On December 15, 2020, Governor Cuomo signed into law a bill that makes significant changes to the New York Power of Attorney Law (Title 15 of the General Obligations Law) and the statutory short form power of attorney. The new law is effective as of June 13, 2021. Any power of attorney that was signed before the effective date will still be valid.
Under the new law, strict compliance with the statutory short form is replaced with substantial compliance. This means that certain insignificant changes to the form will not invalidate an otherwise valid power of attorney.
The statutory gifts rider, which caused a lot of confusion, has been eliminated. An agent by default is now given the authority to make gifts on behalf of the principal of up to $5,000 per year. Any additional gifting authority can be given to the agent in the Modifications section of the form.
The signing requirements for the statutory short form have been changed to allow the power of attorney to be signed at the direction of the principal. Moreover, two witnesses (one can be the notary) are now required for every power of attorney. In addition, each agent must provide the date that the agent signed the power of attorney on the form.
Changes were also made to the construction provisions of the law and the rules regarding the acceptance and reliance of a statutory short form power of attorney. Importantly, the new law strengthens the enforcement against third parties. It is now presumed that a power of attorney is valid. A court can award damages, including reasonable attorney’s fees and costs, if the court finds that the third party acted unreasonably in refusing to accept an agent’s authority to act on behalf of a principal.
These changes should make executing a New York power of attorney easier and places a greater burden on third-party financial institutions to accept an agent’s authority to act. If you have not updated your power of attorney in a while or do not have one in place, you should contact your NP attorney to discuss your options.