What's happening
This bill reforms New York's power of attorney laws, making forms easier to use, removing the statutory gifts rider, and clarifying agent authority.
Why it matters
Makes Power of Attorney Forms Easier to Use and More Flexible. The bill replaces the requirement for exact language with a “substantial conformity” standard, reducing the risk of technical errors invalidating documents. Minor mistakes in wording, formatting, or use of bold/italic type will no longer make a power of attorney invalid.
Eliminates the Statutory Gifts Rider (SGR). Previously, if you wanted your agent to make gifts or change property interests, you needed a separate, complex SGR. This bill removes that requirement—now, such powers can be granted directly in the main Power of Attorney document, making the process more straightforward and less confusing for the public.
Clarifies and Expands Agent Authority. The new law clarifies what agents can and cannot do, especially regarding gifting, changing beneficiary designations, and acting for the principal in financial health care matters. It also increases the annual limit for customary gifts from $500 to $5,000, reflecting modern financial realities.
Strengthens Protections and Acceptance Requirements. Third parties (like banks) are now required to accept properly executed powers of attorney unless there’s a clear, reasonable cause for refusal. If they unreasonably refuse, they could be liable for damages and attorney’s fees. The law also provides for expedited review and greater legal clarity for those relying on or challenging powers of attorney.
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Who cares
Headline styles
Simplify Power of Attorney
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Substituted by A5630A
- Amended on third reading 3923a
- Advanced to third reading
- 2nd report cal.
- 1st report cal.589
- Referred to judiciary
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.1061
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Simplify Power of Attorney Forms
Signed by Governor · Sponsor Helene Weinstein
Full text
16 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3923--A Cal. No. 589
2019-2020 Regular Sessions
IN SENATE
February 21, 2019
Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- recommitted to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading
AN ACT to amend the general obligations law, in relation to reforming the statutory short form and other powers of attorney for purposes of financial and estate planning; and to repeal certain provisions of such law relating to statutory gift riders
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (j) of subdivision 2 of section 5-1501 of the general obligations law, as amended by chapter 340 of the laws of 2010, is amended to read as follows:
(j) "Power of attorney" means a written document, other than a document referred to in section 5-1501C of this title, by which a principal with capacity designates an agent to act on his or her behalf and includes both a statutory short form power of attorney and a non-statutory power of attorney.
§ 2. Paragraph (n) of subdivision 2 of section 5-1501 of the general obligations law is REPEALED, and paragraphs (o), (p) and (q) are relettered paragraphs (n), (o) and (p).
§ 3. Paragraph (n) of subdivision 2 of section 5-1501 of the general obligations law, as amended by chapter 340 of the laws of 2010 and as relettered by section two of this act, is amended to read as follows:
(n) "Statutory short form power of attorney" means a power of attorney that meets the requirements of paragraphs (a), (b) and (c) of subdivision one of section 5-1501B of this title, and that [contains the exact] substantially conforms to the wording of the form set forth in section 5-1513 of this title; provided however, that any section indicated as
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00875-03-0
S. 3923--A 2
"Optional" that is not used may be omitted and replaced by the words "Intentionally Omitted". [A mistake in wording, such as in spelling, punctuation or formatting, or the use of bold or italic type, shall not prevent a] A given power of attorney [from being deemed a statutory short form power of attorney, but the wording of the form] substantially conforms to the form required pursuant to section 5-1513 of this title notwithstanding that the form contains (i) an insignificant mistake in wording, spelling, punctuation or formatting, or the use of bold or italic type; or (ii) uses language that is essentially the same as, but is not identical to, the statutory form, including utilizing language from a previous statute. The determination of whether there is substantial conformity with the form set forth in section 5-1513 of this title [shall govern] shall not depend on the presence or absence of a particular clause. Failing to include clauses that are not relevant to a given power of attorney shall not in itself cause such power of attorney to be found to not substantially conform with the requirements of such form. The use of the form set forth in section 5-1513 of this title is lawful and when used, it shall be construed as a statutory short form power of attorney. A statutory short form power of attorney may be used to grant authority provided in sections 5-1502A through 5-1502N of this title. A "statutory short form power of attorney" may contain modifications or additions as provided in section 5-1503 of this title[, but in no event may it be modified to grant any authority provided in section 5-1514 of this title. If the authority (SGR) on the statutory short form is initialed by the principal, the statutory short form power of attorney must be executed in the manner provided in section 5-1501B of this title, simultaneously with the statutory gifts rider. A statutory short form power of attorney and a statutory gifts rider which supplements it must be read together as a single instrument].
