The 2021 New York Statutory Power of
Davies Law Firm,
What is the
Beginning on June 13, 2021, Power of Attorney forms should
follow the new statutory form and are subject to the new rules regarding execution and
formatting. Powers of Attorney signed before June 13, 2021,
using the old form, are still valid. They are not required to
follow the new execution and formatting standards.
What is a New York
Power of Attorney?
Generally, a Power of Attorney (POA) allows one person (a
principal) to appoint someone else (an agent) to handle his or her personal and financial
affairs. Powers of Attorney in New York can be statutory or
A statutory POA follows the form outlined in the New York
General Obligations Law Section 5-1513 (the statutory form). A
non-statutory POA does not meet the requirements of Section 5-1513 and will not receive all the enforcement
protections discussed under “Recognition and Enforcement of the Agent’s Authority” below. The law has been amended to state that a POA may follow the statutory form, but
does not have to follow the statutory form, to be considered a valid and effective POA.
Recommendation: If possible, follow the statutory form.
Deviations from the statutory form will only create headaches for third parties asked to accept an
agent’s authority and as a
result, may not be accepted.
Validity of the
Power of Attorney vs. Proper Exercise of the Agent’s Authority
The validity of the POA is a separate concept from the
authority granted by the POA. Validity determines whether a third
party is required to accept the document. It gets the agent in the
door and grants them the ability to work with the principal’s assets.
Proper witnessing and notarization, as well as following the new substantial compliance standard discussed below,
makes a statutory POA valid.
Proper exercise of the agent’s authority determines whether
the agent’s actions are authorized under a valid POA. If an agent is
able to use the principal’s assets in a way that was not allowed by the POA, the action may not be legally
recognized, and the agent may be liable to the principal for misuse of his or her authority as
Example: Jim signs a POA before a Notary and two
witnesses naming his daughter Sally as the agent. The POA meets the
written requirements of Section 5-1513. It is a valid
POA. Sally takes the POA to a local bank where Jim has a
checking account and presents it to a bank officer. The bank
officer creates new signature cards for the account and marks that Sally is an agent under the
POA. Sally now has authority over the account with the ability
to sign checks.
Two months later, Sally writes a check from Jim’s account
in the amount of $16,000.00 to George, who is a longtime friend of Jim, to buy a boat. The POA does not contain language giving an agent the right to make gifts from
Although the POA gave Sally the power to write the check
and transfer the funds, she misused her authority because the POA did not give her the power to make
gifts. Sally will be liable to Jim for the amount of the
The Demise of the
Exact Language Requirement (NY GOL §5-1501(n) & §5-1501B(2))
Under the previous law, POA’s had to follow the statutory form down to a
specific font and font size to be considered a valid statutory POA.
This was known as the exact language requirement. Following the exact
language requirement was important because a statutory POA granted extensive powers to agents as provided in state
law, without specification of those powers required in the actual document signed by the
principal. In addition, a statutory POA was enforceable by the
agent if a third party refused to accept the agent’s authority.
companies refused to recognize an agent’s authority when the POA did not mirror the statutory form, causing huge
inconvenience and expense if the principal was unable to sign a new POA, and possibly creating the need for a
Under the new law, statutory POA’s must substantially conform to the format
provided in section 5-1513 (the statutory form) to be valid. A
document will substantially conform (and be a valid statutory POA) despite the following differences from the
1. Deleting portions of the statutory form that are optional and
replacing them with the words “Intentionally
Optional sections include (1) designating successor
agents, (2) modifications, (3) designation of monitors, and (4) certain gift transactions.
2. Insignificant mistakes in wording, spelling, punctuation, or
3. Using bold or italicized fonts.
4. Differences in phrasing or language from the statutory
5. Deleting clauses present in the statutory
6. Insubstantial variation in the “Caution to the Principal” and “Important
Information for the Agent” sections.
Recommendation: Although highly modified POAs going
forward will still be valid, drafters should continue using the statutory form and make all changes under
“modifications”. Instead of deleting the optional sections, writing “Not Applicable” under each
section serves the same purpose and will not cause third parties to wonder why the section is missing from the
document and question the agent’s authority.
