Governor Signs Chapter Amendment as Part of New Power of Attorney Law

Governor Signs Chapter Amendment as Part of New Power of Attorney Law

3.25.2021

By Christian Nolan

Gov. Andrew M. Cuomo has signed the much-anticipated chapter amendment legislation as part of the new power of attorney law that goes into effect June 13.

Cuomo, who signed the chapter amendment bill March 25, negotiated the agreement with lawmakers when signing the original New York State Bar Association-advanced power of attorney bill in December.

The chapter amendment, considered a compromise because it created an additional burden on the execution of the power of attorney, requires that two disinterested witnesses sign the power of attorney form.

The chapter amendment also exempts the state Department of Health, including social services districts in the administration of the Medicaid program or other public health insurance programs, from the requirement that third parties honor or reject a statutory short form power of attorney within ten business days.

Lastly, it makes technical changes to the statutory short form sections relating to the designation of multiple agents. According to the bill, the witnesses cannot be an agent, successor agent or a permissible recipient of gifts under the power of attorney.

The announcement of the new power of attorney law (A.5630-A/S.3923-A) in mid-December 2020 was a major victory for NYSBA which long advocated for the reform on members’ behalf.

A power of attorney is one of the most widely used legal documents, allowing people who fear they will no longer be able to manage their own financial affairs to transfer that power to someone else. Doing so avoids the need for a time consuming and expensive guardianship proceeding when a person becomes incapacitated.

The current power of attorney form proved to be too complex, costly and difficult for individuals to use. Residents of nursing homes and long-term care facilities found it nearly impossible to fill out during the pandemic when an attorney was not present. Its rigid requirement that the exact language of the statute be incorporated in the document meant that the form could be invalidated for harmless errors.

The new law, which creates a presumption in favor of the validity of a power of attorney form, makes rejection of the document less likely because it allows language that substantially conforms with the statute rather than requiring the form to incorporate the exact wording. It also discourages banks and other financial institutions from improperly refusing to accept the form by allowing a judge to impose penalties and attorney fees against institutions that unreasonably refuse to accept a consumer’s valid power of attorney form.

Additionally, the reforms in this legislation eliminate the Statutory Gifts Rider.