Founding Attorney
Are you considering granting someone the power to act on your behalf? If so, it is crucial that you understand the difference between a general vs. durable power of attorney in New York. In this blog, our Staten Island estate planning and real estate attorneys explain the difference and what you need to know about powers of attorney.
What Is a Power of Attorney?
New York state law defines a power of attorney as a document that appoints someone to act on the grantor’s behalf. The “principal” in a power of attorney is the person granting someone the authority to act for them. The “agent” or “attorney-in-fact” is the person receiving the authority.
A power of attorney can appoint an agent to act on your behalf regarding financial matters. Powers of attorney are also used to appoint agents to make medical decisions or act in limited circumstances.
What Is a General Power of Attorney in New York?
State laws determine what a power of attorney must have to be legally enforceable. For example, you must be 18 years of age and of sound mind to sign a power of attorney in New York. Powers of attorney must be in writing, notarized, and witnessed by two people who are not named in the document.
A general power of attorney gives an agent broad powers to act on behalf of the principal. The agent has the authority to handle the principal’s legal and financial matters. They can take any actions the principal could take on their own behalf. Examples include:
- Buying and selling property and real estate
- Opening and closing bank accounts
- Making or changing investments
- Filing a lawsuit and/or settling a lawsuit
- Handling tax matters, including filing tax returns
- Paying bills and withdrawing money
A general power of attorney allows the agent to handle the principal’s affairs, even if the agent becomes incapacitated. Without a general power of attorney, someone would need to go to court to be named as the person’s guardian before they could manage their affairs.
In New York, general powers of attorney are durable powers of attorney unless they specifically state otherwise. This is not true in all states.
What Is a Durable Power of Attorney?
When a power of attorney is “durable,” it means that the principal’s incapacitation does not terminate the POA. In some states, a general power of attorney must specifically state that the power of attorney continues even if the principal becomes incapacitated.
However, in New York, a power of attorney is “not affected by incapacity.” The law states that a power of attorney is durable unless the document expressly provides that the principal’s incapacity terminates the POA. The principal losing the ability to make decisions for themselves does not revoke or terminate the authority of the agent.
Therefore, if you do not want your agent to act on your behalf should you become incapacitated, you must include language in the general power of attorney terminating the authority in the event you become incapacitated.
However, one of the purposes of a general power of attorney is to avoid the necessity of a court-appointed guardian. Instead of the court choosing for you after you are incapacitated, you choose who can act for you should that happen.
Schedule a Consultation with an Estate Planning Attorney in Staten Island, NY & New Brunswick, NJ
At Merlino & Gonzalez, our Staten Island and New Brunswick real estate and estate planning attorneys assist clients with a wide range of matters, including powers of attorney. Contact our office to schedule a meeting with an attorney to discuss your situation. We are here to help you when you need trusted legal counsel.