Power of Attorney
A power of attorney is a powerful contract in which you give another person or persons (not necessarily, and most often not, an attorney) the authority to make legal and financial decisions for you. The person you give the power of attorney to is called your “agent.” Under New York law, any mentally competent person may create a power of attorney. You can also name a “successor agent” who can step in if your first choice agent is unavailable for any reason.
Benefits and Dangers of a Power of Attorney
Having a power of attorney in place is important for every adult because, if you become incapacitated, you need someone you trust making financial and legal decisions for you. Without a power of attorney, no one can handle your affairs without going to court to be named your guardian and you will have no say as to who that person is. Making important legal plans before incapacity gives you control over who will manage your affairs if you are ever unable to do so for any reason.
Having a power of attorney (and a health care proxy) in place is crucial for those starting to show signs of dementia, Alzheimer’s, or any other mentally and physically debilitating disease. In the early stages of dementia, patients will often still have the mental capacity to sign a power of attorney, but as the dementia progresses, may lose that capacity.
By far, the most common power of attorney in New York law is a “durable power of attorney.” This means the power of attorney is effective the day you sign it, but that power continues even if you become incapacitated. You can attach conditions, such as a triggering or terminating date or event, but for almost everyone, the durable power of attorney is the best option.
On the New York State power of attorney form you may also choose to include a rider which allows your agent to give gifts or support checks to themselves or other people you decide. This gifting ability often makes sense for committed couples or if children or others are reliant upon your financial support. This, of course, give the agent enormous power for good or evil over your assets and estate, so reflect carefully and discuss with your attorney the scope of your agent’s gifting power.
One safeguard against dishonest agents in New York State’s power of attorney is that it allows you to appoint a monitor who can request records of your accounts from your agent to guard against abuse or theft.
In sum, a power of attorney, especially one where gifting power is granted, is an extremely powerful document which can help you and your family enormously in the event of your incapacity, but could also potentially be abused to take your money and assets from you.
Legal Editor: David A. Caraway, March 2015
Changes may occur in this area of law. The information provided is brought to you as a public service with the help and assistance of volunteer legal editors, and is intended to help you better understand the law in general. It is not intended to be legal advice regarding your particular problem or to substitute for the advice of a lawyer.