Effective June 13, 2021, New York will be changing its statutory financial Power of Attorney form. The new statute is a significant improvement compared to the previous statutory power of of attorney law. The new New York Power of Attorney form is more simple than its predecessor and helps to ensure that it will be more widely accepted.
Important Changes to the New York Power of Attorney Form
Some of the more important changes to the NY Statutory POA include:
- There is no longer the need to sign a separate document to allow for gifting;
- If a Power of Attorney substantially complies with the statutory requirements, it will be considered valid (previously, the wording had to precisely match the statute);
- Financial institutions (and most others who receive the POA) must either accept the POA within 10 days or give a written explanation as to why it is being rejected. (They can also request that the agent sign an affidavit that the POA is still in full force and effect.)
Why It is Important to Use the Statutory New York Power of Attorney Form
There are many types of Power of Attorney forms. You will find various versions online and attorneys will frequently have their own versions that they routinely use. However, if you live in New York, it is usually best to use the the statutory POA. The main reason to use the statutory form is that it must be accepted by third parties and financial institutions.
One of the biggest complaints that I’ve received from clients is that banks routinely refuse to honor a financial power of attorney. (I presume they do this because they want people to fill out their own forms.) The new NY law imposes significant penalties on third parties for refusing to accept the statutory form. Accordingly, we recommend that you use the newest form to avoid having to deal with such problems.
Is My Old POA Still Valid?
Yes, if you have an older New York Power of Attorney Form, it is still legally valid. However, these documents tend to become “stale” after about 10 years. To minimize the risk of a bank rejecting your power of attorney, we do recommend that you update it.