New York City Power of Attorney Lawyers Providing Legal Services for an Uncertain Future
Have you thought about planning for your future? Perhaps you are considering a will or a trust. Proper estate planning can solve many problems in the unforeseeable future. And, in addition to considering wills and trusts, it is ideal to have a power of attorney and an agent who can, eventually, execute it.
If you are reading this, it is because you can still take care of yourself and your affairs. But this may not always be the case and may change from one day to the next. An accident, illness, or simply old age can render you unable to manage your accounts, property, and other assets. In that sense, it becomes crucial to choose a person who in the face of authority can act in your place. And this can be done through a power of attorney (POA).
At Ortiz & Ortiz, we are lawyers experienced in the practice areas of inheritance disputes and New York asset protection who have been serving the community for over 30 years. If you are looking for advice on planning for the future of your property and assets in the event that you are unable to do so, contact our law offices for a consultation to talk about your case.
What is a Power of Attorney Document?
The words “power of attorney” may sound familiar to you. You probably even know what they mean and have used a power of attorney at some point in your life. But do you know exactly what it’s for, what it’s used for, and what you can do with a power of attorney in the United States?
Characteristics of the New York Power of Attorney
- It is known by the abbreviation POA.
- It is a signed document through which you allow another person to have power over a specific circumstance. This means that a person other than you will have the ability to act as if they were you.
- You are going to allow the designated person to make decisions or perform other actions that are entrusted to them in that document.
- The most common powers of attorney relate to medical, legal, or tax matters.
- The subject of the POA, i.e., the one who issues it, is called the principal.
- The person who is being granted the authority is called the agent.
- It is important to note that the power of attorney granted by the principal to the agent or attorney-in-fact may be broad or specific in terms of powers granted and how much authority they have to make decisions. This will depend on the directives of the principal.
- It is not a form that is completed and delivered. There are several types of powers of attorney. For example, there is the durable power of attorney, the simple power of attorney, and springing power of attorney, among others.
- The power of attorney must be typed or printed clearly and legibly. The handwriting must be at least 12 points.
What Are the Different Types of Powers of Attorney?
The power of attorney that the principal grants to the agent will depend specifically on the circumstances that the agent will be faced with. In the following, we will review each of the powers of attorney and what each one implies.
- General POA is a power of attorney that the principal gives to the agent so that the latter can perform all the acts that the former would do. Basically, for legal purposes, the agent becomes the principal. It serves to file tax returns, execute a contract, and handle bank accounts, among other financial affairs. This power of attorney becomes effective immediately upon its creation and its expiration date will be whenever the principal wishes. It also becomes invalid if the principal becomes incapacitated or dies.
- Durable Power of Attorney is very similar to the general power of attorney. The difference between the two documents is that the durable power of attorney survives in cases where the principal becomes incapacitated. This can be used to give the agent the power to make medical decisions about, for example, end-of-life care for the principal. It will also allow the agent to handle other financial decisions, amongst other things.
- Limited power of attorney is a more restricted power of attorney than the previous two. The actions that the agent can perform with this document will depend exclusively on what is stipulated by the principal in the power of attorney. Another point to consider in this type of power of attorney is that it is used only once.
- Emerging Power of Attorney is a power of attorney that is created without the need to be used immediately. However, it becomes effective upon the occurrence of a triggering event that is determined in the power of attorney by the principal. It can be, for example, a mental or physical disability. It is also sometimes known as a springing power of attorney document.
- Medical Power of Attorney is when it is desired that another person takes over the medical situation when the principal is unable to do so themselves. In that sense, the agent is stipulated to be able to decide for the principal in healthcare situations and give orders on what to do and what not to do. This is sometimes referred to as a health care proxy.
What is a Durable Power of Attorney and What is its Importance?
If you are looking to include a POA in your estate planning, you should know that the durable power of attorney is the most complete of all. The principal, who grants the power of attorney to the agent, asks the agent to make all decisions for them, even when the principal is incapacitated by a medical situation or death.
