A power of attorney is a contract in which you appoint another person, who doesn’t have to be an actual attorney (your “attorney-in-fact” or agent), and grant that person the authority to make legal decisions and transactions on your behalf without additional permission. Under New York law, any mentally competent person (meaning you understand what you are signing) may create a power of attorney.
Having a power of attorney in place is important for every adult because if you become incapacitated, you want to have someone you trust making decisions on your behalf. Without a power of attorney, no one can handle your affairs without going to court in a guardianship proceeding.
Having a durable power of attorney (as well has a health care proxy) in place is particularly important for people who are beginning to show signs of dementia, Alzheimer’s Disease or who suffer severe brain injury due to stroke or other trauma. People in the early stages of dementia/Alzheimer’s most likely still have the capacity to execute a power of attorney. As dementia/Alzheimer’s progresses, the patient becomes increasingly unable to care for himself. Making appropriate legal arrangements before incapacity allows the individual to participate in the decision-making process and to retain a sense of control in life. Not having these arrangements means that others will make decisions for you. That can include having a guardian appointed for you after a guardianship proceeding in a New York court.
Under New York’s General Obligations laws, all powers of attorney are “durable,” meaning they continue even in the event you become incapacitated, although you can include language in the power of attorney that makes it non-durable (terminates it) if you become incapacitated.
Effective Date: You can create a power of attorney that takes effect the day you sign it or in the future when some specific event occurs, such as you lose your eyesight and can no longer pay your bills or otherwise handle financial affairs that require vision. This latter type of power of attorney is called a “springing power of attorney,” as it springs to life in the future.
You can also create a power of attorney for a limited period of time. For example, you might create a power of attorney if you:
Will be out of the country for a long time and need certain transactions done while you are gone; or
Are having major surgery that will temporarily incapacitate you, say for weeks or months, and you need someone to do certain types of transactions during your incapacity.
It is important that you consider the powers you are granting carefully, as well as consider the level of trust you have in your agent. Power of attorney can present a powerful temptation for dishonesty; in the wrong hands, an overly broad power of attorney can leave you the victim of fraud and/or theft.
New York’s General Obligations Law recognizes the following areas as commonly appropriate for a durable power of attorney. You may authorize your agent to make transactions on your behalf in the areas of:
Real estate
Goods
Bonds
Banking
business operations
Insurance
Estates
Claims and litigation
Personal and family maintenance
Benefits from governmental programs or civil or military service
Health care billing and payment matters; records, reports and statements
Retirement-benefits transactions
Tax matters
Your power of attorney is not limited to these areas; New York law specifically provides a catch-all for “all other matters,” which includes any act your agent may do lawfully on your behalf.
Yes, you may limit the agent’s authority to act in any area.
Example: you may give your attorney-in-fact the authority to rent out your home, but exclude the power to sell it.
You can also limit the length of time a power of attorney lasts.
Example: you can authorize a power of attorney to sell your house by a certain date, and then the power of attorney expires whether the house is sold or not.
Yes. You may not give power to your agent to make medical or other health care decisions for you beyond dealing with billing, payment, records, reports and statements. You may make a health care proxy for this purpose.
Yes, as long as you remain competent, you may revoke your power of attorney at any time and for any reason. Your revocation must be in writing and you must notify institutions that rely on your power of attorney (like banks) that you have revoked it. You should also make sure your agent understands you have revoked his or her authority.
Your power of attorney terminates when you die. If you become incapacitated, the power of attorney continues unless you specify that it is not a durable power of attorney.
Your power of attorney terminates if your agent dies or becomes incapacitated. In addition, if your agent is your spouse, the power of attorney terminates if you get divorced.
You need only to have the ability to comprehend the nature and consequences of your action. That means, for example, that someone in the early stages of Alzheimer’s disease or other dementia, or someone who has had a stroke with resultant brain damage may be able to execute, modify, or revoke a power of attorney. Capacity depends on the particular circumstances of each case.
