With the uncertainties that we face in life, it is important for one to always be prepared especially in handling finances. Getting a financial power of attorney is vital especially with a trusted agent to secure an individual’s or a family’s financial future.
To get financial power of attorney in New York to manage tasks like check deposits, tax filing, investments, managing bank transaction, or property transactions, create a Power of Attorney (POA) document. A POA grants specific authority to a trusted “agent” or “attorney-in-fact.”
This article will provide a guideline on how to establish a durable financial POA in New York for assistance during incapacity.
What Types of Power of Attorneys Are Available in New York?
In New York, you can create different types of POAs, including:
- Financial POA: Manages financial and business matters.
- Healthcare POA: Makes medical decisions (a “health proxy” in New York).
Usually, these are “durable” POAs, staying effective even if you’re incapacitated. Creating both is advisable for unexpected situations in estate planning.
What Are the Legal Requirements of a Financial POA in New York?
In New York, specific requirements must be met for your POA to be valid.
Mental Capacity for Creating a POA
In New York, the person creating a POA must understand its “nature and consequences” (N.Y. Gen. Oblig. Law §5-1501(2)(c)), but the specifics are subject to court interpretation. If uncertain about mental capacity, consult an estate planning attorney when assisting someone with a POA.
New York mandates specific language in the POA, which is typically included if you use a statutory form, reputable software, or a local attorney to create your POA.
Witnessing and Notarizing the POA
In New York, to complete a POA, it must be:
- Witnessed by two individuals who aren’t agents.
- Signed in the presence of a notary public.
The notary public can serve as one of the witnesses, so you only need to find one additional witness. This witnessing requirement is a recent change in New York law.
Steps for Making a Financial Power of Attorney in New York
1. Create the POA Using a Statutory Form, Software, or Attorney
In New York, you have various options to create a POA:
- Use the state’s statutory form with fillable blanks.
- Try user-friendly software like WillMaker for customized, valid POAs.
- Consult a New York lawyer for a comprehensive estate plan, including a POA.
Regardless of your choice, you’ll select specific powers for your agent, such as real estate, banking, retirement benefits, and more. The default in New York is a durable POA, meaning it remains effective unless stated otherwise in the document.
2. Sign the POA in the Presence of a Notary Public and Two Witnesses
In New York, signing the POA is not enough; you must also notarize it and have it witnessed by two individuals who are not your agents. The notary can be one of the witnesses, so you may only need to locate one additional witness.
3. Store the Original POA in a Safe Place
After creating the POA, keep the original in a secure yet accessible location, and inform your loved ones of its whereabouts. An inaccessible safe won’t help if your attorney-in-fact needs it during your incapacity.
4. Give a Copy to Your Agent or Attorney-in-Fact
You should also give a copy of the power of attorney to your agent so that your agent is familiar with the contents of the document.
5. File a Copy With the Land Records Office
If you granted your agent the power for “real estate transactions,” remember to file a copy of your POA in the land records office of any county where you own real estate. This ensures your agent’s authority is recognized for real estate dealings.
6. Consider Giving a Copy to Financial Institutions
Provide copies of your durable financial POA to relevant institutions, like banks, for smoother future transactions, reducing potential difficulties for your agent.
Who Can Be Named an Agent or Attorney-in-Fact in New York?
You can legally select any capable adult as your agent, but consider factors like trustworthiness and location. While New York permits co-agents, it’s usually best to have a single agent to reduce conflicts. Appointing a “successor” agent as a backup is a wise move.
When Does My Durable Financial POA Take Effect?
In New York, a durable financial power of attorney becomes effective upon your signature, unless stated otherwise. While you can create conditions for it to “spring” into effect, this approach is typically discouraged for various reasons.
When Does My Financial Power of Attorney End?
A power of attorney ends at your death, upon revocation, agent unavailability (resolved with a successor agent), or court invalidation. In New York, if your spouse is named and you get divorced, their authority ceases, but your POA remains intact with the successor agent taking over.
Consulting a New York attorney is advisable to ensure legal compliance when creating a financial power of attorney. Also, have a conversation with your chosen agent to clarify responsibilities and ensure their willingness to accept the role.