Considering the above, New York’s durable power of attorney may be the solution if you are looking to secure your estate plan through a will or trust. In that vein, it is important to have a mechanism in place to protect your assets and also ensure that your business, financial, and personal affairs are in good hands.
Basically, the durable power of attorney allows the person you designate to act on your behalf to be vested with the authority to address any procedure that needs to be done.
How is a New York Power of Attorney Made?
First, whoever wishes to grant the power of attorney must be clear about what power of attorney they want to deliver through the document. That is to say, what actions they want to be performed with the document. Once this is clear, the document must be drafted. At this point, it is recommended to seek the legal advice of a lawyer who knows the variety of powers of attorney and the scope that each one of them may have.
When the document is drafted and reflects the intents of the principal, the latter will proceed to sign it before a notary.
In order for a power of attorney to become active and effective, it is the agent who must sign and acknowledge that he/she has read the section entitled “Important Information for the Agent.” This section explains specifically what the agent’s role will be, what fiduciary duties they will have, and what are the limits of the decisions they may make. Also, a power of attorney may become effective upon a triggering event, which will be clearly stated in the document.
It is not necessary for the parties, i.e., the principal and the agent, to sign at the same time.
When Does the Power of Attorney End?
A power of attorney terminates when the expiration date or duty set forth in the document, if any, is met. The POA also terminates in the event of the death of the principal.
The principal may elect to revoke a power of attorney authorities at any time. To do so, it must notify the agent and, in addition, any institution where the agent has used the POA. In that case, if there is no co-agent or successor agent, a power of attorney becomes invalid.
In the case of a non-durable or general POA, a power of attorney becomes invalid immediately when the principal cannot mentally or physically make their own decisions due to incapacitation. In the situation of a durable power of attorney, the document survives the incapacity. Moreover, it is the agent who takes control over health care decisions.
The date or time when the agent’s powers will begin depends on the power of attorney chosen. In general, when they are for specific actions or procedures, the effective date is specified in the contract itself. However, there are powers of attorney that can become effective immediately when there is an incapacity of the principal. In any case, in order to prove that there is an incapacity, there must be a document from the principal’s attending physician stating what the situation is.
What Are the Necessary Qualifications to Be a POA Agent in NYC?
The agent will make medical or other decisions, as well as carry out specific procedures or actions that will be stipulated in the power of attorney. This authority is considerable and, as such, should only be given to those you trust completely. Additionally, there are certain state qualifications that must be met for someone to be allowed to serve as an agent, including:
- Generally, the agent is a family member such as the spouse or any of the children. It is quite common that the principal designates the spouse as their agent and their child as a successor agent. In other words, if something happens to the primary agent, the successors come into play.
- Appointing an agent should be a well-thought-out decision. Moreover, it should be someone you have complete confidence in. If you would not trust them with your credit card, do not trust them with your power of attorney.
- One option to avoid having to appoint a single agent is for the principal to appoint co-trustees. This means that several agents will have to act together and get things done. This works when the principal does not want to give unlimited power to a single agent. However, it has one drawback and that is that it can, in some cases, slow down the proceedings since several agents have to agree.
What Can’t the Agent Do with the Power of Attorney?
The agent can do nothing that the principal has not specifically authorized in the notarized document.
They must always act in the best interests of the principal and their estate. Their POA decision-making cannot be driven by their own selfish interests.
The agent to whom the principal conferred the power of attorney to perform specific actions or make specific decisions cannot grant that power of attorney to a third party. It is only the designated agent who can make use of a power of attorney. Should they no longer want the role, it may be passed on to a successor agent per the instructions of the original document.
What to Do if the Agent is Not Acting in the Interests of the Principal?
The agent that the principal designates in a power of attorney has a fiduciary duty to act in accordance with the principal’s wishes. What happens if your agent does not fulfill the fiduciary duty? The principal can sue and seek damages. The court can also revoke a New York power of attorney if it determines that there has been a breach of fiduciary duty.
