New York’s new Power of Attorney statute becomes effective on September 1, 2009. The major changes are as follows:
New Statutory Short Form. The statute prescribes a new Statutory Short Form Power of Attorney. A major change is that the agent must now sign the form (before a notary) in addition to the principal.
Statutory Major Gifts Rider. The gifting provision in the Statutory Short Form only permits gifts up to $500. If a principal wants to authorize the agent to make larger gifts – i.e., virtually every case – the principal must execute a “Statutory Major Gifts Rider” or a non-statutory form POA.
The Statutory Major Gifts Rider (“SMGR”) has three substantive sections. Section (a) grants the agent limited authority to make annual exclusion gifts to the principal’s spouse, children, descendants and parents. Section (b) allows modifications where broader powers may be inserted. Section (c) allows the agent to make gifts to himself or herself.
The SMGR must be acknowledged and witnessed by two witnesses in the same manner as the execution of a Will. Generally, this requires two witnesses and a notary.
Appointment of a Monitor. In the new form there is an optional provision that the principal can appoint a “monitor” to request and receive records of transactions by the agent. The statute provides for a special proceeding that a monitor can bring to compel an agent to produce a record of receipts and disbursements and for other purposes. This provision should help reduce abuse of the power of attorney by the agent.
Compensation. The new form gives the principal the option to initial a box if he or she wants to provide reasonable compensation to the agent.
Not retroactive. The new law is not retroactive. Powers of Attorney properly executed in accordance with the law in effect at the time of its execution remain valid.
If you have any questions about the new law, please contact us.