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10/20/2009"1-800-POA-HELP" Reality and Legislation Collide
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Date: September 2009
Place: A kitchen somewhere in New York State
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MOM: “Son, I asked you to come by today because I heard at the Senior Center that there is a new law in New York about a Power of Attorney. You know what a hard time I’ve been having keeping up with everything. Do you think I need a Power of Attorney? What does this new law mean and how do I get a Power of Attorney if I need one? Do you know?”
SON: “I don’t know Mom. I did hear about that new law and I think there is a phone number we can call that will tell us about this new Power of Attorney. The number is 800-POA HELP. I’ll dial it and we can both listen.”
(SON dials, phone rings and is answered by a pleasant, automated woman’s voice recording.)
Recorded Voice: “Hello! If you are a New York resident, please press One now.”
(SON presses One.)
Recorded voice continues: “Congratulations! As a New York resident, effective September 1, 2009, you have a New Power of Attorney law!! The new Statutory Short Form Power of Attorney, together with the new Statutory Major Gifts Rider, is at least twice as long as the old statutory short form it replaces and if you attach additional riders to the Rider, as you will probably need to do, the short form will be even longer!!! (We try to provide some humor in these recordings but the new form really is called the short form and really is at least 6 pages long and probably longer depending on your answers to the following questions!) Ok, enough frivolity, let’s begin!! To complete the form you just need to answer a few simple questions. Ready? Here we go! You will need to answer the following:
- Who is to be your agent? (This is the person who will act for you.)
- Do you want to name more than one agent?
- If so, do you want them to act together or separately?
- Do you want to name a successor agent?
- Do you want to name more than one successor agent?
- If so, do you want the successor agents to act together or separately?
- Do you have an existing power of attorney?
- Does the existing power of attorney name more than one agent?
- If so, are those agents required to act together or permitted to act separately?
- If you are not revoking your existing power of attorney, do you want the agent or agents named in that power of attorney to act together with your new agent or agents or separately? That is, of course, providing you are giving the same powers to the agents named in both powers of attorney!
- What authority do you want your new agent or agents to have?
- You have a choice of one through fifteen powers that can be initialed on the form, or you can just initial the box that says ‘all of the above.’ Which would you prefer?
- Do you want to modify the statutory short form?
- If so, please provide specific written modification language, but only in the space indicated in the form to do so. DO NOT CHANGE THE FORM!! (Sorry, the legislature was a bit touchy about not changing the form!)
- Do you want to give your agent authority to make gifts on your behalf? (We’ll talk more about gifts later!)
- Do you want to designate a Monitor to oversee the actions of your agent? More than one? Do you want to name successor Monitors?
- Do you want your agent to be compensated?
- If so, how much? From your assets? For what services?
- Do you want your agent to receive reasonable compensation?
- If so, you will need to add language in the modification section and define ‘reasonable compensation’.
- Do you want to give your agent power to make annual exclusion gifts to family members? ($13,000/per person/per year according to current IRS regulations.)
- Do you want to give your agent power to make gifts on your behalf of more than that amount? If so, you will need to provide specific written instructions in a rider to be inserted in the modification section of the Statutory Major Gifts Rider.
- Do you want your agent to be able to make gifts on your behalf that your agent deems reasonable and in your best interest? How do you define ‘your best interest’? If you want to define this term you will need to do so in writing in the rider to be inserted in the modification section of the Statutory Major Gifts Rider.
- Do you want your agent to have authority to make ‘major gifts’ (Defined by the new law as being more than $500/year.) to themselves?
- Do you want to specify what gifts your agent can make to himself or herself? If so, you will need to provide specific instructions in writing in the rider to be inserted in the modification section of the Statutory Major Gifts Rider.
- Do you want to further define your agent’s authority to make gifts? If you want the agent to be able to create, modify or name beneficiaries to accounts for instance, you will need to specify in writing the authority to do so. If so, you will need to provide specific instructions in writing in the rider to be inserted in the modification section of the Statutory Major Gifts Rider.
