New York Strengthens Power of Attorney Law

On December 15, 2020, Governor Andrew Cuomo signed bill number A.5630-A/S.3923-A modifying and strengthening New York’s Power of Attorney law.  A Power of Attorney is simply a document in which one person (the principal) grants the authority, or “power” for another person (the agent, or attorney-in-fact) to act on the principal’s behalf.  We routinely use Powers of Attorney in real estate transactions and when drafting estate plans.

Among other things, the new law, effective June 13, 2021 does the following:

1. Includes a statutory “short form” Power of Attorney and non-statutory Power of Attorney in the definition of Power of Attorney.
2. Allows a Power of Attorney to “substantially conform” to the statutory short form instead of requiring the form to be utilized without any changes.
3. Under certain circumstances a Power of Attorney can now be executed by the principal or someone signing in the name of the principal in the principal’s presence at the principal’s direction.
4. A third party is now permitted to accept and rely on a Power of Attorney that was allegedly notarized even if the Power of Attorney is ultimately found to be invalid.
5. Third parties now have a 10-day “shot clock” to accept or reject the Power of Attorney. Rejections must be in writing and must specify the reason for rejection.  This effectively creates a presumption of validity for the Power of Attorney.
6. Allows a court to award damages (including attorney’s fees), if an action is brought to compel a third party to honor a Power of Attorney and the court finds that the third party acted unreasonably in refusing to honor a Power of Attorney.
7. The old $500 limit on annual gifts was increased to $5,000 and the principal retains the discretion to authorize larger gifts in the Modifications section.

It is important to keep in mind that the new law does not invalidate Powers of Attorney duly executed prior to June 13, 2021.

For questions about Powers of Attorney or general information about our firm, please contact us at (914) 338-8050 or send an e-mail to keith@betenskylaw.com.  We look forward to hearing from you.

Betensky Law PLLC
118 N. Bedford Road, Suite 302
Mount Kisco, New York 10549
(914) 338-8050
keith@betenskylaw.com
www.betenskylaw.com

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