On December 15, 2020, Governor Cuomo signed a new law amending the requirements for executing a Power of Attorney form in New York State. The new law is scheduled to take effect in June 2021.
While there are several changes to the existing law, they all are meant to simplify a very complex and technical means for an individual to allow others to act on their behalf. In the interest of simplicity, the new forms need not contain language that is identical to the statutory form, so long as they substantially conform to that language.
The new form also does away with the “Statutory Gift Rider” provision, which required that the agent give gifts in excess of $500.00 on a separately executed “Rider” to the basic form. The new form permits such gifts to be included within the form itself (under the section for “Modifications”) rather than a separate rider to be attached to the form, and the amount permitted to be given by the designated agent is increased to $5,000.00.
Further, the amendment permits a third party to sign on behalf of a principal (the one who “gives” the power to the agent) who is unable to sign on his/her own behalf, so long as the person signing has been duly directed to do so by the principal.
The purpose of the amended form, and the intended benefit, is its acceptance by banks and other financial institutions, which may otherwise impose their own rigid requirements and standards of acceptance. Previously, Powers of Attorney were often refused, resulting in an undue burden, confusion, and payment delays. Previously, financial institutions were able to hold up enforcing a power of attorney for even the slightly non-conformity. Now, any institution which unreasonably delays or refuses to uphold or act upon a duly executed form may be subject to sanctions by a court. The burden of proof will shift from the executor of the form to the financial institution to provide a reason why a Power of Attorney form is not accepted.
These changes will make it easier for individuals to appoint a power of attorney and to act upon the power given by a principal. However, it will also require a knowledgeable professional to adhere to the basic requirements. It will also require that great care be taken to ensure that the form’s execution is made properly and with the principal’s knowledge and consent.
Blumberg has published standard power of attorney forms for over 100 years. Their widespread distribution and longstanding recognition and reliability secure their acceptance. Be assured that we will provide the necessary revisions to our existing forms to conform to the new requirements. As mentioned, the revisions are scheduled to take effect in June 2021, so check back for information regarding the availability of the new forms. The currently existing forms should continue to be used until the new law takes effect. Stay tuned.