New York's Extensively Revised POA Law Takes Effect

Last Updated: 9/3/2009 1:59:47 PM

Sweeping changes to New York State's laws dealing with powers of attorney became effective September 1, 2009. POAs executed in New York on or after that date will not be valid if they do not comply with the new law, although it will not affect POAs executed before September 1.

As New York attorney Daniel G. Fish says in a New York Law Journal article explaining the new law, "The most important changes restrict gift giving, increase the legal responsibility of the agent, enhance acceptance by third parties, create a new cause of action and extend coverage to medical records."

Under the new law, for example, the revised statutory short form power of attorney cannot be used to grant authority to make major gifts of more than $500 per year. Greater gift giving can be accomplished only through a "statutory major gifts rider" (SMGR) that must be executed simultaneously. Gift-giving authority can also be made in a non-statutory POA, but the form must be executed with the same formalities required for the SMGR.

Writing in LISI Estate Planning Newsletter (No. 1513, Aug. 31, 2009), Carlyn McCaffrey and John McCaffrey state that, "The new law now requires a set of documents that are considerably more complex than the short form statutory powers that were in effect under the old law. The new forms call for more decisions to be made by the principal and will likely require significantly more input from and discussions with the principal's attorney."

For NY Code Title 15: Statutory Short Form and Other Powers of Attorney for Financial Estate Planning, click here.

The New York State Bar Association has made the new forms available for download on its Web site.

For more, see Daniel Fish's New York Law Journal article on the new law, available in the ElderLawAnswers Knowledge Bank (click here); and click here for a post on the new law on New York Trust & Estates Litigation Blog.