You can make a useful document called a power of attorney if you want someone to be able to sell or mortgage your property, file your taxes, or even deposit your checks at the bank. A POA is a straightforward legal agreement that gives someone you trust—referred to as an “agent” or “attorney-in-fact”—certain authority to take care of particular situations on your behalf. You don’t need to engage a lawyer in New York (or any other state) to draft your power of attorney. You can save time and money by doing it yourself. Any POA you draft is just as legitimate as one that was created by a lawyer, provided you adhere to New York’s regulations.
The state of New York revised its rules as of June 13, 2021, to simplify the process of creating a statutory short-form POA, often known as a financial POA. And it’s now simpler than ever to draft a New York POA that complies with your wishes with the use of free power of attorney forms. In this article, Eastcoastlaws.com will outline all you need to know about New York power of attorney.
Why Do I Need A Power Of Attorney?
Anyone can suddenly fall critically ill or get hurt. If this occurs to you, managing your daily concerns, such as paying bills and deciding whether to accept (or reject) medical treatment, may become challenging. If you don’t have a POA, your family members must request authorization from the court to act on your behalf. This can be difficult and time-consuming. Additionally, the person the court appoints to lead may not always be the person you would have picked yourself or may not be aware of your desires. You can prepare ahead of time and make sure that someone you can rely on has the authority to act on your behalf when you are unable by obtaining a POA before you need it.
Types Of Powers Of Attorney In New York
Numerous POAs are recognized in New York. Each one has a specific function and grants your agent unique abilities. Choose the option that best suits your circumstances. In this post, Eastcoastlaws.com has some options for you:
- Durable power of attorney: If a power of attorney is “durable,” it indicates that it allows your agent to act even if you become incapable, such as if you go into a coma. Because you’re preparing for a scenario in which you might not be able to convey critically important decisions on your own, durable POAs are utilized in estate planning. If your POA expires if you become incapacitated, it wasn’t durable enough. In the state of New York, unless you specifically specify otherwise in your POA document, all POAs are durable by default. However, it’s a good idea to indicate in your POA that you want it to be long-lasting. If your power of attorney isn’t durable, your agent’s power to act ends if you become incapacitated.
- Statutory power of attorney / financial power of attorney: To grant your agent in New York the power to manage your finances and business affairs, you can use a statutory POA. You could, for instance, delegate to your agent the authority to handle your tax preparation, sell your real estate, and other tasks. A financial power of attorney is another name for this sort of POA. Your agent cannot make healthcare choices on your behalf under a statutory power of attorney. In New York, a healthcare proxy protects those decision-making rights. However, financial choices regarding the price and payment of your medical care might be made by your agent.
When making a statutory power of attorney, New York residents can use New York’s statutory short-form power of attorney. This “short form” is a template created by the New York state government that residents can use for free. It’s usually a good idea to use the short form POA because it’s easier for banks and other institutions to recognize.
New York Power Of Attorney Requirements
To make a New York POA, you must:
- Be at least 18 years old.
- Have mental “capacity,” meaning you have the ability to comprehend the nature and consequences of making a POA.
- Type or write your POA in a legible font. If you’re typing, don’t use anything smaller than 12 point font size.
- Sign and date your POA in the presence of two witnesses, and have it notarized. In New York, your notary can also serve as one of your witnesses. (Remember, if you’re making a health care proxy, you only need witness signatures — not a notary.)
- Have your chosen agent sign and date your POA. If you’re creating a New York statutory power of attorney, have their signature notarized. Your agent doesn’t have to sign your POA at the same time you do — but they will have to sign before they’re able to act as your agent.
Your POA shouldn’t be witnessed by a beneficiary of your estate in order to prevent a conflict of interest. (This includes anyone you’ve nominated in your final will and testament, your spouse, and your kids.) Additionally, your agent cannot serve as a witness, but they must still sign your POA to acknowledge their authority.
Giving your agent a copy of your power of attorney and outlining your expectations after you create it is a good idea. To demonstrate their ability to act on your behalf before the proper parties (such your bank or hospital), they must show the POA.
Who Can Serve As Your Agent In New York?
Any person who is at least 18 years old and has mental capacity may serve as your POA agent under New York law. It’s not necessary for your agent to be a lawyer; in fact, the majority of people don’t select a lawyer as their agent. You can choose a member of your family, a close friend, a business partner, or anybody else you are confident will represent your interests.
By law, your agent is required to:
- Follow the instructions you’ve outlined in your POA
- Act in your best interests
- Keep your property separate from their own
- Disclose their relationship as your agent whenever they sign on your behalf
- Keep receipts for all payments and transactions they make on your behalf
If You Have A Power Of Attorney, Do You Still Need A Will?
Yes, experts in estate planning concur that you ought to have both a will and a POA. These documents have a variety of uses. How you want your possessions dispersed when you pass away is specified in your final will and testament. Your POA addresses crucial choices that must be made during your lifetime in the event that you are hurt or unwell.
