New York makes important modifications to the facility of lawyer
On December 15, 2020, Governor Cuomo signed a long-awaited New York Power of Attorney Act that will go into effect in the summer of 2021.
The new legislation aims to simplify the unwieldy Power of Attorney (“POA”) and corresponding Forms for Statutory Gifts (“SGR”) and to address issues that have arisen from their use. Significant legislative changes include the following:
- There are currently strict restrictions against changing any wording in the legal POA form that would invalidate the form. According to the new legislation, a POA is valid as long as it corresponds “essentially to the wording” of the legal form, and provisions that are not applicable to the client can be left out without invalidating the POA.
- The SGR, which is currently a separate document to be executed in combination with the POA, will be included in the “Changes” section of the POA. While there are currently two documents with separate execution requirements, there will only be one document that will require two witnesses, one of whom can also act as a notary.
- According to the new legislation, a POA can be signed by a person other than the client on the instruction and in the presence of the client. This is in line with the requirements for signing a will.
- Third parties (with certain limited exceptions) are liable for damages if they inappropriately refuse to adhere to a notarized and attested POA and can rely on a certificate from the agent named in the POA and a legal counsel on any legal issue relating to the POA support POA.
- Third parties are also required (subject to an adequacy requirement) to accept POAs that have been properly executed in accordance with the laws in force at the time of their execution. This should address concerns about “outdated” POAs.
It is expected that this new legislation will greatly simplify the POA form for customers and help make coordination with financial and other institutions smoother.
Please note that no immediate action is required with respect to currently existing POA forms. The legislation makes it clear that POAs executed in accordance with the law at the time of execution remain valid and enforceable. NYS hasn’t issued a new legal form yet and is not expected to do so until the summer of 2021.