Are you going to be unavailable to attend your real estate closing? Will you be going into a complicated surgery and want to ensure someone will be able to act on your behalf? These are common situations in which people execute power of attorney (POA) contracts.
A POA is a legal contract where you, the principal, grant an agent the authority to make decisions on your behalf. A POA creates a “fiduciary relationship” where an agent is bound by law to act in your best interest. You choose the scope of authority given to an agent and you should always take precautions to define this clearly in any POA contract.
Before September 1, 2009, there were different forms a principal would have to execute depending on when he/she wanted the POA to go into effect, the scope of the POA, whether or not it would be revoked if the principal became incapacitated, etc. Now there is one form, the New York Statutory Short Form Power of Attorney, you as principal need to fill out and execute in order to grant a POA. On this form you can modify it in several ways including limiting the agent’s power, controlling when the POA goes into effect and whether it stays in effect in the event you become incapacitated. However, under the NY Statutory Short Form POA, the agent cannot make health care decisions for you. In order for the agent to make such decisions, you and the agent will have to execute a Health Care Proxy.
Usually, in New York, a POA does not need to be recorded with the County Clerk’s office unless it is being utilized in a real estate transaction.
POAs can be a very helpful and effective estate planning tool but they must be drafted carefully and it is crucial that each principal have a clear understanding of his/her rights under the POA.
James G. Dibbini & Associates, P.C., collectively, has over 20 years of experience preparing and executing POA contracts. If you need help with your POA or other areas of life and estate planning, give us a call at (914) 965-1011 or email us at jdibbini@dibbinilaw.com to learn more.