What Are The Legal Requirements Of A Financial POA In New York?
For your POA to be valid in New York, it must meet certain requirements.
Mental Capacity for Creating a POA
New York requires that the person making a power of attorney be able to understand “the nature and consequences” of the POA. (N.Y. Gen. Oblig. Law §5-1501(2)(c).) The exact contours of this mental capacity requirement are open to interpretation by New York courts. If you’re helping someone make a POA and you’re unsure whether they have the required mental capacity, consult an estate planning attorney.
In addition, New York requires that certain languages be included in the POA. If you make your POA using a statutory form, reputable software program, or local attorney (see “Steps for Making a Financial Power of Attorney,” below), the resulting POA should automatically incorporate the required language.
Witnessing and Notarizing the POA
To finalize a POA in New York, the document must be:
- witnessed by two people who are not named as agents, and
- signed before a notary public.
In New York, the notary public can act as one of the witnesses; if you go this route, you would need to locate only one additional witness.
Note that New York did not previously require witnessing of POAs, but for new POAs made today, two witnesses are required.
How To Make A New York Power Of Attorney
Here are the basic steps to make your New York power of attorney:
Decide which type of power of attorney to make
Consider a statutory POA for your finances and a healthcare proxy for your healthcare choices if you’re using your POA for estate planning objectives.
Decide who you want to be your agent
Make sure this person is willing to act as your agent by speaking with them in advance. Just because you nominated someone doesn’t mean they had to take the position as your agent. Prior to acting, your agent must also sign your power of attorney (POA) document.
Decide what authority you want to give your agent
What financial or medical decisions do you want them to be responsible for managing on your behalf?
Get a power of attorney form
Complete the form, sign it, and have it witnessed and notarized
Your agent and those who stand to inherit from you upon your passing cannot serve as your witnesses.
Give a Copy to Your Agent or Attorney-in-fact
You should also give a copy of the power of attorney to your agent so that your agent is familiar with the contents of the document.
File a copy with the land records office
You should also register a copy of your POA with the land records office of any county where you own real estate, especially if you checked the box for “real estate transactions” when granting your agent certain powers. If your agent ever has to sell, mortgage, or transfer real estate on your behalf, the land records office will be able to recognize their authority as a result.
Keep your POA updated as your circumstances change.
Every three to five years, you should review your paperwork. All parties that have your old POA on file should receive an updated copy if your POA changes.
When Does My Durable Financial POA Take Effect?
Your durable financial power of attorney becomes effective in New York once you’ve signed it in the presence of witnesses and a notary public, unless you specifically indicate otherwise in the instrument. It is possible to set a requirement that must be met before the POA takes effect, such as a medical professional’s declaration of your incapacity, but this form of “springing” power of attorney is typically not recommended for a number of reasons.
When Does My Financial Power Of Attorney End?
Any power of attorney automatically ends at your death. It also ends if:
- You revoke it. As long as you are mentally competent, you can revoke your document at any time.
- No agent is available. To reduce the likelihood of this happening, you can name a successor (alternate) agent in your document.
- A court invalidates your document. It’s rare, but a court may declare your document invalid if it concludes that you were not mentally competent when you signed it, or that you were the victim of fraud or undue influence.
Additionally, in New York, if your spouse is named as your agent in your POA, that designation automatically ends if you get divorced. To be clear, your ex-spouse’s authority to act as your agent ends, but your POA is still intact. So if you named a successor agent, that person would become your agent instead.
How Much Does It Cost To Get A Power Of Attorney In NYC?
The cost of getting a power of attorney in NYC varies and can range from $100 to $500, depending on the complexity of the document and the fees charged by the attorney. It is best to consult with a local attorney to get a more accurate estimate.
Does A Power Of Attorney Have To Be Filed With The Court In NY?
No, a power of attorney does not have to be filed with the court in New York. A power of attorney is a legal document that gives someone else the authority to act on your behalf. It is typically a private agreement between the person granting the power of attorney (the “principal”) and the person receiving it (the “agent”). However, in certain circumstances, such as if the power of attorney is being used to transfer real property, it may need to be filed with the appropriate government agency.
How Do You Activate A Power Of Attorney?
To activate a power of attorney, the following steps are typically taken:
- Ensure the document is properly executed: The power of attorney must be signed by the person granting the authority (the “principal”) and, if required, witnessed or notarized.
- Provide a copy to the person acting on your behalf (the “agent”): The agent should have a copy of the power of attorney so they can prove they have the authority to act on your behalf.
- Give notice to relevant parties: If the power of attorney is to be used for specific purposes, such as accessing bank accounts, it may be necessary to give notice to relevant parties, such as the bank.
- Use the power of attorney: The agent may then use the power of attorney to carry out the actions specified in the document, such as managing the principal’s financial affairs or making medical decisions.
It’s important to note that the power of attorney only becomes effective when it is signed by the principal and can be revoked at any time by the principal as long as they have capacity to do so.