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In this fall newsletter, we wanted to “highlight” some of the revisions to the General Obligations Law in connection with New York’s Statutory Short Form Power of Attorney (‘POA”) and Statutory Gifts Rider (“SGR”) which took effect on September 12, 2010.
As to the time period between September 1, 2009 and September 11, 2010 and the applicable versions of the POA and Statutory Major Gifts Rider (‘SMGR”), forms for any POA and SMGR executed between September 1, 2009 and September 11, 2010 by the Principal and Agent(s) appointed, with their signatures acknowledged by September 11, 2010, remain valid. For any POA and SMGR executed between this time period between September 1, 2009 and September 11, 2010, “if there are multiple, primary Agents with several authority, only the primary Agent(s) executing these forms with his/her/their signatures acknowledged no later than September 11, 2010 may act thereunder. If there are multiple primary Agents with joint authority, “all of the primary Agents must have executed these forms with their signatures acknowledged no later than September 11, 2010, for any of them to act thereunder.” “Successor Agents not executing these forms with their signatures acknowledged no later than September 11, 2010 may not act thereunder.”
Please note that you can still rely on an older statutory form of POA provided that the older statutory from was the statutory form in use and effective on the date of its execution.
The form known as the Statutory Major Gifts Rider (“SMGR”) was changed and the form is now re-named the Statutory Gifts Rider (“SGR”). Another change is that the revised POA and SGR recite that the SGR is required when the Principal wants the Agent to make gifts in excess of $500.00 for gifts as set forth in (I) of the Grant of Authority section in the POA or certain other gift transactions described in the SGR. Therefore, “the gift making capacity of a POA without a SGR is stated as a maximum of $500.00 in any one calendar year.”
There was a change as to the “Witnesses” to the SGR-The notary taking the acknowledgment on the SGR can now be 1 of the witnesses on the SGR.
Now, the execution of the POA does not automatically revoke any prior powers of attorney previously executed unless the Principal specifically provides for the revocation. The Principal must now expressly revoke a prior Power of Attorney-this can be done in the “Modifications” section of the POA. In addition, where the Principal and the Agent are married, the Agent’s authority terminates on their divorce, the annulment of the marriage or the issuance of a “declaration of nullity”, unless stated otherwise in the POA.
The revision also “lists the types of powers that this law does not apply to.” The definition of “power of attorney” was amended to specifically exclude the powers of attorney listed in new Section 1501C-“Powers of attorney excluded from this title.” Please see listed below
the following types of transactions excluded:
1. A power of attorney given primarily for a business or commercial purpose, including without limitation:
2. A proxy or other delegation to exercise voting rights or management rights with respect to an entity;
3. A power created on a form prescribed by a government or governmental subdivision, agency or instrumentality for a governmental purpose;
4.A power authorizing a 3rd party to prepare, execute, deliver, submit and or file a document or instrument with a government or governmental subdivision, agency or instrumentality or other 3rd party;
5. A power authorizing a financial institution or employee of a financial institution to take action relating to an account in which the financial institution holds cash, securities, commodities or other financial assets on behalf of the person giving the power;
6. A power given by an individual who is or is seeking to become a director, officer, shareholder, employee, partner, limited partner, member, unit owner or manager of a corporation, partnership, limited liability company, condominium or other legal or commercial entity in his or her capacity as such;
7. A power contained in a partnership agreement, limited liability company operating agreement, declaration of trust, declaration of condominium, condominium by-laws, condominium offering plan or other agreement or instrument governing internal affairs of an entity authorizing a director, officer, shareholder, employee, partners, limited partner, member, unit owner, manager or other person to take lawful action relating to such entity;
8.A power given to a condominium managing agent to take action in connection with the use, management and operation of a condominium unit;
9. A power given to a licensed real estate broker to take action in connection with a listing of real property, mortgage loan, lease or management agreement ;
10. A power authorizing acceptance of service of process on behalf of the principal; and
11. A power created pursuant to authorization provided by a federal or state statute, other than this title, that specifically contemplates creation of the power, including without limitation a power to make health care decisions or decisions involving the disposition of remains.
Please note that Section 5-1501C also provides that “nothing in this section shall be deemed to prohibit use of a statutory short form of power of attorney or non-statutory power of attorney in connection with any of the transactions described above in Section 5-1501C.
A new subdivision was added-Section 5-1504(7). This section provides that a POA or a non-statutory power of attorney “shall be accepted for recording when there is more than 1 Agent if signed by only 1 Agent, unless the Agents are required to act jointly.” If the Agents are required to act jointly, all agents with joint authority must execute the POA for it to be recorded. The revisions also provide that “when a successor Agent or Co-Agent authorized to act separately from any other agents present a certified copy of a recorded POA or non-statutory power of attorney with the Agent’s signature acknowledged, the instrument shall be accepted for recording.”
If you have any questions or would like further information regarding any of the articles in this newsletter, please contact Michael Alfieri, Esq. at (212) 651-1200 or malfieri@prestitle.com.
Also, if there are any topics that you would like us to include in future newsletters, please feel free to e-mail us with suggestions at info@prestitle.com.
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