When you trust someone with power of attorney (POA), you are giving them the authority to act on your behalf in legal and financial matters. It goes without saying that the person to whom you grant POA should be someone you trust to act in your best interests, especially when you are not able to make critical decisions. However, because the POA is such a ubiquitous form – particularly when it comes to elder law – people often mistakenly think that it is simple to complete. In fact, the POA is not so simple, and missteps in completing yours correctly, or failing to keep it up-to-date, can lead to problems down the road.

I encourage everyone to be proactive with a lawyer when it comes to keeping your key legal documents current. The POA form may seem simple, but an outdated one can leave people hamstrung should time-sensitive financial situations arise.

Best practice: Make sure your POA is current.

Check in with a lawyer. Resist using online services that say they can “walk you through the simple process step by step” and, while friends certainly mean well, it is always more prudent to have a lawyer who specializes in the field be your guide to filing a well-executed POA. Online forms are often outdated or incomplete, and not everyone who practices law stays up-to-date on these specific topics.

You might save some money, but at what expense? Living life on your terms, in your home, for as long as possible does not happen by accident or without the assistance of someone with plenty of experience in helping people do so. The only way to be sure you have a POA detailed to accomplish your goals, is to work it out with an experienced elder law attorney.

Consumer-friendly change is coming.

Good news is that on December 15, 2020, Governor Cuomo signed into law a bill regarding the state’s POA form – changes that make the POA more consumer friendly and simpler to obtain. There are important changes around statutory gifting that people overseeing estate plans and Medicaid should understand. Gifts and the ability to transfer wealth figure prominently into Medicaid planning, yet most POAs done by non-lawyers, and often even lawyers without the right experience, fail to include gifting authority.

One change to the POA, which will take effect in summer 2021, is an increase of allowable statutory gifts from the previous max of $500 per year to $5,000. The elimination of the former statutory gifts rider (SGR) is a very consumer-forward move. The capacity to authorize larger gifts helps agents protect a greater amount of an individual’s assets, while helping them meet the eligibility requirement to receive Medicaid.

This is a great change that adds additional weight to the general POA, and one that I recommend making a central part of your POA discussion with an attorney.

More updates to New York’s power of attorney.

A few other key changes to the POA that are coming up this summer include:

• Substantial, rather than strict, compliance will be applied to such things as spelling and punctuation errors, inexact wording, or formatting inconsistencies, which used to be enough to invalidate a POA. Now, minor mistakes on a POA form will no longer render it invalid.
• If an entity, such as a bank, rejects a POA and that rejection is deemed unreasonable in court, both attorney’s fees and damages may be awarded.
• Rejections must be done within 10 days, in writing, and can be appealed. The rejecting institution then has seven days to render a final decision. This is another consumer-forward move, in that it removes the potential for institutions to reject POAs outright, a practice that formerly led to serious financial concerns for many individuals.

Outdated does not mean invalidated. But, come in anyway.

Just because your POA may not be current does not necessarily mean it is invalid, especially considering these changes by the state. However, because assigning POA is such an important life decision and crucial planning step, I suggest periodically scheduling a review by a qualified attorney. This goes double for anyone moving from one state to another, just to be sure state-specific wording is used.

At DuBois Law Group, you can trust us to walk you through the process of assigning power of attorney and executing the official documents. Lean on our expertise and experience in elder law to give you the peace of mind that comes along with having a sound plan for your future. We are here to help and look forward to hearing from you.