§ 4. Subdivisions 1 and 2 of section 5-1501B of the general obligations law, as added by chapter 644 of the laws of 2008, the opening paragraph and paragraphs (b) and (c) of subdivision 1, and the opening paragraph and paragraph (a) of subdivision 2 as amended by chapter 340 of the laws of 2010, are amended to read as follows:
1. To be valid, except as otherwise provided in section 5-1512 of this title, a statutory short form power of attorney, or a non-statutory power of attorney, executed in this state by a principal, must:
(a) Be typed or printed using letters which are legible or of clear type no less than twelve point in size, or, if in writing, a reasonable equivalent thereof.
(b) Be signed, initialed and dated by a principal with capacity, or in the name of such principal by another person, other than a person designated as the principal's agent or successor agent, in the principal's presence and at the principal's direction, in either case with the signature of the [principal] person signing duly acknowledged in the manner prescribed for the acknowledgment of a conveyance of real property in the presence of the principal. When a person signs at the direction of a principal he or she shall sign by writing or printing the principal's name, and printing and signing his or her own name.
(c) Be signed and dated by any agent acting on behalf of the principal with the signature of the agent duly acknowledged in the manner prescribed for the acknowledgment of a conveyance of real property. A power of attorney executed pursuant to this section is not invalid solely because there has been a lapse of time between the date of acknowledgment of the signature of the principal and the date or dates of acknowledgment of the signature or signatures of any agent or agents or
S. 3923--A 3
successor agent or successor agents authorized to act on behalf of the principal or because the principal became incapacitated during any such lapse of time.
(d) [Contain the exact] Substantially conform to the wording of the:
(1) "Caution to the Principal" in paragraph (a) of subdivision one of section 5-1513 of this title; and
(2) "Important Information for the Agent" in paragraph (n) of subdivision one of section 5-1513 of this title.
2. [In addition to the requirements of subdivision one of this section, to be valid for the purpose of authorizing the agent to make certain gift transactions described in section 5-1514 of this title:
(a) a statutory short form power of attorney must contain the authority (SGR) initialed by the principal and be accompanied by a valid statutory gifts rider; and
(b) a non-statutory power of attorney must be executed pursuant to the requirements of paragraph (b) of subdivision nine of section 5-1514 of this title.] Insubstantial variation in the wording of the "Caution to the Principal" of paragraph (a) of subdivision one of section 5-1513 of this title or of the "Important Information for the Agent" of paragraph (n) of subdivision one of section 5-1513 of this title shall not prevent a power of attorney from being deemed a statutory short form power of attorney or a non-statutory power of attorney.
