September 9th, 2010
New York State Governor David Paterson signed the Power of Attorney (“POA”) revision bill into law on August 13, 2010, which becomes effective on September 12, 2010. The bill significantly revises the previously amended POA statute that went into effect on September 1, 2009.
The September 1, 2009 POA law was intended to curb fraudulent behavior and abuses by agents (primarily against elderly principals), and to prevent principals from delegating broad powers to their agents without understanding what they were doing. The law imposed a more complicated and lengthy statutory POA form; required a “statutory major gifts rider” (“SMGR”) to be executed simultaneously with the statutory form in order to give the agent gifting power of more than $500; and set forth strict requirements for the execution of the documents. However, there were problems with the 2009 revision, such as the automatic revocation of previously executed POAs and the fact that every POA executed in New York State, including limited POAs for specific business or commercial transactions, had to comply with the law’s rigid requirements.
The 2010 revision addresses many of the problems with the 2009 POA law by clarifying certain ambiguities and eliminating certain provisions. Among the changes are:
- Addition of a provision that expressly provides that previous POAs will not be automatically revoked by executing a new POA
- Exclusion of POAs executed for specific limited business or commercial purposes, such as real estate transactions and proxy voting powers, from compliance with the requirements of the new law
- Clarification that powers of attorney may be used to make gifts in accordance with a preexisting pattern of gifting up to $500 in the aggregate (not per donee)
- The renaming of the “statutory major gifts rider” (“SMGR”) to the “statutory gifts rider,” (“SGR”) under which all other gift-giving authority must be made
- Clarification that the notary can serve as one of the two necessary witnesses during execution
- Clarification that a mistake in wording, such as spelling, punctuation or formatting will not invalidate the statutory gifts rider or statutory short form POA
The corrections will be retroactively applicable to POAs executed on or after September 1, 2009. Therefore, POAs properly executed under the 2010 law between September 1, 2009 and September 12, 2010 will be deemed valid in the state of New York and will not need to be re-executed even if they do not comply with the 2009 law.
Entry Filed under: Power of Attorney (POA)