The New Year is traditionally a time to reflect, to think back over the past 12 months and to make resolutions for the future.
The coronavirus pandemic has made this company harder than usual. Given the fast moving and deadly virus, many found that if they were incapacitated and unable to make material legal decisions, they were out of order.
On December 15th, Governor Andrew Cuomo signed a bill that will make New York’s power of attorney far more consumer-friendly and easier to obtain. This was both a timely and long-awaited move by the governor, which the New York State Bar Association had advocated for some time.
A power of attorney enables a “client” to appoint another person to act as an “agent” on their behalf and to take control of important life decisions. In most cases, these documents are used for specific and limited purposes, but there are also some that offer a much broader range of competencies.
The ability to empower a trusted agent is intended to bring comfort and confidence to individuals that their well-being and assets are in good hands in the event they are unable to make potentially life-changing decisions for themselves. However, changes to the New York Power of Attorney in 2009 were of great concern to the bar, especially members of the Elder Law and Trusts and Estates sections, who felt the process was unnecessarily difficult and also did not provide adequate protection for their clients.
Thanks to the law passed by Legislature and signed by the Governor earlier this year, the New York Power of Attorney is not only far more user-friendly, it also has extra teeth in case it is not accepted, as required by law .
One of the most important changes is that the standard will be an essential, rather than a strict, compliance. In other words, minor errors in a power of attorney form no longer invalidate it. In the past, the most trivial mistakes – from spelling and punctuation to formatting and imprecise wording – were enough to allow the form to be rejected. This will no longer be the case. If the rejection of a power of attorney form – by a bank or other entity, for example – is deemed inappropriate by a court, both legal fees and damages may be awarded.
We hope that the risk of paying fees and damages is sufficient to reduce the number of denials of powers of attorney. Until now, many institutions have automatically refused authorization forms because there was no mechanism to actually force them to comply with the law. Hopefully this new approach will act as an incentive to create procedures that make acceptance of power of attorney the rule rather than the exception.
Other changes include changing the power of attorney signing requirements that allow someone who is unable to brand on their own name to have someone else sign on their behalf. the requirement of two witnesses – one of whom can be a notary – and the increase in total allowable gifts and family support from $ 500 to $ 5,000 per year.
In addition, a bank or other institution only has ten days to honor or reject a proxy form, and the rejection must be in writing. The rejection is open to appeal and once a response has been received, the institution concerned has only seven days to make a final decision.
This change is necessary because, in many cases, people being hospitalized or living in nursing homes are forced to pay late fees as the very facilities that would receive payment if they accepted proxy forms from residents or patients to reject them immediately. This is both unfair and unacceptable.
These changes were negotiated not only with the governor’s office and the principal sponsors of the Power of Attorney Act – Senator Brad Hoylman and Rep. Helene Weinstein – but also with representatives from the New York Bankers Association. The bar is grateful that we were able to reach a compromise that works for everyone, but most importantly, protects some of our most vulnerable New Yorkers.
At a time when so much is uncertain, it is gratifying to finally realize our long-awaited goal of improving the New York authority. We hope these changes, which go into effect in June, will bring some level of convenience to New Yorkers in 2021.
Scott M. Karson is President of the New York State Bar Association.
The views expressed by commentators are those of the authors only. They do not necessarily reflect the views of this station or its administration.
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