I hope you jotted all that down!! If you are able to answer all of the above then you are ready to sit down and sign your NEW STATUTORY SHORT FORM POWER OF ATTORNEY AND MAJOR GIFTS RIDER WITH RIDERS ATTACHED STATING MODIFICATIONS TO THE POWER OF ATTORNEY AND/OR TO THE STATUTORY MAJOR GIFTS RIDER!!
First, make sure you have placed your initials in all the right places and have added the necessary language in the modification section of the Statutory Short Form Power of Attorney as well as in the modification section of the Statutory Major Gifts Rider! If that’s all done you’re ready to sign!
As the principal, the person giving the Power of Attorney, you will need to sign the Statutory Short Form Power of Attorney and have your signature acknowledged by a Notary Public in the same form as required to record a deed. Then, simultaneously, you will also need to sign the Statutory Major Gifts Rider. Your signature will again have to be acknowledged by a Notary Public in the same form as required to record a deed. Two persons, who must themselves sign the Statutory Major Gifts Rider in your presence and in the presence of each other, must also witness your signature. Neither of the witnesses can be a recipient of a gift to be made on your behalf by your agent. The requirement that two disinterested persons witness your signature is similar to the formality required to validate the signing of your Will in New York.
OK, now your work is done but you still do not have a valid New York Power of Attorney!
To complete the Power of Attorney form your designated agent must also sign and a Notary Public must acknowledge his or her signature. However, before that can occur, your agent must receive a page long disclosure. This disclosure is required and is intended to advise your agent of the duties, responsibilities and liabilities for which they will now be accountable as your agent. These duties now include the obligation to keep accurate records and provide an accounting to a named Monitor, as well as be subject to possible court order, which could also result in them being held financially liable for failure to keep accurate records and/or to act in your best interest.
After you have the acknowledged signature of your agent, you have created an effective New York Statutory Short Form Power of Attorney with Statutory Major Gifts Rider!! Congratulations!!
One last point, many of our callers ask what happens when your agent actually tries to use the new Statutory Short Form Power of Attorney and Statutory Major Gifts Rider? Well, the agent will give the completed form to a third party (i.e. a bank or broker or financial institution) and will ask them to accept their signature as agent’s on your behalf. The third party, according to the new Power of Attorney law, can refuse to accept the form if they have reasonable cause to do so! The new law provides a lengthy definition of reasonable cause and then authorizes the agent, when faced with a third party who refuses to accept the form without reasonable cause, to obtain a court order compelling the third party to accept the form. However, the third party cannot be held liable for any damages arising out of its unreasonable refusal to accept the form!
Ok! You are all done! Just follow the above instructions and you’ll be all set to go!!!
Thank you for calling 1-800-POA HELP!” (At which time the women’s recorded voice ends and the following disclaimer is played:
“WE ARE NOT RESPONSIBLE FOR WHAT HAS BEEN PROVIDED IN
THIS RECORDING WHICH IS OFFERED AS A PUBLIC SERVICE
FOR GENERAL INFORMATION PURPOSES ONLY.
ALL LAWS ARE SUBJECT TO LEGISLATIVE AND JUDICIAL INTERPRETATION.
YOU MAY CHOOSE TO CONTACT AN ATTORNEY OF
YOUR CHOICE. GOOD LUCK!!”
(Recording ends followed by a disconnecting Click. MOM and SON look at the phone, then at each other.)
MOM: “Well, that certainly clears it right up! Son, can you stay for dinner with Dad and I?”
SON: “Mom, it’s 8:30 in the morning. You just finished breakfast and Dad died last year. Don’t you remember?”
MOM: “ Oh that’s right! Of course I remember! Maybe we should call the attorney that handled Dad’s estate about that Power of Attorney, do you remember the name of the attorney?”
[Please note this is a work of fiction. The phone number “1-800-POA HELP” is purely fictional and does not exist. My hope in writing the above was to provide a simple illustration of the discordant interplay between the new law and real life needs of the New York residents it was intended to benefit and protect. Phillip M. Tribble, Esq.]
If you would like to comment on this piece, please e-mail Attorney Tribble at: ptribble@herzoglaw.com.
