New York Durable Power of Attorney Laws

A power of attorney POA) is a legal document with many important uses. This article is about a durable power of attorney in the context of estate planning.

A principal creates a POA to grant an agent (or “attorney-in-fact”) the power to act on the principal’s behalf in certain situations. In many states, a power of attorney must include special durability language to prevent the authority from being terminated if the principal becomes incapacitated.

That’s not the case in New York. Under New York law, a power of attorney is durable unless it specifically states that it is terminated by the incapacity of the principal.

Estate planning is more than just deciding how your property is distributed after your death. A comprehensive estate plan also includes incapacity planning, which covers your healthcare decisions and how your assets are managed when you are alive but unable to manage them yourself due to incapacity. An advance directive handles incapacity planning for your healthcare decisions, while a durable POA handles incapacity planning for your financial matters.

This article explores New York State’s legal requirements for a durable POA. It also examines how to choose your agent, the scope of their powers, and how to revoke your durable POA. Things can become extremely difficult for your loved ones if you don’t have POAs in place.

Legal Requirements for Durable Power of Attorney

When it comes to creating a valid, durable POA, New York has strict requirements. These include:

The principal must be at least 18 years old and have capacity.

A New York DPOA generally must:

• Be for a principal who is at least 18 years old and has capacity
• Identify the principal and agent
• Be signed and dated by the principal
• Have two witnesses who witness the principal’s signature or acknowledgment
• Be acknowledged before a notary public
• Include the agent’s signed acknowledgment

Banks and other financial institutions scrutinize these documents before accepting their authority. Even a minor drafting or signing error can cause delays or outright rejection.

New York provides a statutory short-form durable power of attorney. If properly used, this “safe harbor” form meets the state’s strict requirements.

Choosing Your Agent

Your agent should be someone you trust to handle your financial matters. They also need the time and the ability to take on the responsibility. For this reason, some people choose to appoint a professional fiduciary as their agent.

Who Can Be Your Agent?

Any qualified person, other than an estate or trust, can serve as your agent. This includes a professional fiduciary, such as a trust company. An agent acting under a power of attorney has a fiduciary relationship with the principal. As a general overview, these fiduciary duties include:

• Acting according to the principal’s instructions or, in the absence of instructions, in the principal’s best interests
• Avoiding conflicts of interest
• Keeping the principal’s property separate and distinct from the agent’s property
• Keeping a record of all receipts, disbursements, and transactions entered into by the agent on behalf of the principal, and making this record available at the principal’s request

Fiduciaries are required by law to act in the best interests of their clients.

Appointing Co-Agents

With the statutory short form, you can appoint more than one agent. Unless you indicate that the co-agents can act separately, they must share all decisions together.

Appointing a Successor Agent

You may also designate a successor agent in the statutory short form. This agent’s authority becomes effective if your primary agent becomes unwilling or unable to serve.

The Agent’s Powers and Limitations

The agent’s authority over your financial matters may include any or all of these subjects:

• Real estate transactions
• Personal property transactions
• Bond, share, and commodity transactions
• Banking transactions
• Business operating transactions
• Insurance transactions
• Estate transactions
• Claims and litigation
• Personal and family maintenance
• Benefits from governmental programs or civil or military service
• Financial matters related to health care
• Retirement benefit transactions
• Tax matters
• “All other matters” (see below)

You have the option to grant your agent the authority to delegate certain responsibilities. If you grant your agent authority over personal and family maintenance, they may make gifts that you customarily have made to individuals (including the agent) and charitable organizations. These gifts cannot exceed $5,000 per calendar year unless you include the statutory gifts rider under the “Modifications” section of the power of attorney.

While the statutory form also lists “all other matters” as a subject, an agent’s authority under a durable POA is not absolute. For example:

• You cannot authorize your agent to make healthcare decisions for you (use a healthcare proxy for this)
• Your agent cannot typically control assets held in a trust (the trustee has authority over trust assets)
• Your agent cannot override your will or make decisions after your death (your death terminates the POA)

POAs can be tricky. If you feel like you could use sound advice, consider speaking with a New York estate planning attorney.

Revoking a Durable Power of Attorney

You may revoke or change your durable POA at any time while you are considered mentally competent. Revocation is accomplished by the following methods:

• Signing a written revocation
• Notifying the agent
• Notifying banks and financial institutions
• Destroying old copies when possible

To prevent confusion and unauthorized transactions, provide your updated durable POA to financial institutions and others who relied on the prior power of attorney.

What Happens if You Don’t Have a Durable Power of Attorney

If you become incapacitated without a durable POA, your financial matters will come to a standstill. Family members may have to file a guardianship proceeding in court to obtain authority over your financial matters. This costs time and money, along with adding stress to an already difficult time. In addition, the court may appoint a guardian you would not have.

With a durable POA, you take control of who manages your financial matters and ensure that the transition of decision-making is both timely and smooth. A durable POA can ensure your financial matters are handled efficiently by someone you trust and provide your family and loved ones with peace of mind.

How To Make a Durable POA Part of Your Estate Plan

If you’d like the assurance that comes with having a durable power of attorney in place, there’s no good reason to delay. Incapacity can happen at any time. The statutory short-form power of attorney can be an excellent starting point for creating your durable POA.

If the form doesn’t quite suit your needs, you may find that an online estate planning form offers more of the flexibility you seek. For legal advice tailored to your specific circumstances, consult with a New York estate planning attorney. An experienced lawyer will listen to your needs and goals to design a solution that works for you.