New York City Durable Power of Attorney Lawyer
Part of estate planning is planning for incapacity. A serious illness or accident can occur at any time that leaves you physically and mentally incapacitated so that you are unable to take care of your own affairs. With a power of attorney you grant to another person, known as your "agent" or "attorney-in-fact," the authority to act on your behalf with respect to financial matters. While you can execute a power of attorney at any time for any reason, one reason to do so is to make sure someone is available to care for your finances in the event you cannot due medical issues. Typically, a power of attorney terminates if you become disabled or incompetent. However, unless it specifically states otherwise, a New York power of attorney is durable. A durable power of attorney remains in effect even if you become incapacitated, but will terminate upon your death. NY GOB Law § 5-1501A. As you consider the best way to meet your personal and family goals, contact an experienced New York City Durable Power of Attorney Lawyer who will be able to educate you on the value of a durable power of attorney, as well as other important estate planning tools such as a health care proxy, living will, and last will and testament.
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A power of attorney can be durable or non-durable. A non-durable power of attorney is a conventional power of attorney that becomes invalid when you as the person who creates it becomes incapacitated. A durable power of attorney, on the other hand, is effective even though you have become mentally incapacitated. This is the reason that having a durable power of attorney is important in planning for the possibility of future incapacity.
In drafting your power of attorney, you have enormous flexibility in granting and limiting the power of your agent. For example, with a power of attorney for financial matters, you can grant someone the authority to:
- Pay your bills and everyday expenses
- Provide gifts to family members, up to $10,000 per year
- Manage your real estate, including buying, selling and collecting rent
- Manage investments, including voting, receiving or reinvesting dividends, capital gains or interest, or selling, assigning or transferring securities.
- Manage your tax returns, including preparing, signing and filing.
- Manage your bank accounts, including opening, closing, or modifying.
- Purchase insurance policies for you, including life, medical, long-term care and disability.
- Borrow money on your behalf, including cancelling or continuing credit card accounts.
- Run your business for you, including forming any type of legal entity for you, transfer your property to a business owned by you, or reorganize, merge, liquidate or dissolve your business.
- Manage your retirement accounts, including establishing, contributing, and rolling funds over.
- Hire professionals on your behalf such as an attorney.
- Apply for and collect any government benefits to which you are entitled such as Social Security and Medicare
Even if you give your attorney-in-fact very broad powers to manage your finances, there are limits to what your attorney-in-fact can do on your behalf. For example, your attorney-in-fact would not have the legal right to transfer your assets to him or herself or to make, change or revoke your will.What is Needed to Execute a Durable Power of Attorney?
Similar to other estate planning documents, in order to properly execute a power of attorney you must do so in the manner required by New York law. The power of attorney must be legible. You as the principal must sign it, date it and your signature must be acknowledged. It must also be signed and dated by the person you are appointing to be your attorney-in-fact. Furthermore, there is certain statutory language that must be included in the power of attorney in order for it to comply with New York law. NY GOB Law § 5-1501B.
A durable power of attorney typically becomes effective on the date that it is executed. However, you can make the power of attorney "springing," so that it only becomes effective in the event you become incapacitated or some other contingency occurs. In other words, you and your attorney-in-fact can execute the power of attorney immediately, even though you are in good health and can take care of your own affairs. Your attorney-in-fact would not have the authority to act for you. However, should a doctor confirm in writing that you are no longer competent to handle your financial affairs you would have authority to act.
In addition to naming a primary attorney-in-fact, it is also a good idea to name a successor attorney-in-fact in case your primary choice passes away or is unable to unwilling to serve for some other reason. Otherwise when you do need an attorney-in-fact to act for you, no one would have been appointed.
After executing your durable power of attorney you should periodically revisit it to make sure it is still consistent with your wishes. It is important to make sure the person you have named as your attorney-in-fact remains your choice and that that person is still willing and able to take on the responsibility.When Does a Durable Power of Attorney End?
As long as you are competent, you can revoke the power-of-attorney at any time. Revocation of a durable power of attorney occurs automatically if you die. NY GOB Law § 5-1511. By law a power of attorney terminates if any of the following events occur:
- You revoke your attorney-in-fact's authority and there is no successor attorney-in-fact who is able to willing to serve
- Your attorney-in-fact dies or is otherwise unable to serve and there is no successor attorney-in-fact who is able to willing to serve
- The authority of your attorney-in-fact terminates and there is no successor attorney-in-fact who is able to willing to serve.
- The purpose of the power of attorney is accomplished
- A court order revokes the power of attorney
- You execute a new power of attorney, and thus automatically terminating a prior power of attorney
N.Y. GOB. Law § 5-1511What if I want my attorney-in-fact to also serve as my executor?
