New York has a new Power of Attorney law. The state legislature amended the General Obligations Law to provide an entirely new form with new execution requirements for powers of attorney that goes into effect on September 1, 2009.
A Power of Attorney is a document that appoints another person (the agent) to act on behalf of someone (the principal) in certain enumerated areas. A Durable Power of Attorney remains valid even if the principal becomes incapacitated. This is ideal for estate planning and elder care. It allows a trusted person to take care of the principal’s affairs without a long and costly guardianship proceeding.
The new law creates a new form, new execution requirements and new powers. Most importantly, the new form requires that both the principal and the agent sign the form and that their signatures be notarized. They do not have to sign at the same time, but the form is not valid until both have signed.
If the principal wants the agent to have the power to make major gifts he must execute a separate Statutory Major Gift Rider (SMGR). A principal may want this to continue a plan of gift giving for estate planning and estate tax reduction.
Acceptance of the form is mandatory. In the past many institutions like banks and brokerages had their own forms that they insisted on. They cannot require that anymore and must accept the new form.
The new form is durable unless otherwise indicated on the form.
This new POA law provides some protections to the principal from abuses by the agent. It imposes a fiduciary relationship on the agent which carries a much stronger requirement of honesty on behalf of the agent. There are also rules regarding increased reporting and accounting by the agent.
While older powers of attorney will remain valid, they will lack some of the more exacting features of the new forms. We strongly urge our clients to review all powers they may have and we will be pleased to assist you in determining whether a new form is necessary.
Showing posts with label Power. Show all posts
Showing posts with label Power. Show all posts
Thursday, May 28, 2009
Monday, May 18, 2009
Estate Planning Essentials
Basic documents for Estate Planning.
There are five basic documents everyone should have for their estate plan. You don’t need to be rich to need to plan for what happens to your property after you are gone.
First and foremost is the Last Will and Testament. Your Will states what you want to happen to your property when you die. If you don’t have a will, New York State decides what happens and in all likelihood, it will not be what you want. If you want to see the state statute see EPTL 4-1.1 A will can be as simple as leaving everything to your spouse or as complex as you can imagine. The important thing is to have a will.
We have often been asked if the will kits you can buy in the store or online will work. Yes, they may work if you follow all the rules New York requires for the proper form and execution of a will. If you do it wrong, the court will reject it and your estate will be distributed according to the NYS intestacy rules shown above. In addition, you are missing out on the knowledge of an attorney who knows the legal and tax implications of various ways to distribute your assets.
Next is the Health Care Proxy. The Health Care Proxy appoints someone to make health care decisions for you if you become unable to make those decisions. Other states may refer to this as a Health Care Power of Attorney, don’t be confused, in New York it is call a Health Care Proxy. You should discuss with your Proxy your wishes and desires as to what sort of care and treatment you want. The Health Care Proxy should be given to your doctor so it can be kept in your chart available for the future.
A document that coordinates with the Health Care Proxy is a HIPAA Release. HIPAA is a federal law which prohibits your doctor from giving access to your medical records to anyone unless they have your permission. A HIPAA Release will allow your doctor to share your medical records with your Health Care Proxy and make it easier for them to make care decisions
Working along with the Health Care Proxy is the Living Will. The Living Will gives instructions to your doctor and Health Care Proxy on end of life decisions. It states whether you want life support and if so, to what extent. It is important that you discuss this with your Proxy and make sure they are comfortable with carrying out your wishes.
Finally there is a Durable Power of Attorney. A Power of Attorney appoints someone to act on your behalf for things like bank accounts, paying bills, dealing with legal matters. It is a very important tool should you become unable to make decisions or if you need help with day to day chores. It goes without saying that you need to appoint someone you trust implicitly since they will have your authority in advance to manage your property. The New York State law regarding Power of Attorney will change effective September 1, 2009. More about the change in a future blawg entry.
There are five basic documents everyone should have for their estate plan. You don’t need to be rich to need to plan for what happens to your property after you are gone.
First and foremost is the Last Will and Testament. Your Will states what you want to happen to your property when you die. If you don’t have a will, New York State decides what happens and in all likelihood, it will not be what you want. If you want to see the state statute see EPTL 4-1.1 A will can be as simple as leaving everything to your spouse or as complex as you can imagine. The important thing is to have a will.
We have often been asked if the will kits you can buy in the store or online will work. Yes, they may work if you follow all the rules New York requires for the proper form and execution of a will. If you do it wrong, the court will reject it and your estate will be distributed according to the NYS intestacy rules shown above. In addition, you are missing out on the knowledge of an attorney who knows the legal and tax implications of various ways to distribute your assets.
Next is the Health Care Proxy. The Health Care Proxy appoints someone to make health care decisions for you if you become unable to make those decisions. Other states may refer to this as a Health Care Power of Attorney, don’t be confused, in New York it is call a Health Care Proxy. You should discuss with your Proxy your wishes and desires as to what sort of care and treatment you want. The Health Care Proxy should be given to your doctor so it can be kept in your chart available for the future.
A document that coordinates with the Health Care Proxy is a HIPAA Release. HIPAA is a federal law which prohibits your doctor from giving access to your medical records to anyone unless they have your permission. A HIPAA Release will allow your doctor to share your medical records with your Health Care Proxy and make it easier for them to make care decisions
Working along with the Health Care Proxy is the Living Will. The Living Will gives instructions to your doctor and Health Care Proxy on end of life decisions. It states whether you want life support and if so, to what extent. It is important that you discuss this with your Proxy and make sure they are comfortable with carrying out your wishes.
Finally there is a Durable Power of Attorney. A Power of Attorney appoints someone to act on your behalf for things like bank accounts, paying bills, dealing with legal matters. It is a very important tool should you become unable to make decisions or if you need help with day to day chores. It goes without saying that you need to appoint someone you trust implicitly since they will have your authority in advance to manage your property. The New York State law regarding Power of Attorney will change effective September 1, 2009. More about the change in a future blawg entry.
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