Significant changes to New York’s Power of Attorney law became effective June 13, 2021. This is a positive development as the new law brings some long sought after changes.
It is important to note that all existing powers of attorney that were executed prior to June 13, 2021 and were valid under the laws at the time they were executed, remain valid. However, it is a good time to review existing powers of attorney to make sure your selection of agents and successor agents are still appropriate and that the proper powers were granted.
Some of the significant changes under the new law are as follows::
· Allows a power of attorney to qualify as a statutory short form power as long as it contains substantially conforming language rather than exact wording as required by the prior law.
· In addition to being acknowledged, the new power of attorney must be witnessed by two persons who are not named in the power as agents or as permissible recipients of gifts. The new law incorporates by reference the law regarding witness execution of a Will, which provision requires that the principal’s signature be affixed in the presence of each of the attesting witnesses or be acknowledged to each of them by the principal that he or she affixed the signature. The principal may sign or acknowledge the signature to each attesting witness separately. The new law specifically provides that the person who takes the acknowledgment may also serve as one of the witnesses.
· Creates a procedure with specific time periods for acceptance or rejection of the power of attorney by a third party. The new law makes it unlawful for any party to unreasonably refuse to accept a properly executed power created either pursuant to the new provisions or an existing statutory short form power of attorney properly executed in accordance with the laws in effect at the time of its execution.
· Subjects any party who unreasonably rejects a valid power of attorney (including an existing power executed prior to this change in the law) to damages, including attorney’s fees, in any action to compel the party to honor the power of attorney.
· Creates a presumption of validity of the power when the principal’s signature has been acknowledged and witnessed and provides safe-harbor provisions for those who, in good faith, accept an acknowledged power of attorney without actual knowledge of forgery or revocation or that the power was procured through fraud, duress or undue influence.
· Repeals the Statutory Gift Rider and expands an agent’s power to make gifts in the aggregate per calendar year to $5,000 without requiring a modification to the form. Gifts above this amount, gifts involving real estate and/or gifts that differ from the powers referenced in the body of the power require specific authorization in the modifications section of the form.
· Allows a third party to sign at the direction of a principal who is physically unable. When a person signs at the direction of a principal he or she must sign by writing or printing the principal’s name and printing and signing his or her own name.
The new law specifically enumerates that the following matters are deemed to be unreasonable grounds for rejection of a power of attorney:
· The power of attorney is not on a form prescribed by the third party to whom the power of attorney is presented.
· There has been a lapse of time since the execution of the power of attorney.
· There is a lapse of time between the date of acknowledgment of the signature of the principal and the date of acknowledgment of the signature of any agent.
The experienced attorneys at Kurre Schneps LLP can guide you on properly incorporating a power of attorney into your estate plan.