Because you entrust your attorney-in-fact to take care of your financial affairs should you be become incapacitated, it is only natural to want that person to continue in a similar capacity and wind up your affairs once you pass away. However, a power of attorney does not give your attorney-in-fact the authority to manage your estate after your death. That job belongs to the person you name in your will as the executor of your estate. If you want the person who you name as your attorney-in-fact in your durable power of attorney to also handle your affairs after you pass away, you must also name that person in your will as your executor.What is the difference between a durable power of attorney and a health care proxy?
A health care proxy and a durable power of attorney are similar. With a health care proxy you delegate to a person referred to as your health care agent the authority to make decisions for you regarding medical issues, while a durable power of attorney typically relates to financial matters. A health care proxy is also called a durable power of attorney for healthcare. A health care proxy is "durable" in that under New York’s Public Health law your agent’s authority to make health care decisions for you begins only when your doctor documents in writing that you have lost the capacity to make decisions for yourself. N.Y. PBH. Law § 2983
Examples of the decisions that you can give your health care agent the authority to make include whether you should receive artificial respiration, CPR, antibiotics, artificial nutrition and hydration, antipsychotic medication, electric shock therapy, surgery, dialysis, organ transplantation, or blood transfusions. If you give your agent the authority to withdraw or withhold life sustaining treatment, before your agent can exercise that authority New York law requires that a second physician confirm that you lack the capacity to make health care decisions. N.Y. PBH. Law § 2983 (1)(a). If you recover from your condition to the extent that you are able to make decisions for yourself, the authority of your health care agent will end.What if I do not have a Durable Power of Attorney?
The consequence of not having a durable power of attorney is that there may not be a plan or an understanding by your family members as to how your financial affairs should be handled while you are incapacitated. Furthermore, while your spouse, adult children or friend may be able to take care of some of your financial matters, there undoubtedly would be transactions that no one other than you would legally be able to complete. Without a durable power of attorney the court would end up intervening and appointing a conservator, also referred to as an adult guardian, to make financial decisions for you. In general, a court will seek to appoint a family member to act as your conservator. In fact, the court my end up appointing the same person you would have named as your attorney-in-fact. However, the process to appoint a conservator may take some time. Meanwhile, critical financial transactions and decisions may be delayed. In addition, if there is no suitable family member available, the court may appoint a non-relative or a public conservator. The conservator will not be accountable to your family, but will be accountable to and supervised by the court.
The conservatorship would remain in place as long as the court determines that a conservator is needed. If your medical condition improves enough so that you are able to resume taking care of your affairs, the court will end the conservatorship. NY MHY Law § 81.36. Otherwise, conservatorships remain in place until the conservatees pass away.What Else Should be Part of My Estate Plan?
While a durable power of attorney is an important part of your estate plan, it should not be the only component. A durable power of attorney only addresses financial issues in the event that you become incapacitated. You should also have a health care proxy and a living will. A living will is a document in which you state your preferences for medical treatment in the event you are so critically ill that you cannot speak for yourself and you are not likely to recover. In other words, a living will addresses end-of-life medical decisions.
You should also have a will. A will is an estate planning tool that most people are familiar with. It allows you to leave property to your loved ones after you pass away. You can leave gifts of cash, stocks, bonds, real property, jewelry, and collectibles to those you care about. You can also indicate in your will who will serve as the guardian for minor children who survive you. With a will you can even make sure that your pets are cared for after you pass away.
A trust is in some ways similar to a will in that it can also be used to leave your loved ones property after you pass away. Trusts have some advantages over a will. For example, trusts allow you to give gifts during your lifetime. At the same time, if you chose to you can retain control over the assets you give away. Also, trusts can be designed to protect your assets from future creditors. This type of trust can be important if one day you must move to an assisted living facility or nursing home and do not want to use all of your assets to pay for it. In addition, a trust is different from a will in that a trust is not subject to probate, resulting in a quicker distribution of assets to your beneficiaries.
You may need other additional documents in your estate plan depending on your goals, your family's needs, and the size of your estate. A well thought out plan and properly drafted and executed estate plan documents will ensure that you meet your personal and financial goals for you and your family.
As you consider how to plan for your future and the possibility that at some point you may need someone to handle your financial affairs for you, it is important to consult with someone with experience who understands the legal issues related to durable powers of attorney. To learn more about the advantages of a durable power of attorney as well as other estate planning tools, contact Stephen Bilkis & Associates, PLLC. We will help you develop an overall estate plan that reflects your individual goals. Contact us at 1.800.NY.NY.LAW (1.800.696.9529) to schedule a free, no obligation consultation regarding your estate plan. We serve individuals throughout the following locations: