On December 15, 2020, Governor Andrew Cuomo signed long-awaited changes to the New York State Power of Attorney law.
The changes are intended to make the power of attorney easier to use, provide a framework for acceptance or rejection of the power and clarify the power and obligations of an agent.
The changes take effect June 13, 2021 and a new form of power of attorney will now be utilized which is simpler than its predecessor and helps to ensure that it will be more widely accepted.
Some of the important changes include the following:
- The total basic statutory gifting amount is increased from $500 per year to $5,000 per year.
- A separate statutory gift rider will no longer be required. Instead, gifting provisions may be added directly into the new form.
- Financial institutions and most others who receive the POA must either accept the POA within 10 days or give a written explanation as to why it is being rejected.
- If you must bring a legal proceeding to compel the acceptance of a statutory short- form POA, the court can award you damages including reasonable attorney’s fees.
- Potential recipients of gifts effected through a POA are not eligible to serve as witnesses to the execution of the POA.
- The new law clarifies the record-keeping requirement for agents. An agent must keep a record of all transactions conducted for the principal or keep all receipts of payments and transactions conducted for the principal.
- The agent will be considered a personal representative for the purpose of health care financial matters. Health care providers and health plans must provide the agent with information needed to determine the legitimacy and accuracy of charges for health – related expenses and benefits.
- If a POA substantially complies with the statutory requirements, it will be considered valid. Previously, the wording had to precisely match the statute.
Please note that despite the new law and the new form, your existing powers of attorney remain effective. However, these documents tend to become “stale” after about 10 years.
To minimize the risk of a bank rejecting your power of attorney, if your POA was signed long ago we do recommend that you update it.
If you have any questions, please contact us.