Do you need a new Power of Attorney (POA)?

At Zeus Estate Planning, we understand the importance of a comprehensive estate plan that protects your assets and ensures your wishes are honored. One critical component of any robust estate plan is the statutory short form durable power of attorney (POA). This document allows you to appoint trusted individuals, such as your spouse or children, to manage your financial affairs if you become incapacitated. However, many clients come to us with existing POAs that may no longer be effective or could face challenges when presented to financial institutions. In this article, we’ll discuss the common issues with outdated or improperly executed POAs and why you should consider having yours reviewed by an experienced estate planning attorney.

Outdated Power of Attorney: One of the most frequent issues we encounter is POAs drafted and executed before September 12, 2010, when New York’s POA laws underwent significant changes. The updated law requires a Statutory Gifts Rider (SGR) for any POA that authorizes the agent to make gifts exceeding $500 per year, which is crucial for Medicaid planning and other long-term care strategies. Although POAs executed before this date are “grandfathered” and legally valid if they were executed properly, many financial institutions are reluctant to accept them. At Zeus Estate Planning, we recommend updating your POA to ensure it complies with the current laws, thereby avoiding potential roadblocks when your agents need to act.

Non-New York/Non-Statutory Power of Attorney: Another issue we often see involves POAs that are not compliant with New York State laws. Sometimes clients bring us POAs that were created using generic online templates or forms from other states. These forms may not meet the requirements set out in New York’s General Obligations Law (GOL) §§ 5-1501 to 5-1514, making them unenforceable by banks and other institutions within New York. Our firm specializes in creating New York-compliant POAs that will be honored by all relevant parties, ensuring that your financial affairs are managed according to your wishes.

Improperly Executed Power of Attorney: Even if a POA is correctly drafted, it may still be ineffective if not properly executed. The 2010 law specifies a detailed execution process that must be followed to the letter. A failure in execution can render the document void, leaving your loved ones unable to manage your finances when needed. A review by a skilled attorney at Zeus Estate Planning can identify any execution flaws and help you correct them before it’s too late.

Insufficient Power of Attorney: Many POAs, even those prepared by attorneys, may not include all the necessary powers for effective financial and incapacity planning. For example, your POA should include provisions that allow your agent to engage in Medicaid planning, enroll you in pooled trusts, or change beneficiary designations as necessary. Without an SGR, your agent may be powerless to protect your assets from the high costs of long-term care. At Zeus Estate Planning, we ensure that your POA is fully equipped with all the modifications needed to meet your specific needs.

Prevent Future Issues with a Comprehensive Power of Attorney Review: The worst time to discover problems with your POA is when it’s already too late to fix them. If your POA is outdated, improperly executed, or insufficient in scope, your loved ones could face significant challenges in managing your financial affairs. At Zeus Estate Planning, we strongly recommend a thorough review of your existing POA to ensure it is up to date and fully compliant with current New York laws. As Benjamin Franklin wisely said, “An ounce of prevention is worth a pound of cure.” This adage is especially true when it comes to estate planning documents.

To schedule a consultation with an experienced estate planning and elder law attorney at Zeus Estate Planning, please contact our office at (917) 515-1825. We’re here to help you ensure that your financial affairs are in order and that your loved ones are fully protected.