Updates to the Statutory Form

The new law changed the wording of the statutory POA, the authority granted by the document, and even changed the execution requirements for a valid POA.

Agent’s Ability to Act (NY GOL §5-1502D & NY GOL §5-1513)

Under the old statutory POA, when a principal appointed more than one agent, the default rule was that they had to act together. This meant the agent’s both had to agree to any action taken on behalf of the principal. To allow agents to act separately, the principal initialed a line that stated, “My successor agents may act SEPARATELY.”

The default rule has not changed. If the principal appoints more than one agent and does not initial the line that allows them to act separately, the agents must both agree to any action taken on behalf of the principal. However, a new line has been added to the statutory POA where the principal may initial a line that states that his or her agents must act together, which is redundant.

The same lines are present for successor agents. If the principal wishes to designate successor agents, he or she should also decide whether these agents must act together or may act separately.

Even if the principal requires agents to act together (or does not initial either option), the agents may agree among themselves to have just one person take care of banking transactions if the power to delegate is initialed on the statutory POA under section (o) on the list of powers. The previous law included section (o) on the statutory form, but there was no corresponding grant of authority in the law. This has been updated and subsection (o) is now present in the law.

Recommendation: Make sure the principal decides whether to have the agents act together or separately and initials the appropriate line. Although the default rule requires agents to act together, the less interpretation required of third parties, the more likely a POA will be accepted without delay.

Health Care Finances (NY GOL §5-1502K)

The statutory form and the authority granted to agents regarding health care finances have been updated. Under the old law, an agent had the authority to access records and decide whether to pay the principal’s medical bills. The new law grants more expansive authority over matters relating to the principal’s health care, including the authority to:

1. Receive protected health information from health care providers and health plans, and to use this information to verify the legitimacy and accuracy of
   • The principal’s payment obligations
   • The principal’s entitlement to benefits
2. Pay the principal’s medical and other health care bills
3. Act as the principal’s personal representative in health care matters (the authority to make health care decisions is excluded)

Removal of the Statutory Gifts Rider (NY GOL §5-1514) – Repealed

The Statutory Gifts Rider (SGR) has been repealed. All gifting authority must now be included under the modifications section of the new POA. The modifications required to the Statutory POA for estate planning or government benefit planning goals is covered in ‘Modifying the Statutory Power of Attorney” below.

The effects of this change are far reaching. The SGR was a separate document that had to be executed under stricter formalities than the statutory POA (two witnesses were required). While it was more complicated to complete than the statutory POA, the SGR required the principal to confront the fact that he or she was granting the agent gifting powers that could decrease or deplete the principal’s estate. It is possible including gifting powers only under the modification’s section will make it easier for an unscrupulous agent to obtain gifting powers without the principal’s knowledge.

Personal and Family Maintenance (NY GOL §5-1502I)

The gifting authority granted under “personal and family maintenance” has been increased to $5,000 from $500. As with the old law, the ability to make gifts under this section only applies if the principal was making these gifts before the agent stepped in.

Execution of the Power of Attorney (NY GOL §5-1501B(1)(b))

With the many other changes to the statutory POA, the formalities for execution of a POA have changed:

1. Previously the principal’s signature on a POA only had to be notarized. On the new statutory POA, the principal’s signature will also require two disinterested witnesses. A disinterested witness must be someone who (1) is not named as an agent in the POA, and (2) is not eligible to receive gifts under the POA.
2. A third party is now allowed to sign the principal’s name on his or her behalf. The third party cannot be named as an agent on the POA, and the person signing must have his or her signature acknowledged before a notary. The principal’s name must be printed or written, with the person signing adding his or her name afterward.

The principal must be physically present when the person signs the POA on behalf of the principal. There is no provision for e-signing or other remote procedures.

Recommendation: A third party signature for the principal should be a last resort. If the principal can sign, even if the signature is shaky and illegible, he or she should do so. A third party can help steady the principal’s hand or provide other support to make sure the principal signs the document. Like following the statutory form whenever possible, having the principal sign the POA makes it more likely that a third party will accept the POA without court involvement.