NYS Statutory Short Form Power of Attorney
Out With the Old, In With the New: Changes to the NYS Statutory Short Form Power of Attorney
June 28, 2021
What is a New York Statutory Short Form Power of Attorney?
The New York Statutory Short Form Power of Attorney is a document used by New York State residents to “authorize a third party to manage [their] property and financial matters” [1]. Your Durable Power of Attorney relates to the management of your finances and other affairs while you are still alive. Said document is often included within a traditional will package set (Last Will & Testament, Living Will, Health Care Proxy, and Power of Attorney).
As the principal, you designate an agent to act on your behalf should you be incapacitated or for convenience. For example, under the New York General Obligations Law, you may authorize your agent to assist you with:
Transactions: Real Estate, Banking, Business Operating, Insurance, and Estate Matters;
Legal Claims & Litigation;
Personal & Family Maintenance (e.g., making monetary gifts to individuals or charities);
Tax Matters.
Your Power of Attorney agent may also initiate financial transactions on your behalf. Say, for instance, you are traveling internationally and need money. If you are unable to access your bank account while abroad, your designated Power of Attorney agent may do so for you back home. Perhaps you have a pending real estate transaction and are unable to attend the closing. In this scenario, you may designate another (whether it be a spouse or the attorney representing you) to sign the necessary transfer forms on your behalf.
What elements of the Power of Attorney are changing?
Revisions have been made to both the New York Statutory Short Form Power of Attorney and certain provisions of Sections 5-1501 through 5-1514 of the General Obligations Law (GOL). Changes have been made with the intent to simplify the existing Power of Attorney form. The purposes of doing so, as outlined by Senate Bill Section 3923 and summarized by Anthony J. Enea of NYSBA, are as follows:
To permit substantially compliant language, as requiring exact wording is an unnecessary burden;
To provide “safe harbor” provisions for those who in good faith accept an acknowledged POA without actual knowledge that the signature is not genuine;
To permit penalties against any individual or entity (banks, financial institutions, etc.) that unreasonably refuses to accept a valid POA;
To allow a person to sign at the direction of the principal, if the principal is physically unable to sign;
To permit the agent to make gifts of up to $5,000 per year (increased from the previous limit of $500) without requiring a modification to the form;
To remove all of the provisions that apply to the Statutory Gifts Rider (SGR);
To clarify the agent’s obligations under the POA to keep records and receipts; and
To clarify the agent’s authority in financial matters concerning the principal’s health care. [2]
Again, many of these revisions have been implemented to make the Power of Attorney form easier for individuals to understand and use.
When are these changes taking place?
The aforementioned changes will be effective for all New York State Powers of Attorney signed on or after Sunday, June 13, 2021 (and are now effective as of the date of this publication).
How will this affect me?
If you currently maintain an existing Power of Attorney form executed prior to June 13th, 2021, your document maintains its validity. If, however, you are in the process of organizing the execution of your estate documents – or thinking of doing so in the future – you will want to ensure your Power of Attorney form complies with the new requirements. You may verify this with your attorney if they are in the process of drafting your estate documents.
If you or someone you know is interested in obtaining a will package and/or Power of Attorney form, please contact our office at (518)-899-9200 or through our website at this link.
Disclaimer: This article is intended to be educational and is not intended to be legal advice, which can only be given after an attorney-client relationship is established.
[1] Practical Law Trusts & Estates. Statutory Short Form Power of Attorney (NY). Thomas Reuters Practical Law. https://content.next.westlaw.com/Document/If90028b3854211e498db8b09b4f043e0/View/FullText.html?originationContext=document&transitionType=DocumentItem&contextData=(sc.Default)&firstPage=true
[2] Enea, A. (2021, January 22). The Long-Awaited Modifications to the Statutory Short Form Power of Attorney Have Been Enacted. New York State Bar Association. https://nysba.org/the-long-awaited-modifications-to-the-statutory-short-form-power-of-attorney-have-been-enacted/
