when you would like to have modifications, ensure that your agent will be faithful to his fiduciary duties, and you want to be aware of the consequences of your actions. Should you need assistance in POA drafting, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].
About the Author
Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
