THE ESSENTIAL RULES OF THE NEW POWER OF ATTORNEY

Here are the essentials of the new Power of Attorney Law as prepared by Joan Lensky Robert, Esq:

OVERVIEW OF TERMS AND PROVISIONS
1. Benefits from governmental programs includes governmental regulations,Social Security, military, Medicare and Medicaid.
2. Sign means any mark, including electronic signature, other than if the document will be used to record real property.
3. Statutory Major Gifts Rider (SMGR) must be SIMULTANEOUSLY EXECUTED BY PRINCIPAL AT TIME OF EXECUTION OF POA AND MUST BE INITIALED TO SHOW INTENT.
4. POA is durable unless expressly not.
5. Agent must account to a Guardian if one is appointed.
6. Agent may sign after the principal becomes incapacitated.
7. POA must be in 12 point font and contain the cautionary language and Important info language to be the statutory short form poa.
8. To be valid as to an agent, the agent must also sign. If 2 agents are to act jointly, they must both sign.
9. Other POAs may be used, but they will not be considered statutory POA. However, any POA executed after September 1, 2009 must contain a SMGR to be effective for gifts.
10. Execution of POA: By principal, before a notary, as a deed is executed in NY.
11. Agent must also sign before a Notary, in the manner that a Deed is executed.
12. Statutory Major Gifts Rider (SMGR) is signed by principal before 2 witnesses & notarized
WHAT POWERS DOES THE AGENT HAVE?
13. Powers for banking, retirement, chattel, real property and insurance do NOT include the authority to change beneficiaries or add beneficiaries if there is no SMGR.
14. If agent has a joint account with principal, the agent cannot add or eliminate joint owners or totten trust beneficiaries without SMGR.
15. New accounts may be opened with POA but they may NOT be solely in the name of the agent unless the intent is to make a gift, which may occur ONLY WITH SMGR.
16. No need to explicitly state in POA which estate or trust the agent may act upon for the principal.
17. Agent may continue tradition of gifts to individuals and charities under Personal Relationships BUT ONLY UP TO $500/YEAR without SMGR. Proposed amendments to the POA statute will clarify that the $500 annual gifts is a TOTAL of such gifts aggregated, and that no gifts may be made to the agent absent the SMGR.
18. Agent cannot make health care decisions but MAY REQUEST HOSPITAL BILLS & RECORDS AS AGENT AUTHORIZED TO MAKE PAYMENTS FOR HEALTH CARE.
19. Agent may NOT designate a third party to be the agent under a health care proxy to make health care decisions.
20. Agent may establish intervivos trust and may revoke the trust so long as that power is given in the SMGR.
HAVING THE POA HONORED
21. No third party shall refuse to honor a POA without good cause. Good cause would be the agent’s failure to provide an original or atty or court certified copy of POA, or the third party’s knowledge that there has been a referral to Adult Protective Services, or ACTUAL knowledge that principal is deceased, or incapacitated when POA is not durable.
22. Third party cannot refuse to honor POA by requiring its own form OR because time has elapsed since the document was executed OR because time lapsed between the principal’s executing the POA and the agent’s executing the POA.
23. REVOCATION OF POA: Given to financial institution at the office where accounts are located.
24. Third party may require Affidavit that POA is in full force and effect.
WHAT MUST THE AGENT KNOW ABOUT HIS/HER RESPONSIBILITIES?
25. Fiduciary duties and standard of care that agent owes to principal are set forth:
A. Must act in best interest of principal
B. No commingling of assets
C. Must keep records and be able to present them WITHIN 15 DAYS to a monitor, if appointed, or to the principal or to a coagent or successor agent or to Adult Protective Services or to a Court Evaluator, or GAL or Guardian or Conservator or to the Personal Representative of the estate of the deceased Principal.
D. Agent may be liable for breaches of fiduciary duty if proceeding is brought to compel the agent to provide records.
E. When agent engages in transaction, s/he is acknowledging that Principal is alive, and that agent has authority to engage in this transaction and has no knowledge that POA has been revoked.
