On December 15, 2020, New York Governor Andrew Cuomo signed the Advanced Power of Attorney Bill into law. Sponsored by Senator Brad Holyman and Assemblywoman Helene Weinstein, the law resolves issues with the old law, making the power of attorney a more helpful document for New Yorkers.
The purpose of a power of attorney
A power of attorney is a document that gives an agent the legal power to make decisions and take actions on your behalf. Your agent is limited only by the constraints that you’ve established on the document. Power of attorney is valuable should you become incapacitated and unable to make decisions for yourself. However, if an institute deems a power of attorney legally invalid, it becomes useless.
Issues with the old law
The old law required powers of attorney to be in “strict compliance” or error-free to be valid in New York. Unfortunately, this requirement made many powers of attorney invalid. A typo, improper formatting or improper word usage were enough to invalidate a document.
In practice, institutes requiring power of attorney to receive payments could reject the form for a trivial error. These same institutes could then charge late fees for payments not received on time. By the time the institute received an acceptable form, the person represented would owe significantly more money.
What the new law accomplishes
The new law now requires that a power of attorney document show “substantial compliance,” rather than “strict compliance” to be valid. A receiving institute can now accept documents with minor errors.
The law still allows the receiving institute to reject forms based on errors it determines are significant. However, a second measure in the new law helps to reduce unreasonable rejections. If an institute refuses a power of attorney, the rejected party can now challenge that decision in court. If a court determines that the institute acted unreasonably, it could penalize the institute with monetary damages and court fees.
The new law also places time constraints on institutes to accept or reject a power of attorney. The institute must state its decision within 10 days of receiving the form and communicate rejections in writing. New Yorkers can then appeal the rejection, and institutions must announce their decision within 10 days of receiving a response on the appeal.
Additionally, the updated law allows for an individual to sign a power of attorney on behalf of another. The law permits this only in instances where a person is unable to sign for themselves. Two witnesses must be present in this scenario, though the law allows one to be a notary.
The new law is a boon to New Yorkers, especially during uncertain times. It takes the stress out of the power of attorney process and makes the document what it was meant to be — useful.