Updates to the Statutory
The new law changed the wording of the statutory POA, the
authority granted by the document, and even changed the execution requirements for a valid POA.
Agent’s Ability to Act (NY GOL §5-1502D & NY GOL §5-1513)
old statutory POA, when a principal appointed more than one agent, the default rule was that they had to act
together. This meant the agent’s both had to agree to any action taken on
behalf of the principal. To allow agents to act separately, the
principal initialed a line that stated, “My successor agents may act SEPARATELY.”
The default rule has not changed. If the principal appoints more than one agent and does not initial the line that
allows them to act separately, the agents must both agree to any action taken on behalf of the principal. However,
a new line has been added to the statutory POA where the principal may initial a line that states that his or her
agents must act together, which is redundant.
The same lines are present for successor
agents. If the principal wishes to designate successor agents,
he or she should also decide whether these agents must act together or may act
Even if the principal requires agents to act together (or
does not initial either option), the agents may agree among themselves to have just one person take care of banking
transactions if the power to delegate is initialed on the statutory POA under section (o) on the list of powers.
The previous law included section (o) on the statutory form, but there was no corresponding grant of authority in
the law. This has been updated and subsection (o) is now present in
Recommendation: Make sure the principal decides whether
to have the agents act together or separately and initials the appropriate line. Although the default rule requires
agents to act together, the less interpretation required of third parties, the more likely a POA will be accepted
Health Care Finances (NY GOL
The statutory form and the authority granted to agents regarding health care finances
have been updated. Under the old law, an agent had the authority to
access records and decide whether to pay the principal’s medical
The new law grants more expansive authority over matters
relating to the principal’s
health care, including the authority to:
1. Receive protected health information from health care providers
and health plans, and to use this information to verify the legitimacy and accuracy
a. The principal’s payment obligations
b. The principal’s entitlement to
2. Pay the principal’s medical and other health care
3. Act as the principal’s personal representative in health care
matters (the authority to make health care decisions is excluded)
Removal of the Statutory Gifts Rider (NY GOL §5-1514) -
The Statutory Gifts Rider (SGR) has been repealed. All gifting authority must now be included under the modifications section of the
new POA. The
modifications required to the Statutory POA for estate planning or government benefit planning goals is covered in
‘Modifying the Statutory Power of Attorney” below.
The effects of this change are far
reaching. The SGR was a separate document that had to be
executed under stricter formalities than the statutory POA (two witnesses were required). While it was more complicated to complete than the statutory POA, the SGR
required the principal to confront the fact that he or she was granting the agent gifting powers that could
decrease or deplete the principal’s estate. It is possible including gifting powers only under the modification’s
section will make it easier for an unscrupulous agent to obtain gifting powers without the principal’s
Personal and Family Maintenance (NY GOL
The gifting authority granted under
“personal and family
maintenance” has been increased to $5,000 from $500. As with the
old law, the ability to make gifts under this section only applies if the principal was making these gifts
before the agent stepped in.
Execution of the Power of Attorney (NY GOL
With the many other changes to the statutory POA, the formalities for execution of a
POA have changed:
1. Previously the principal’s signature on a POA only had to be
notarized. On the new statutory POA, the principal’s signature will
also require two disinterested witnesses. A disinterested witness must be someone who (1) is not named as an agent
in the POA, and (2) is not eligible to receive gifts under the POA.
2. A third party is now
allowed to sign the principal’s name on his or her behalf. The third party
cannot be named as an agent on the POA, and the person signing must have his or her signature acknowledged before a
notary. The principal’s name must be printed or written, with the person signing adding his or her name
The principal must be physically present when the person
signs the POA on behalf of the principal. There is no provision for
e-signing or other remote procedures.
Recommendation: A third party
signature for the principal should be a last resort. If the principal
can sign, even if the signature is shaky and illegible, he or she should do so. A third party can help steady the principal’s hand or provide other support to make sure
the principal signs the document. Like following the statutory form
whenever possible, having the principal sign the POA makes it more likely that a third party will accept the POA
without court involvement.
