On December 15th, 2020, New York Governor Andrew Cuomo signed into law NY State Senate Bill S3923A, which contains long-awaited and welcome changes to New York’s Statutory Power of Attorney form (POA).
A POA is used to authorize another person to take legal or financial action on your behalf if you are unavailable or unable to act on your own. For example, a POA can serve as a one-time convenience to allow another to sign a contract for you if you are out of town. The POA can also serve more long-term and critical purposes by allowing families to handle finances, alter living arrangements, and apply for Medicaid and other public benefit programs on the behalf of a relative who is unable to implement such actions due to a medical, cognitive, or age-related disability. This wide application makes the POA one of the most important and frequently used estate and long-term care planning documents.
The current POA that was introduced in 2009 is complicated, cumbersome, and composed of two separate documents: the Short Form and the Statutory Gifts Rider (SGR). Its design flaws made the POA prone to improper execution and resulted in frequent rejections by financial institutions being asked to honor them. The new law requires third parties, including those financial institutions, to honor the POA or provide specific written reasons for its refusal within 10 business days. If court action is necessary to compel acceptance of the POA, the court can award damages and attorneys’ fees.
The new law significantly simplifies the current POA. It permits “substantially compliant language” instead of requiring the exact words used in the statute; eliminates the separate SGR; increases the total annual statutory gift amount from $500 to $5000; provides instruction on how to have another sign the POA on your behalf; and makes the agent a personal representative for purposes of health care matters. These changes, which become effective on June 13th, 2021, are anticipated to make the POA easier to execute and more readily accepted by third parties.
Your existing POA remains effective but may still benefit from revision if it does not cover long-term care planning options or reflect your current choice of agents.
Contact Loganzo & Mantell today for additional guidance on the effects of this legislation and any questions regarding your existing POA or long-term care planning strategies as well as help with all your business needs.
Loganzo & Mantell PLLC
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