United States:
Highlights of the new power of attorney legislation
December 18, 2020
Hard Secrest & Emery
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Governor Cuomo has signed laws that will significantly change New York’s power of attorney legislation. The legislation, Chapter 323 of the Session Acts for 2020, will come into effect 180 days after yesterday December 15. With the signing came an agreement to amend the legislation (mainly to require two disinterested witnesses to sign the warrant in addition to authentication). The amendment is expected to take effect before the effective date of Chapter 323.
In a change that is likely to create some concerns with third parties, a procedure for enforcing authority may now include awarding damages, including reasonable attorney fees and costs, if the court determines that the third party is in denial of authority has acted inappropriately authority of the agent. However, the legislation contains a “Safe Harbor” provision which provides a good faith basis for reliance on recognized authority and which enables a representative’s certification and legal counsel to be obtained.
Below is a summary of the legislation:
- Legislation expands the grounds for reasonable refusal to comply with a power of attorney. It now includes the agent’s refusal to issue a certificate or attorney’s opinion. A third party can now also honor a power of attorney and rely on the agent’s authority if the third party has a good faith belief that the power of attorney is valid and has no actual knowledge that either the power of attorney or the agent is invalid does not have the authority to perform the requested action.
- With regard to the exercise of a power of attorney, the law expressly provides that a person who, in good faith, accepts a recognized power of attorney without actually knowing that the signature is not genuine, can rely on the assumption that the signature is genuine is.
- Legislation sets out a schedule and procedure for the acceptance or rejection of a power of attorney by a third party.
- The legislation relaxes the requirement that the “exact wording” of the “Beware of the Client” and “Important Information for the Representative” sections, which must be included in both the current and new legislation, be included in the authorization must be included. An authorization is permissible if the language “essentially corresponds” to the legal language.
- In a change that many will likely enjoy, the legal gift driver is eliminated. Now the donation authority that goes beyond the “standard amount” is to be included in an amendment section in the power of attorney itself.
- Finally, the power to give gifts with no change language in the change area was increased from $ 500 to $ 5,000 each calendar year.
Originally published by Harter Secrest & Emery, December 2020
The content of this article is intended to provide general guidance on the subject. A professional should be obtained about your particular circumstances.
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