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August 15, 2010

STATE BAR COMMENDS GOVERNOR PATERSON AND THE LEGISLATURE FOR HEEDING CONCERNS RAISED BY ITS POWER OF ATTORNEY TASK FORCE

Governor Signs New Legislation to Correct Problems With Power of Attorney Law 

New York State Bar Association President Stephen P. Younger of New York (Patterson Belknap Webb & Tyler LLP) today commended Governor Paterson for signing into law a measure that corrects unintended problems created by New York's Power of Attorney (POA) Statute that went into effect on September 1, 2009. Most significantly, the new law (A.8392-C/S.7288-A) eliminates a provision that created a presumption that POAs executed after September 1, 2009 invalidated all previous existing powers of attorney. A "power of attorney" is a document that an individual signs to give another person - an "agent," usually a relative or trusted friend - the legal authority to handle financial matters on his or her behalf. 

"Every day, citizens use powers of attorney to purchase property, enter into contracts, and oversee the accounts of elderly family members. The State Bar was deeply concerned that the 2009 changes to the Power of Attorney Statute had unintended and harmful financial and life consequences," said President Younger. "Although there are still further improvements that need to be made, these 2010 amendments address many of the problems identified by the State Bar POA Working Group in 2009."

He continued, "The State Bar is particularly gratified that the presumption that a newly executed POA revokes all prior existing POAs was eliminated. On behalf of the State Bar, I commend the Governor and the legislature for listening to our concerns. I also want congratulate State Bar Past President, Kate Madigan of Binghamton (Levene Gouldin & Thompson, LLP), and our Power of Attorney Working Group for successfully working with legislative leaders to craft these amendments to the 2009 law."

The technical amendments bill signed by the Governor also excludes from the 2009 statute a host of business, commercial and real estate transactions that are not considered customary for estate and financial planning "powers of attorney."

The State Bar had also raised concerns about the 2009 requirement that created a simultaneous "Statutory Major Gifts Rider." While that onerous requirement remains in the law, as the "Statutory Gifts Rider," a new amendment clarifies that the notary may also serve as one of the witnesses.

For a copy of the Working Group's Report, please visit http://www.nysba.org/POAReport. For a copy of the State Bar's Memorandum in Support for this legislation, please visit http://www.nysba.org/POALegislativeMemo.

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Founded in 1876, the 77,000-member New York State Bar Association is the official statewide organization of lawyers in New York and the largest voluntary state bar association in the nation. The State Bar's programs and activities have continuously served the public and improved the justice system for more than 130 years. For more information, visit us at our Web site at www.nysba.org.