5 Considerations for Power of Attorney Compliance in New York
Having a Long-Term Plan: Why a Durable Power of Attorney Can Bring Peace of Mind2 min read
Having a durable power of attorney (DPOA) in place can provide peace of mind to individuals who need support managing their financial affairs and healthcare decisions. While DPOAs are far from uncommon, understanding the legal requirements and complexities of setting up a DPOA in New York State can be challenging. For those in New York who are considering having a DPOA, there are five important angles to consider.
First, it is important to understand what a DPOA is and how it differs from an ordinary power of attorney (POA). A DPOA is an agreement between two parties, the 'principal' and the 'agent', which sets out the rights and responsibilities of both parties and the scope of power the agent will have during the principal's lifetime. In contrast, an ordinary POA has a more limited scope and is set to terminate upon the death of the principal.
Second, New York law requires that any power of attorney document must identify the roles of both the principal and the agent; outline the scope of the agent’s powers; provide instructions for how the agent is to act on the principal’s behalf; and be accompanied by either a confidentiality or an attorney-in-fact agreement. Additionally, DPOA's must be properly signed, executed and notarized in order to be legally valid.
Third, familiarizing oneself with the New York State Mental Hygiene Law (NYS MHL) is essential. The statute provides clarity on the general rules governing who can act as an agent under a DPOA, the duties the agent is expected to perform, and how to go about revoking, replacing, or contesting a DPOA.
Fourth, it is recommended that all DPOAs include a provision that allows the principal to add, remove, or modify any of the provisions of the document. This will insure that the principal's wishes are accurately reflected and are up to date as circumstances in his or her life evolve.
Finally, it is important to make sure the DPOA is properly funded. Depending on the scope and nature of the powers granted, the agent may need access to the principal’s financial assets or the ability to manage the principal’s investments. To ensure that the agent has full access to these assets and investments, the DPOA should be properly set up and funded within the principal’s estate plan.
A DPOA that adheres to all state and local requirements is essential for an individual in New York who needs assistance in managing his or her financial affairs and healthcare decisions. However, the legal complexities involved in setting up a DPOA in New York are considerable and require specialized legal counsel. To ensure that all the steps are properly taken, individuals should turn to a knowledgeable attorney to avoid compliance issues.
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