Recognition and Enforcement of an
The new laws have strengthened the procedures for
enforcement of a valid statutory POA. There are also new provisions
that encourage third parties to accept a statutory POA without court intervention. To encourage acceptance of a valid statutory POA, the new law provides that a
third party may rely upon:
1. A good faith
belief that the POA was properly signed and is valid;
2. An Agent’s Certification under penalty of
perjury of any factual matter concerning the principal, agent, or power of attorney;
3. An opinion of counsel (licensed
attorney) as to any matter of law concerning the power of attorney if the person making the request provides in
a writing or other record the reason for the request.
The Good Faith
Acceptance Standard (NY GOL §§5-1504(1)(b),(c))
Third parties have been given liability protection if they
accept in good faith a statutory POA that is later found to be deficient in any of the following
1. An invalid signature by the
2. The POA is void, invalid, or
has been terminated
The agent is using his or her authority in manners not authorized by
To accept a POA in good faith, the third party must have no
actual knowledge of the above deficiencies.
Agent’s Certification and Opinion of Counsel (NY GOL
If a third party has concerns about accepting a POA, they
may request a certification from the agent regarding the facts about the principal, agent, or the
They may also request an opinion of counsel (a licensed
attorney) regarding any matter of law concerning the power of attorney. The request for an opinion of counsel must set forth the reason for the
request. If the agent refuses to provide the certification, or the
opinion of counsel, the third party may refuse to accept the POA without penalty.
It is unclear based on the legislation what facts the third
party would need to verify. The certification might be related to the
agent’s knowledge of the
principal’s capacity or incapacity, and the agent’s assertion that the POA is in full force and effect. However,
the law already provides a separate acknowledgement procedure to deal with whether the agent certifies that he or
she is able to act as agent.
The opinion of counsel is not designed to verify facts,
only matters of law. This means an opinion of counsel will likely be
required where the third party is unsure of whether the document was validly executed, or if certain actions may be
taken by the agent, like the ability to make gifts using the principal’s assets.
The New York State Bar Association provided a model form
for the previous POA, along with suggested modifications. It is likely
that when a model form for the new law comes out, sample or suggested agent certifications and
opinions of counsel will be
provided in addition to the new statutory form.
The Procedure for
Accepting or Rejecting a Power of Attorney (NY GOL §5-1504(3))
The new law provides a structure for third parties to
accept or reject a POA. Here are the steps:
1. The agent presents the
statutory POA to the third party - Either the original POA, or an attorney certified copy, or a County Clerk
Certified copy, must be presented. Failure to present the original
or an attorney certified POA is a valid reason to refuse to accept the agent’s authority.
2. Within ten business days,
the third party must either accept, reject, or request a full force and effect affidavit from the
agent. A rejection must include the reason(s) for the rejection.
At this stage, the third party may also request an opinion of counsel or the agent’s certification of factual matters.
3. If the
third party rejects the POA, the agent may submit a response, and within seven business days of receipt of the
response, the third party must make a final decision to accept or reject the POA.
4. If the third party requests
a full force and effect affidavit from the agent, once the agent provides the affidavit, the
agent’s authority must
be recognized within seven business days, or refused again in writing, listing the reason(s) for
Enforcing the Power
of Attorney after a Refusal (NY GOL §5-1510(2)(i))
When a third party refuses to recognize an
agent’s authority, the
remedy is to begin a Special Proceeding in Supreme Court. The
proceeding allows the agent (and other groups of people if needed) to obtain Court review of the third party’s
refusal to accept the statutory POA. The Court may order the third
party to accept the agent’s authority if the statutory POA is valid.
Additionally, under the new law, attorney’s fees and other expenses of the special proceeding may be awarded to the
agent and his or her counsel if the third party’s refusal to accept the POA is unreasonable. NY GOL §5-1504(2)(a)
provides a list of “reasonable cause[s]” to refuse the agent’s authority.
By including the ability of the court to award
attorney’s fees, it may
encourage attorneys to litigate these matters when refusal to accept the agent’s authority is clearly
unreasonable. As there was no monetary reward for gaining acceptance
of the POA under the old law, an attorney would require a retainer to bring the special proceeding, and agents
short on funds may have simply given up instead of pursuing the issue.