What is a Breach of Fiduciary Duty?
Breach of fiduciary duty occurs when a fiduciary acts in their own best interests rather than in the best interests of the principal. In this case, the agent is acting in their own interest rather than in the interest of the principal.
It generally occurs when the principal’s funds are used for the agent’s benefit, when conflicts of interest are not disclosed, commingling of money, etc.
How Do You Ensure That the Agent is Looking Out for the Principal’s Interests?
No doubt you are not the first to ask yourself this question. Trusting someone else with your finances, real estate transactions, medical decisions, and other matters can be difficult. As we said earlier, it is advisable that your agent be someone the principal trusts implicitly, someone to whom he or she would pass a blank check.
If these insecurities arise along the way, a third party can be appointed to act as a supervisor. This is thanks to changes made to the law in 2009 that allow the supervisor to monitor the agent’s actions. Under the law, the supervisor will have the legal right to access the agent’s records and review them on behalf of the principal. Thus, through the supervisor, the principal will be able to ensure that the agent is acting under the interests vested in them.
Is the Agent Liable for the Principal’s Debts?
This is one of the most frequently asked questions by those being appointed as agents. While being appointed agent for a family member or friend may be a privilege, many fear it will become a headache. Don’t worry; it won’t. And here’s why:
- The agent will only be responsible for executing what the principal stipulates in the power of attorney. No more, no less, just that.
- If the principal has debts with creditors, relatives, or whoever, the agent is not personally responsible for them. When a principal has given them the authority to pay their debts through a power of attorney, they are not giving permission to pay the debts out of the agent’s own pocket but rather directs the agent to pay them out of assets or property held by the principal.
Is a Power of Attorney the Same as Guardianship?
A power of attorney is a signed document in which a person, the principal, grants power of attorney to a designated agent for the purpose of performing an action or making certain decisions. You should know that a power of attorney is not the same as guardianship.
Guardianship is a proceeding that is initiated by the Supreme Court. Its purpose is to appoint a guardian for an incapacitated adult. A guardian can still be appointed for someone who is capable but does not have the ability to make certain specific decisions.
The powers of the guardian are set forth in the order and in the judgment entered by the court. Guardianship is governed by Sections 81 and 83 of the New York Mental Hygiene Law.
There are some notable similarities between guardianship and a POA, including:
- Both the power of attorney agent and the court-appointed guardian can be given similar powers to write checks, pay bills, and enter into contracts, among other things.
- In both guardianship and power of attorney, the signing attorney-in-fact must act in the interests of the principal or incapacitated person.
It is important to know that guardianship can sometimes override the power of attorney. When the Court’s judgment appoints a guardian of real estate property, it immediately voids the power of attorney. However, when a guardian of a person is appointed, the power of attorney is not voided. This is because the guardian of a person will only be able to make decisions about their personal affairs. That is, the guardian will not be able to handle financial matters.
Contact Our Law Office to Begin Your Confidential Attorney-Client Relationship
As the saying goes, it is better to be safe than sorry. A properly drafted and executed power of attorney can be the solution to many current and future problems. First of all, it can give you peace of mind as to what will happen to your property and assets if something happens to you or you become incapacitated. And it can not only help you with financial decision-making but also with other decisions such as medical care or property management.
Contact our NYC community estate planning lawyers today and let them know about your legal needs.
A lawyer at our firm can help you with:
- Identify what use you want to make of a power of attorney. And, along those lines, choose the one that is most suitable for your needs.
- Drafting a power of attorney with all the requirements that the law demands.
- Advise you in the whole process, from the appointment of one or more agents, a supervisor, etc.
- Understanding how a power of attorney works in all areas. What is the relationship to guardianship, when does it expire, when does it take effect, and most importantly, what happens when the agent is not doing things right.
Please contact us as soon as possible by mail or phone to schedule a consultation; we look forward to hearing from you! 917-920-6437.