New York Estate Planning & Elder Law Blog
The crisis brought by COVID has served as a stress test for many of the laws and regulations effecting our nation’s seniors. The power of attorney, a document that gives one person, the agent, the legal power to act for another, the principal, fills a dire need to put control over their health and resources in trusted hands in the event of incapacity, especially in times of crisis. Patients in nursing home facilities, for example, need quick and durable responses to the crisis. And guarantees that the courts, and third parties such as banks, will respect their decisions.
In 1948, the “Short Form” POA was created to simplify the process for New York citizens. Since then, it’s become anything but. A new law rectifies this.
New Power of Attorney Bill Comes into Effect June 13, 2021
After years of pressure from lawyers and consumers, Gov. Cuomo on December 15, 2020 signed a new power of attorney bill that will come into effect on June 13, 2021.
The changes protect elders, make it easier and more full-proof to create a power of attorney, and help ensure that once you sign a POA, it will stick. Also, the bill increases the gift-to-loved ones dollar amount that an agent is able to make in the event of your incapacity.
Less Hassle and Delay for POAs
One of the most important features of the new law allows for sanctions, attorney fees, and damages in the event a recipient neither accepts nor reject in writing for articulated reasons within 10 days. In other words, there is a legal presumption that the document is valid. This will reduce the likelihood that banks, for example, will give you a hard time in a knee-jerk fashion over technicalities.
Better still, you are protected from nit-picking oversight when it comes to the language you use in your agreement. As long as you substantially conform to the required wording, your document is valid. There is not exact wording requirement. Furthermore the principal can execute a POA without personally signing the document. All new POAs, however, require two witnesses, one of whom can be the notary.
Third parties will also have less incentive to give principals and agents a tough time. The new bill protects them from liability in the event of future agent wrongdoing.
Power of Attorney Gifts Process Simplified and Expanded
If as a principal you wanted to give your agent the ability to make gifts to loved ones in the event of your incapacity, the New York Short Form POA required that you attach a “rider,” which despite its easy name was an entirely different legal document. With the new bill that is no longer the case. The agent is allowed to make gifts to parties to whom you have customarily given gifts.
The dollar amount and agent is able to spend per year on a party has increased, as well. From $500 to $5,000.
A Win for New York Citizens
In times of crisis and more calm periods alike, the power of attorney is one of the most adaptable and important estate documents at your disposal. The new changes, coming into effect on June 13, 2021, give New York citizens more options, and more protection, for their long and short term estate planning goals.