NY Law Firms Concerned About PoA Changes

Dozens of prominent New York law firms are warning that a new state power-of-attorney statute designed to discourage fraud in elder law and estate planning could create "unnecessary confusion and disruption" in several well-established areas of commercial transactions.

The firms argue in a recently released analysis that the statute's provisions for executing a power of attorney form for elder care purposes do not apply to the creation of valid proxies for the voting of shares of stock held by investors of New York corporations and non-New York corporations.

But they say that misinterpretations could occur if the new law is read "in isolation."

The statute, in the form of amendments to New York General Obligations Law §§5-1501, requires, in part, the use of a longer, more detailed power of attorney forms for those designating relatives or other agents to make decisions about the disposition of their property if the principals are not able to make the decisions themselves.

Advocates of the change said many older people needed more information about the power-of-attorney process and the rights they were potentially signing away to reduce the risks of abuse or fraud in the elder care and financial planning process.

The new form requires notarization of signatures of an agent or agents being designated as having power of attorney.

The short form for designating power of attorney in effect before Sept. 1 did not require notarization.

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N.Y. Law Firms Sound Alarm About Power-of-Attorney Changes