Many agents wait to present the POA to a third party until
after the principal is incapacitated. Refusal to accept the
agent’s authority means the
principal’s bills cannot be paid, the agent may not be able to apply for government benefits, and other financial
issues lie dormant. Giving the special proceeding “teeth” is a
Recommendation: If an agent has a current POA, it is a good idea to present the bank or other financial
institution with the document while the principal still has capacity.
When drafting a statutory POA under the new law, drafters need to include any modifications that would be
helpful for the client’s goals. Here are a few of the most common
1. Immediate Authority or Authority in the Future? - One of the most common
modifications to a POA is to require some event to happen before the agent’s authority begins. This could be a certain date, a certain event, or most commonly, the
incapacity of the principal. The trigger mechanism can be any
procedure the client and drafter want to use.
2. Durability - The default
rule is that a POA continues to be valid after the incapacity of the Principal. If the principal wants the agent’s authority to end if the principal
becomes incapacitated, this should be included in the modification’s sections.
3. Compensation - A statutory POA with no modification no
longer provides compensation for agents. This means
“reasonable compensation” must
be defined in the modifications section, and the POA must also state that the principal wishes the agent to be
compensated for his or her actions as agent. Compensation could be
defined through reference to New York executor’s commissions, New York Trustee Commissions, an hourly or flat
rate, or any other system the principal wants to use.
Revocation of previous POAs - When executing a new POA,
most principals want to revoke previous POA’s they signed. This must be included in the modifications section. See the below section regarding revocation which goes into detail on the
mechanics of revoking an agent’s authority.
Using the Power of
Attorney for Estate and Incapacity Planning
Under the new law, a statutory POA with no modifications
will not be useful for estate and incapacity planning. Previously, the
Statutory Gifts Rider provided some limited gifting options without modification of the document. Now, all gifting abilities must be granted within the modification section of the
document. The following is a list of some of the modifications that
should be added if the POA is to be used as a general estate planning and incapacity planning
1. Addition or removal of a joint account owner from the
2. Addition or removal of Totten Trust beneficiary designations,
also known as payable on death accounts
3. Modification of beneficiary designations on brokerage accounts
and other financial accounts
4. Gifting - To provide flexibility, the gifting provisions should
be broadly worded. They might include:
a. Transfer of Property, real, tangible, and intangible, for income
and transfer tax planning, Medicaid planning, or other planning that qualifies the principal for any other
b. Creation and funding of trusts
c. Gifts in any amount from the agent to him or herself
d. Gifts in any amount to family members
e. Whether all transfers must be in the best interest of the
principal - Is it in the best interests of the principal to qualify for Medicaid if his or her assets could
be used for placement in a private pay facility instead? Make sure to define the goals of any gifting program
if the principal does not want the agent to be unrestricted when making gifts.
5. Anything else the drafter can think of that would be
relevant. The more specific the wording, the more likely it is
that an action will be allowed without further investigation
Revocation of the Power of Attorney (NY GOL § 5-1511)
What if somebody comes to you and
wants to revoke a POA they signed previously?
A principal may revoke his or her
POA by delivering written notice of the revocation to the agent.
This notice must be signed and dated to be effective if (1) delivered by a third person, (2) mailed, (3)
emailed, or (4) faxed. Absent Article 81 Guardianship, a properly
executed revocation is effective even if the principal is incompetent.
If the Power of Attorney has been
recorded with the county clerk, the revocation must also be recorded.
Third parties may continue to accept
a revoked power of attorney without liability until the principal notifies that third party. This means that if the agent has been working with financial institutions, the
principal must make sure to notify each institution in writing that the former agent’s authority is now
revoked. Further, the principal must make sure to get back the
original POA from the agent to stop further use without the principal’s consent.
Revoking the Power of Attorney
Did the principal deliver the revocation to the agent?
If delivered by any manner other than the principal handing it to the agent, is the
revocation signed and dated? (Third Party hand delivered, mailed, faxed, or
Has the principal notified third parties he or she knows were dealing with the agent
under the power of attorney of the revocation?