26. Agent may RESIGN by giving notice to principal, successor agent, the monitor or guardian. If principal is incapacitated, agent may petition court to resign.
27. Principal may PROVIDE FOR ALTERNATE METHODS OF RESIGNATION in the POA.
28. Agent may be paid for services SO LONG AS POA SO PROVIDES.
29. Agent shall sign: AGENT as agent for PRINCIPAL or PRINCIPAL by Agent.
POTPOURRI OF PROVISIONS:
30. Principal may appoint a monitor to receive financial documents. Monitor does NOT have fiduciary duty.
31. N.Y. GOL 51510:
A special proceeding may be commenced by someone who is authorized to request records but has not received them OR to determine whether POA is valid or if Agent should receive compensation, or to remove the agent or to construe provisions of the POA or to compel a third party to honor the POA
32. POA terminates upon death of principal or its revocation.
33. Agent may no longer act if principal revokes agent’s authority or is spouse of
principal and they become divorced.
34. Principal may request information on his/her finances from agent at any time.
35. When 2 agents are appointed, it is presumed that they may act separately unless the POA is initialed ( ) My agents may act separately.
36. This POA revokes prior POAs unless it indicates that it does not.
37. If the agent is to receive compensation, the Principal must check ( )My agent shall be entitled to reasonable compensation for services rendered.
REVOCATION OF POA:
38. Written, signed and dated revocation must be delivered by the principal to the agent and to any third party that principal believes has received POA or acted upon POA.
39. If POA has been recorded, the revocation must be recorded.
40. Third party must have ACTUAL notice of revocation – recording the revocation is not actual notice to a third party.
41. Agent MUST HONOR the revocation unless the Principal is subject to a guardianship under Article 81 of the Mental Hygiene Law.
MODIFICATIONS
42. Additional provisions may be included, such as how an agent may resign.
43. If this POA is not intended to revoke prior POAs this must be indicated here.
44. Powers such as the power to waive or exercise an elective share or represent the principal’s interests in educational decisions or to express the intent to return home, often used in Elder Law planning, may be granted here.
45. The method of compensation to the attorney in fact may be indicated here.
STATUTORY MAJOR GIFTS RIDER (SMGR)
46. Must be of 12 point font
47. Principal’s signature must be NOTARIZED AND WITNESSED BY 2 WITNESSES, NEITHER OF WHOM IS A PERMISSIBLE DONEE.
48. Standard power: annual exclusion gifts to spouses, children, more remote descendants and parents (or twice that amount if the spouse will split gifts for gift tax purposes).
49. Additional power: A SPECIFIC AGENT is authorized to make the ABOVE GIFTS to him/herself.
50. If gifting above the annual exclusion amount is authorized, that must be specified. The purpose should also be specified (i.e., elder law planning, tax
planning). EX: UNLIMITED GIFT GIVING TO ALL OF MY CHILDREN, INCLUDING TO MY AGENT, ____, in order to effectuate an asset preservation plan. HOWEVER, ANY GIFTS MADE TO MY CHILDREN SHALL BE IN EQUAL SHARES… PROVIDED THAT GIFTS FOR THE BENEFIT OF MY CHILD…. SHALL BE PAID OVER TO A SUPPLEMENTAL NEEDS TRUST THAT I AUTHORIZE MY AGENT TO ESTABLISH FROM MY FUNDS.
EFFECTIVE DATE
51. September 1, 2009 for the repeal of the prior Statutory Short Form Power of Attorney
52. POAs executed properly prior to September 1, 2009 are still valid.
53. Nonstatutory POAs executed AFTER September 1, 2009 MUST STILL HAVE A SIMULATANEOUS SMGR to authorize giftgiving by the agent, and NOT ONLY GIFT GIVING TO HIM/HERSELF, BUT ANY GIFTGIVING.
54. The FIDUCIARY DUTIES are effective for POAS executed prior to September 1, 2009
55. The special proceeding may be initiated to clarify the validity of the document for POAs executed prior to September 1, 2009