Powers of Attorney in New York State
Having a power of attorney allows an individual to select a trusted family member or friend to assist them with or to handle outright their financial affairs, such as banking and paying bills, and other important matters, such as Medicaid planning. Like with a will and a health care proxy, it is advisable to plan for the future before an emergency arises. The individual signing the power of attorney document must be aware that the financial powers being granted to the agent in the document may go into force immediately upon signing the document and the agent would have access to the princicpal's resources.
New York State changed its law regarding powers of attorney, effective September 1, 2009. POAs signed before that date are still in effect. However, the new law made the document itself and the signing of it more complex. Now, not only must the principal sign the document, but the agent or agents must sign it as well before it becomes effective. In addition, if the principal wants to allow the agent to make any significant gifts or transfers of principal's assets (more than $500 annually), the principal must sign a second document, called a major gift rider, in front of two witnesses and a notary public. Both the POA and the major gift rider may be modified to include specific powers tailored to the needs of the principal.
If an individual wants to sign a Power of Attorney document, but is reluctant to have the document go into effect immediately, they can sign a Springing Power of Attorney. A Springing POA goes into effect -- or springs into effect -- upon a doctor certifying that the principal is no longer competent to manage their own affairs.
As an elder law attorney, I routinely draft powers of attorney documents that allow for advanced estate and Medicaid planning if the senior loses competency.
A POA is a powerful document that grants authority to the agent to access the individual's assets. The individual must understand this and have the utmost confidence in the agent before signing the document.
It is important to keep in mind that when a health care emergency arises, it may be too late to draft a will, a health care proxy and a power of attorney. It is best to plan for the future before an emergency occurs.