Today’s New York Law Journal has an article by Daniel G. Fish highlighting the significant practical effects of New York’s revised power of attorney statute.
Among the requirements of the new statute:
• The principal must execute a Statutory Major Gifts Rider (SMGR) if he or she intends to authorize the agent to give gifts over $500 per year to any individual or institution.
• The agent must sign to acknowledge the assumption of legal responsibility.
• All third parties must accept the Power of Attorney, absent reasonable cause to reject it. The previous statute only required acceptance by banks, credit unions, pension funds, and retirement systems, leaving brokerage firms and mutual funds, among others, free to ignore the statutory short form.
• The revised statute also provides for a process for obtaining a court order compelling a third party to accept the Power of Attorney.
The article concludes:
This document was also used by a large number of individuals who purchased the forms and executed them without the advice of an attorney. The most profound practical effect of the new statute is the possibility that the power of attorney has become so complicated that it can only be executed under the supervision of an attorney. The statutory short form and SMGR will be a minimum of six pages long. The technical requirements are so numerous that the risk of error leading to an invalid power of attorney is high.
As I noted in my earlier post, there is now only one statutory short form in New York. By default it is a durable power of attorney; it must be modified to be nondurable or springing. Unlike the model form contained in the Uniform Power of Attorney Act, the statutory short form does not even alert the user to the possibility of making it effective only at a later date. Non-lawyers doing it on their own in New York after March 1 or September 1 will probably be even less likely to think about restricting their Powers of Attorney to fit their circumstances. If they do consider restrictions, they will have to modify the form themselves.
Practitioners who use non-statutory Powers of Attorney should note that certain statutory requirements under GOL § 5-1501B will now apply to all Powers of Attorney executed in New York, including the requirement that they contain the exact wording of the “Caution to Principal” and “Important Information to the Agent” contained in the new statutory short form.
Related posts:
- Power of attorney created under the old New York statute still valid after 9/1/09
- Will New York revise the power of attorney law again?
- New York’s new power of attorney law
- New York Power of Attorney and Statutory Major Gifts Rider forms
- “Major revisions to New York Power of Attorney Law” in the Nassau Lawyer
Post a Comment