The Power of Attorney is arguably one of the most important documents that you can complete during your lifetime and is equally the most misunderstood.
The Power of Attorney designates who will be in control of your assets and will take care of your affairs in the event that you are unable to do so or are incapacitated. On Dec. 15, 2020, legislation was passed setting forth new criteria for the Power of Attorney to be valid and went into effect on June 13, 2021.
The major changes make it easier for a Power of Attorney to be valid, the elimination of a separate Statutory Gifts Rider, and the ability for a person to sign on a principal’s behalf. These changes make it much easier for those to ensure their legal and financial matters are taken care of should they become unable to or otherwise incapacitated.
First, the new Power of Attorney statute has removed its requirement that the Power of Attorney must exactly conform with what is worded in the statute. Instead, if the language of the Power of Attorney “substantially conforms,” third party institutions will be hard-pressed in rejecting the document.
If rejected, these institutions must state the reason why they are rejecting the Power of Attorney. The rejection of these statements could even result in sanctions to these institutions. These changes make it much easier for your agent to act on your behalf by minimizing the worry that an institution will reject your Power of Attorney.
Next, the Power of Attorney no longer needs to be signed by the principal. The Power of Attorney may now be signed on behalf of the principal by someone other than the agent if that person is in the presence of the principal and is acting in the principal’s direction. This change is important because those who are seriously ill and are unable to write themselves may still execute a Power of Attorney despite their limitations.
Finally, the new statute increased the amount that the agent may gift annually from $500 to $5,000. A separate Gift Rider document is no longer needed to authorize your agent to make such gifts. The gifting authority is now an option within the document itself. In practice, the principal does not have to sign more than one document in order to authorize their agent to move assets out of their name. It also eliminates the confusion of signing two separate documents that have been historically paired together.
With these changes to the law, one thing remains the same: The Power of Attorney is still one of the most important documents that you will sign in your life. Should you become unable to handle your financial and legal matters, it is crucial that you have someone that you trust and is willing to step up to the plate for you to handle these matters.
This statute simplifies the process of appointing an agent to act on your behalf, ensures that your Power of Attorney will be accepted by third party institutions, and authorizes your agent to protect bigger chunks of your assets. It is essential that you consult with and estates attorney with expertise in this evolving document to ensure that your affairs are taken care of should you become unable to take care of them yourself.
Robert K. Hilton, III is an attorney with the law firm of Hilton Estate & Elder Law, LLC, with offices in Utica, Boonville, Rome, Syracuse, Lowville and Gouverneur, NY. He has more than 25 years of legal experience and currently concentrates in estate planning matters. He can be reached at 315-624-9600 for free initial, confidential consultation.Visit us on the web at:www.Hiltonlawny.com