On December 15, 2020, Governor Cuomo signed into law changes to the New York power of attorney (“POA”) law, which will take effect on June 13, 2021. These changes will not impact the validity of an existing POA form and statutory gifts rider if it is executed in accordance with the provisions of the current law.
The major changes from prior law are:
- The power of attorney only has to ‘substantially conform’ with that of the statutory form.
- There will no longer be a requirement for the principal to execute a separate statutory gifts rider. Instead, any powers granted to the agent will be within the power of attorney document, under the modifications section. If the document fails to include the power to gift, the agent may still gift up to $5,000 each year on behalf of the principal.
- If the principal is unable to physically initial or sign the document, the principal may direct a third party to do so in the principal’s presence.
- Institutions cannot unreasonably reject a power of attorney. Doing so subjects institutions to penalties issued by a court of competent jurisdiction. However, an institution may request the agent to certify to any facts as it relates to the principal and request an attorney opinion letter.
Back in 2009, New York State made numerous changes to the law governing powers of attorney. While the goal of the 2009 overhaul was to provide more protection to the principal as it relates to gifting, the changes were overly complex and burdensome for the principal. Additionally, many institutions continued to reject powers of attorney and instead required the principal to sign the institution’s own form.
Under the new law, there is a presumption that a power of attorney is valid. The new power of attorney law does not invalidate older power of attorney documents that were properly executed prior to its effective date. However, it may still be advisable to consult with an experienced estate planning attorney to see if updating your documents would be in your best interest.