Estate planning isn’t just about creating a will. It’s about securing your family’s future. And it’s about securing your interests, as well. Two of the most important things your estate plan can do are establish your healthcare directives and give someone power of attorney.
Your healthcare directives ensure your doctors and family understand the sort of treatment you would want if you were ever unable to request it. Similarly, by granting someone power of attorney, you make sure your financial decisions go to someone you trust if you are ever unable to make them yourself. Upcoming changes to New York’s power of attorney form improve the efficacy of your power of attorney in four key ways.
Fewer restrictions on exact wording
Previously, it was possible to find a power of attorney form invalid if the language strayed from the statutory language. This resulted in the invalidation of Powers of Attorney that made harmless, innocent errors. The new law accepts language that conforms with the law, even if it doesn’t track the statutory language verbatim. This relaxation of the standard reduces the odds anyone will find your power of attorney invalid because of small, innocent mistakes.
The law now presumes a power of attorney is valid
A power of attorney is only good when it actually allows the designee to care for your finances. However, there were few penalties for banks and other financial institutions that refused to recognize the validity of a power of attorney. The updated law now encourages third parties to accept its validity and act upon it. The law creates a presumption that the power of attorney is valid and allows a judge to penalize banks and other third parties that refuse to act without good reason.
No more Statutory Gift Rider
The updates also simplify the power of attorney process by getting rid of the Statutory Gift Rider (SGR). This form stood apart from the primary power of attorney form, but it was necessary if the creator wanted to allow the individual with power of attorney to provide gifts worth more than $500 per year. The SGR created extra paperwork and confusion. The update allows the creator to resolve the matter of gifts within the power of attorney form itself.
Greater clarity between power of attorney and health care proxy
The updated law provides greater clarity to the distinction between the powers granted to power of attorney and a health care proxy. It clearly spells out the fact that someone with power of attorney has only the power to make financial decisions related to health care. Someone with power of attorney may receive as much protected medical information as needed to resolve financial matters. The decisions about treatment remain firmly with the health care proxy.
Power of attorney is now easier and more reliable
The New York State Bar Association (NYSBA) praised the changes, which it had previously requested. In its initial presentation of the updates, the NYSBA claimed they represented a big win. They should make people more confident that they can express their wishes and see them carried out. They protect vulnerable adults and, as the NYSBA noted, they translate to important differences, such as making sure mortgages or rents are paid on time and ensuring that people can pay for the services they need.