§ 5. Subdivisions 2 and 9 of section 5-1502A of the general obligations law, as amended by chapter 340 of the laws of 2010, are amended to read as follows:
2. To sell, to exchange, to convey either with or without covenants, to quit-claim, to release, to surrender, to mortgage, to incumber, to partition or to consent to the partitioning, to create, modify or revoke a trust [unless such creation, modification or revocation is a gift transaction governed by section 5-1514 of this title,] to grant options concerning, to lease or to sublet, or otherwise to dispose of, any estate or interest in land;
9. To execute, to acknowledge, to seal and to deliver any deed, creation, modification or revocation of a trust [unless such creation, modification or revocation is a gift transaction governed by section 5-1514 of this title], mortgage, lease, notice, check or other instrument which the agent may think useful for the accomplishment of any of the purposes enumerated in this section;
§ 6. Subdivisions 2 and 7 of section 5-1502B of the general obligations law, as amended by chapter 340 of the laws of 2010, are amended to read as follows:
2. To sell, to exchange, to convey either with or without covenants, to release, to surrender, to mortgage, to incumber, to pledge, to hypothecate, to pawn, to create, modify or revoke a trust [unless such creation, modification or revocation is a gift transaction governed by section 5-1514 of this title] to grant options concerning, to lease or to sublet to others, or otherwise to dispose of any chattel or goods or any interest in any chattel or goods;
7. To execute, to acknowledge, to seal and to deliver any conveyance, mortgage, lease, creation, revocation or modification of a trust [unless such creation, modification or revocation is a gift transaction governed by section 5-1514 of this title], notice, check or other instrument which the agent may think useful for the accomplishment of any of the purposes enumerated in this section;
S. 3923--A 4
§ 7. Subdivisions 2 and 9 of section 5-1502C of the general obligations law, as amended by chapter 340 of the laws of 2010, are amended to read as follows:
2. To sell (including short sales), to exchange, to transfer either with or without a guaranty, to release, to surrender, to hypothecate, to pledge, to create, modify or revoke a trust [unless such creation, modification or revocation is a gift transaction governed by section 5-1514 of this title,] to grant options concerning, to loan, to trade in, or otherwise to dispose of any bond, share, instrument of similar character, commodity interest or any instrument with respect thereto;
9. To execute, to acknowledge, to seal and to deliver any consent, agreement, authorization, creation, modification or revocation of a trust [unless such creation, declaration, modification or revocation is a gift transaction governed by section 5-1514 of this title], assignment, notice, waiver of notice, check, or other instrument which the agent may think useful for the accomplishment of any of the purposes enumerated in this section;
§ 8. Subdivision 1 of section 5-1502D of the general obligations law, as amended by chapter 644 of the laws of 2008, paragraphs (a) and (b) as amended by chapter 340 of the laws of 2010, is amended to read as follows:
1. To continue, to modify, to terminate and to make deposits to and withdrawals from any deposit account, including any joint account with the agent or totten trust for the benefit of the agent, or other banking arrangement made by or on behalf of the principal prior to the creation of the agency, provided, however, that:
(a) with respect to joint accounts existing at the creation of the agency, the authority granted hereby shall not include the power to change the title of the account by the addition of a new joint tenant or the deletion of an existing joint tenant, unless the authority to make such changes is [conveyed in a statutory gifts rider to] expressly stated otherwise in the "Modifications" section of a statutory short form power of attorney or in a non-statutory power of attorney signed and dated by the principal with the signature of the principal duly acknowledged in the manner prescribed for the acknowledgement of a conveyance of real property, and which is executed pursuant to the requirements of [paragraph (b) of subdivision nine of] section [5-1514] 5-1501B of this title, and
(b) with respect to totten trust accounts existing at the creation of the agency, the authority granted hereby shall not include the power to add, delete, or otherwise change the designation of beneficiaries in effect for any such accounts, unless the authority to make such additions, deletions or changes is [conveyed in a statutory gifts rider to] expressly stated otherwise in the "Modifications" section of a statutory short form power of attorney or in a non-statutory power of attorney signed and dated by the principal with the signature of the principal duly acknowledged in the manner prescribed for the acknowledgment of a conveyance of real property, and which is executed pursuant to the requirements of [paragraph (b) of subdivision nine of] section [5-1514] 5-1501B of this title.
§ 8-a. Section 5-1502D of the general obligations law is amended by adding a new subdivision 18 to read as follows:
18. If a power of attorney requires that two or more agents act together as co-agents, one or more agents may delegate to the co-agent the authority to conduct banking transactions if the principal initialed
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subject (o) in the grant of authority provisions of paragraph (f) of the statutory short form set forth in section 15-1513 of this title.