Has the principal taken back the signed original power of attorney
If the original Power of Attorney was recorded, was the revocation also recorded
with the same County Clerk?
What if you are given a Power
of Attorney and asked to accept the agent’s authority?
Even if the POA does not follow
the statutory form, you can still agree to the agent’s authority.
Non-statutory POA agency relationships are created all the time for specific purposes (real estate agent contracts
come to mind). The POA law is designed to prevent the third party from
denying the agent’s authority, not to stop the third party from accepting the agent’s authority unless the forms
are completed perfectly.
However, what if you do not
want to accept the agent’s authority? Use the following chart to
determine whether denying the agent’s authority will end with you paying the agent’s attorney’s fees. If the answer
to any of these questions is no, you do not have to accept the POA, and should follow the procedure for rejecting a
POA outlined on page 6.
Is the Power of Attorney Valid?
Has the agent presented the original or an attorney certified power of
Is the power of attorney legible and the writing at least as large as the font used
for this checklist?
Is it signed by the principal in front of a Notary Public with the proper
acknowledgement language and Notary signature?
Have two witnesses attested that the document was signed in front of
them? It is ok if one of the witnesses is also the
Is it signed by the Agent asserting authority in front of a Notary Public with the
proper acknowledgement language and Notary signature?
Does the Power of Attorney include the “Caution to the Principal Warning” somewhere
in the document?
Does the Power of Attorney include the “Important Information for the Agent”
language somewhere in the document?
the Modifications Section
: Is this Power of Attorney currently in force? (It
may not be in effect until a future event occurs, or if not durable, is no longer effective if the
Principal is incompetent)
Has the principal initialed the specific grant of authority the agent is attempting
to use? Or, has the principal initialed the final line
authorizing all powers?
Has the Power of Attorney been altered using white out, cross outs, or
If the answer
to all the above questions, other than the final question, which should be no, is yes, it is likely that the agent
has a valid statutory POA. If there is a question about the agent’s
authority to take a particular action, you can request and rely on an opinion of counsel regarding the extent of
the agent’s authority. You will not be held liable for improper
actions by the agent if this procedure is followed.
When is it reasonable to reject a valid Power of
Attorney? (NY GOL §5-1504(2))
The following list provides some reasons you can reject a
valid POA and will not be responsible for the agent’s attorney’s fees:
1. The agent did not show you
the original power of attorney or an attorney certified copy of the power of attorney.
You make a report to adult protective services
about the principal and agent, or you know there has been a report to adult protective services about
abuse, neglect, exploitation, or abandonment of the principal by the agent or people working with the
3. You know or
have a reasonable basis to suspect that the principal died. A POA
is only valid while the principal is alive.
4. You know or
have a reasonable basis to suspect that the principal is currently incapacitated and the POA is
5. You know or
have a reasonable basis to suspect that the principal was incapacitated when he or she executed the power of
6. You know or
have a reasonable basis to suspect that the principal executed the POA due to fraud, duress, or undue
7. You received
notice of the termination or revocation of the agent’s authority from the principal in one of the manners
outlined on page 8.
8. The agent refused to provide an
agent’s certification or an opinion of counsel.
If you choose to reject an agent’s authority for one of
these reasons, you must still follow the procedure outlined on page 6 for rejection. Include the reason you rejected the agent’s authority in the written response and
provide your evidence. If the agent begins a special proceeding, you
want the written record to show that your rejection was reasonable.
When is it unreasonable to reject a valid Power of
Attorney? (NY GOL §5-1504(2)(b))
Finally, there are some reasons for rejection of a valid
POA that are considered unreasonable. They
1. Requiring your own custom
POA form to be signed by the principal.
2. Requiring the POA to have
been signed recently or within some previous time frame.
The principal and agent signed the POA on
Requiring the new statutory POA if the POA was in
the valid statutory form at the time it was executed.
your only reason for rejecting the POA is on this list, you will be paying the agent’s attorney fee in
court. However, if your reason for rejecting the POA is not on either
of the above lists, it will be up to the Judge’s discretion to determine if you acted reasonably or unreasonably,
and if you must pay the agent’s attorney’s fees.