Understanding The Power Of Attorney
Article by Nancy C. L. Stein, Esq., Staff Writer, PR4Lawyers
A durable power of attorney is an important and powerful planning tool for estate planning and should include consideration and inclusion of Medicaid and other entitlement programs. The person who assigns the right using the power of attorney is the principal. By signing a power of attorney, you are giving another person the power to act on your behalf to manage your assets and affairs. You can assign this agent virtually all powers to perform on your behalf except acts that are testamentary in nature, like the authority to make or revoke your will. New York further limits the power of attorney, requiring a separate healthcare power of attorney or healthcare proxy power to make healthcare decisions on your behalf.
The focus of the power of attorney in New York is on assigning the right and power to make financial decisions on your behalf. While it cannot be used for healthcare decisions, the durable power of attorney can enable the agent to make property management decisions that can free up funds needed for the principals medical care and treatment.
A “general” power of attorney is very broad, enabling the agent to perform almost any act you might perform with respect to the financial management of your affairs. A “limited” power of attorney allows the agent one or more specific powers, such as the power to handle the sale or rental of a particular property.
Note that you can name one or more agents to act either “jointly” (together) or “severally” (alone without the signature of the other agents).
While a power of attorney can be limited to specific acts and a set time period, a “durable” power of attorney remains in effect upon the disability or incapacity of the principal and is not be subject to time limitations. The durable power of attorney offers the benefit of enabling the agent to act immediately to manage the principal assets or to take action without the delay and cost of obtaining court authorization.
It is important to clearly and specifically draft a power of attorney to avoid any omissions or the grant of broader powers than intended.
In 2010, New York significantly revised its power of attorney law, providing a new power of attorney form called the statutory form. While the law continues to allow the use of other power of attorney forms and recognizes their legality and the validity of existing powers of attorney, it is a good idea to use the new statutory form and update your existing power of attorney. Banks, investment companies and other institutions are familiar with this form and it is widely accepted. Using it will avoid confusion and delays.