§ 9. Subdivisions 1 and 3 of section 5-1502F of the general obligations law, as amended by chapter 340 of the laws of 2010, are amended to read as follows:
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general obligations law, in relation to reforming the statutory short form and other powers of attorney for purposes of financial and estate planning; and to repeal certain provisions of such law relating to statutory gift riders
Purpose of bill
This bill would: 1) simplify the current power of attorney form, which is too complex and prone to improper execution; 2) allow for substan- tially compliant language, because the exact wording requirement in current law is unduly burdensome and becomes a trap for the unwary; 3) provide safe-harbor provisions for those who, in good faith, accept an acknowledged power of attorney without actual know ledge that the signa- ture is not genuine; 4) allow sanctions for those who unreasonably refuse to accept a valid power of attorney; and, 5) make a number of technical amendments to: allow a person to sign at the direction of a principal who is unable; expand an agent's power to make gifts in the aggregate in a calendar year from the current $500 limit to $5,000 with- out requiring a modification to the form; clarify an agent's obligation to keep records or keep receipts; and clarify the agent's authority with regard to financial matters related to health care.
Summary of provisions of bill
Various sections of Article 5 of the General Obligations Law would be amended to:
Read the full memo (2,495 words)
§ 5-1501: (j), clarify that a "power of attorney" (POA) includes both a statutory short form power of attorney and a non-statutory power of attorney; (n), delete the definition of a statutory gift rider (SGR); (o), (now (n)) change the requirement of "exact wording" to "substan- tially conforms" and allow for optional sections of the form to be intentionally omitted.
§ 5-1501B: (b), provide that a POA can be signed, initialed and dated by a principal with capacity, or in the name of the principal by another person in the principal's presence and at the principal's direction; (d) change the requirement of "exact wording" to "substantially conforms";(e) provide that insubstantial variation will not prevent a form from being a statutory short form power of attorney; repeal Subdi- vision 2 which deals with the SGR.
§ 5-1502A, § 5-1502B, § 5-15020, § 5-1502D, § 5-1502F, § 5-1502L; § 5-1503; § 5-1505; § 5-1514: remove provisions that apply to the SGR.
§ 5-15021: Allow for gifts under this provision to be increased to five thousand dollars in the aggregate in any calendar year.
§ 5-1502K: Clarify the construction of the provision dealing with finan- cial matters related to health care.
§ 5-1504: Add Safe Harbor provisions. Subdivision 1 provides for reli- ance in good faith upon an acknowledged power of attorney and allows for requesting an agent's certification and an opinion of counsel. Subdivi- sion 2 (a), add reasonable cause for refusing to honor a power of attor- ney to include new provisions (10) refusal to provide a certification or opinion of counsel. These provisions are based on provisions from the Uniform Power of Attorney Act, which has been adopted in other states. Subdivision 3, allow for a third party to reject the statutory short form power of attorney in a writing that sets forth the reasons for such rejection, for the proponent of the power of attorney to respond and for the third-party to honor the statutory short form power of attorney, or finally reject the statutory short form power of attorney in a writing that sets forth the reasons for such rejection. Subdivision 4, authorize a special proceeding under § 5-1510 to be brought to compel the third- party to honor the statutory short form power of attorney and that the court may award damages, including reasonable attorney's fees and costs, if the court finds that the third party acted unreasonably in refusing to honor the agent's authority. It continues the provision that such special proceeding shall be the exclusive remedy for a violation of this section.
§ 5-1510: subdivision 2 (i), eliminate the provision limiting relief to an order compelling compliance.
§ 5-1513: Subdivision 1, allow for a form which substantially conforms to the form in the Section and provides that any section indicated as "Optional" which is not used may be omitted and replaced by the words "Intentionally Omitted." Subdivision 1 (b) and (c), add the provisions respectively to be initialed that agents or successor agents must act together. (e), eliminate the confusing provision regarding agents under separate POAs acting together. (f)(2)(I), change the default customary gifting authority under personal and family maintenance to five thousand dollars in a calendar year. (k), change the provision to "financial matters related to health care billing and payment matters; records, reports and statements." (g), state that authority to make gifts must be expressly granted in the Modifications section. (h), provide that the modification section is where the specific authority to make gifts including gifts to the agent must be provided. (j), indicate reasonable compensation for an agent should be provided in the modification section. (n) (4), clarify that an agent must keep a record of all trans- actions conducted for the principal or keep all receipts of payments and transactions conducted for the principal.
(o) and (p), provide a place where the agent can date as well as sign.
Justification
This reform legislation is necessary for three major reasons: *The Power of Attorney form is too complex and prone to improper execution;
*The current statutory exact wording requirement is unduly burdensome and becomes a trap for the unwary; and
*Financial institutions or others who unreasonably refuse to accept a valid power of attorney are not currently subject to any sanctions.
1) The Power Of Attorney Form Is Too Complex and Prone to Improper Execution. The current Power of Attorney form is a multi-part document which contains an initial power of attorney form ("POA") including an acceptance by the agent and a statutory gifts rider ("SGR" ).*1 The SGR must be attached to the POA and executed at the same time that the POA is executed by the principal for it to be effective. No gifting by the agent in excess of $500 is permitted by the principal without a properly executed SGR. The POA and the SGR each has its own signing requirements and different allowable modifications. The POA must be signed and acknowledged by the principal before a notary and it is followed by an acceptance by the agent(s) and successor agent(s) which can be signed and acknowledged at a later date. The SGR has a different requirement it must be both acknowledged and witnessed by two witnesses and this must be done simultaneously with the execution of the POA by the principal.
The 2008 and 2010 amendments to the Power of Attorney sought to heighten awareness by the principal for the significance of the gifting provision and the dangers in not understanding the nature and consequences of the gifting provisions. However, it has been the experience of an overwhelm- ing number of practitioners and their clients that the goal of height- ened awareness has not been achieved by the current statutory form. The current form, which is too long and too complex, creates confusion for the principal, and has led to forms that are routinely improperly executed and forms so complex they are extremely difficult to execute properly within the requirements of the current law.
2) The current statutory exact wording requirement is unduly burdensome and becomes a trap for the unwary.
The POA and SGR forms are full of traps for the unwary, which have significant and severe repercussions if defect(s) in the forms' prepara- tion or signing are not discovered until after the principal suffers incapacity. To address this issue this bill would eliminate the compli- cated current POA and SGR and revert back to one simpler document. We have recommended that gifting provisions can be inserted in the modifi- cation section of the POA requiring only one procedure for acknowledging the signature of the principal.
Under the current law, a POA must contain the exact wording provided in the statute. This bill would amend the law so the standard for a valid statutory power of attorney would be "Substantial Compliance" with the statutory form rather than "Exact Wording." This bill would allow for a form to be a valid Statutory Short Form if it "conforms substantially" to the form in GOL § 5-1513. Proponents of the current exact-wording requirement have cited the need for facilitating acceptance of statutory powers of attorney by third parties, most notably financial insti- tutions, as the reason why they refused to accept "substantial compli- ance" versus "exact language? The opposite is true. Third parties don't have the staff or the time for a word by word review of what is now often a multi-page form with 20 plus places to be initialed. Instead, third parties have just reinstated their policy of refusing to accept any POA form except their own. Even though this is in contravention of the letter of the law. There are presently no consequences to the insti- tutions for this refusal. The consequences to an attorney for an error in the exact wording can be dire, as without compliance to the exact wording requirement, the power of attorney is not only no longer deemed a statutory form, but may also be deemed not valid.*2
A given power of attorney "substantially conforms" to the form required pursuant to Sec. 5-1513 if the General Obligations Law notwithstanding that the form contains (i)an insignificant mistake in wording or punctu- ation, (ii)uses language that is essentially the same as, but is not identical to, the statutory form, including utilizing language from a previous statute, or (iii) contains clauses, or fails to include claus- es, that are not relevant to a given power of attorney. These shall be considered an "insubstantial variation " and shall not prevent a form from being valid or not being a statutory form.
3) There are no sanctions for financial institutions or others who unreasonably refuse to accept a valid power of attorney. This bill would allow sanctions against third parties who unreasonably refuse to accept a properly executed statutory Power of Attorney. The current remedy of having to bring a burdensome and expensive special proceeding as the only relief to compel acceptance is totally inadequate without the ability of the court to impose sanctions.
Therefore, this bill would preserve the special proceeding under GOL § 5-1510 as the exclusive remedy, and add provisions to allow a court to award damages, including reasonable attorney's fees and costs if the court finds that a third party acted unreasonably in refusing to honor the agent's authority under the Statutory Short Form Power of Attorney.
In order to balance the equities and reduce the burden on the third party institution presented with a POA, this bill includes several safe harbor provisions. The legislation establishes a procedure whereby a third party can reject a power of attorney and set forth the reasons for such rejection, and allow the proponent to respond to the reasons for such rejection. The third party may also ask the agent for his or her certification of any factual matter concerning the principal, agent, or power of attorney and an opinion of counsel as to any matter of law concerning the power of attorney.
In 2015, the New York State Bar Association created its Power of Attor- ney Task Force in response to difficulties experienced by many legal practitioners and their clients with the currently existing power of attorney form. The Task Force is comprised of practitioner s who repre- sent the views and experiences of lawyers from a wide-variety of prac- tice areas. The State Bar Association Sections represented on the Task Force include the: Trusts & Estates Law Section, Elder Law and Special Needs Section, Business Law Section, Real Property Law Section and Health Law Section. The Task Force prepared a report that is the basis for this legislation. That report was unanimously approved by the Asso- ciation's House of Delegates, its policy-making body, at its January 2016 meeting. Enactment of this legislation is top legislative priority for the Association.
Reform of the power of attorney law is even more urgent considering the COVID-19 Pandemic and its potential aftermath. The situation in nursing homes and assisted living facilities has illustrated the difficulty our most vulnerable have in executing documents. While remote notarization utilizing audio-video technology is possible by Executive Order 202.7, the current complex power of attorney form, requiring initialing in multiple places, has proven difficult when the attorney/notary is remote. In addition, the requirement of two witnesses for the Statutory Gifts Rider, although possible, makes remote audio-video execution requiring the principal and three other people very difficult, because of the requirements of Executive Order 202.14 regarding audio-video witnessing and the subsequent electronic exchange of documents. The reforms in this legislation simplifying the form, eliminating two addi- tional witnesses for the Gifts Rider, and allowing substantial conformi- ty rather than exact wording will greatly improve the situation. Even after the pandemic there will be lingering issues of access by visitors to nursing homes and assisted living facilities. Once the Exec- utive Order on remote notarization expires, trying to execute a power of attorney using a notary at a facility who may not be familiar with the form will be difficult.
Once the restrictions of the pandemic are over, many elderly and disa- bled persons will have past due bills, back rent and mortgage payments to deal with. Enabling them to execute the simplified power of attorney authorized under this bill and have an agent deal with creditors, utili- ties, banks and landlords will be of utmost importance. This new law would essentially make accepting (rather than rejecting) the power of attorney the default which would substantially alleviate the frustrating burdens of the current law in many situations.
Legislative history
2018: A.9033/S.6501-A - A. Codes/S. Rules
Fiscal implications for state and local governments
None.
Effective date
This act shall take effect in 180 days, provided however that any statu- tory short form power of attorney and any statutory gifts rider executed by the principal and valid at the time executed by the principal shall remain valid as will any revocation of a prior power of attorney that was delivered to the agent before the effective date of the act. *1 The current forms were created as a result of the 2008 and 2010 legislation. 2008 N.Y. Laws Ch. 644 (effective Sept. 1, 2009); 2010 N.Y. Laws Ch. 340 (effective Sept. 12, 2010). *2 Bernan v Siena Coll., 129 A.D.3d 1004, 12 N.Y.S.3d 240 (2d Dep't 2015). (Upholding summary judgment dismissing a complaint signed by an agent under a power of attorney holding that "Statutory short form powers of attorney and non-statutory powers of attorney must contain certain 'exact wording' in order 'to be valid'...."). *3 http://www.uniformlaws.org/shated/docs/powerof Attorney/UPOAA 2011_FinalAct_201 4sep9.pclf. See the Enactment Status Map at http:/ /www.uniformlaws.org/Act.aspx?title=Powerof Attorney
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.