New York City Powers of Attorney Lawyer

A power of attorney is an important part of any estate plan. It allows you to delegate authority over your financial matters such as managing and investing your assets to another person referred to as your agent or "attorney-in-fact." While you can give your attorney-in-fact authority to act for you at any time, for estate planning purposes a power of attorney is typically designed to take effect when you as the principal are suffering from health or mental issues. For example, if you become seriously ill and end up in the hospital for an extended period of time, you can give your attorney-in-fact the power to take care of your financial matters so that your bills such as your mortgage do not get behind, your investments stay on course, and your tax returns are filed on time. In the absence of a power of attorney there may be a delay in someone tending to your finances, causing you and your estate to suffer losses. Because a power of attorney is a powerful legal document that can significantly impact your financial health, it is important for you to contact an experienced New York City Powers of Attorney Lawyer to assist you in drafting and executing your financial power of attorney.

Types of powers of attorney

Powers of attorney can be categorized in a number of ways. For example, a power of attorney can be durable, non-durable, or springing. The main difference between a power of attorney that is durable and one that is non-durable is that with a durable power of attorney your attorney-in-fact retains authority even if you become incapacitated. If a power of attorney is not durable, then it terminates when you become incapacitated. This is a significant feature. If you do not have a durable power of attorney in place your finances could fall into a tenuous situation. Under New York law, a power of attorney is automatically durable unless you specifically state that is it not.

A springing power of attorney, also called a conditional power of attorney, is a special type of durable power of attorney that only becomes active in certain circumstances. For example, you can draft your power of attorney so that it goes into effect if your doctor documents that you have become mentally incompetent and can no longer handle your finances. This means that the attorney-in-fact that you name in your power of attorney will have no legal authority to act for you until that "springing" event occurs.

Powers delegated in a power of attorney

With a power of attorney for finances you decide which powers you would like to delegate, including:

  • real estate transactions
  • chattel and goods transactions
  • bond, share and commodity transactions
  • banking transactions
  • business operating transactions
  • insurance transactions
  • military benefits
  • retirement benefits transactions
  • tax matters

In addition, you can give your attorney-in-fact authority to make gifts to your spouse, children and other relatives up to $10,000 per year.

Power of attorney vs. health care proxy

A power of attorney can be executed for finances or for health care. For purposes of estate planning and for purposes of planning for incapacity, in New York the term "power of attorney" usually refers to a power of attorney for finances while a health care proxy is a power of attorney for health care.

With a health care proxy you give your agent the authority to make health care decisions for you in the event that your physician determines that you are mentally incapacitated and unable to make your own medical decisions. Medical and care decisions that you can give your agent the power to address for you include:

  • artificial respiration
  • artificial nutrition and hydration
  • CPR
  • antipsychotic medication
  • electric shock therapy
  • antibiotics
  • surgical procedures
  • dialysis
  • organ transplantation
  • blood transfusions
  • medication

Before your agent can exercise power to cease or refuse a life-sustaining treatment such as CPR or nutrition and hydration, a second physician would have to agree that you are mentally incapacitated and unable to make decisions for yourself.

Executing a Power of Attorney

Under New York law there are certain steps that you must take in order for a power of attorney to be properly executed. The document must be legible. Both you and the person you are nominating to be your attorney-in-fact must sign and date the document. NY GOB Law § 5-1501B.

Terminating or Changing a Power of Attorney

A power of attorney terminates if you pass away, if you become incapacitated (unless it is durable), if you revoke it, on the termination date mentioned in the document, the purpose of the power of attorney is accomplished, or your attorney-in-fact no longer is willing or able to fulfill his or her duties as your attorney-in-fact.

As long as you are mentally competent, you can change your power of attorney at any time. In fact, it is a good idea for you to periodically revisit your power of attorney and make sure it still meets your needs. For example, as time passes you may determine that you want to name a different person as your attorney-in-fact.

Attorney-in-fact vs. executor

Appointing someone as your attorney-in-fact is different from naming someone as your executor. In order to name someone as your executor, you must do so in your will. If you would like the person you name as your attorney-in-fact to also serve as your executor, you must do so by naming that person as your executor. Otherwise, once you pass away, your attorney-in-fact will have no further authority over your estate's financial matters.

Consequence of Not Having a Power of Attorney

The consequence of failing to execute a power of attorney can be significant, particularly if you become mentally incapacitated. If you do not have a durable or springing power of attorney naming an attorney-in-fact and you become incapacitated, then no one will be able to make sure that your finances are taken care of. The result could be that your estate falls into disarray and assets could be diminished. Another consequence of not having a durable power of attorney for finances is that the court may end up getting involved and may appoint a conservator to handle your finances.

As you plan for the possibility that one day you may become mentally incapacitated, in addition to a durable power of attorney for finances and a health are proxy, you may need additional estate planning tools such as a last will and testament, a living will, and a trust. Because these documents are complicated and can have a significant legal and financial impact on your life, it is wise to not attempt to draft and execute a power of attorney, or any estate planning document alone. Each document has specific requirements for proper execution. Failure to properly draft and execute any of these documents could render the document invalid. As a result your wishes may not be followed, and there may be potentially negative ramifications on your finances and health. To learn more about the advantages of a 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:

1.800.NY.NY.LAW (1.800.696.9529)