Most people have heard of the term “Power of Attorney” used in courtroom dramas, but aren’t fully aware of what the phrase means. Power of Attorney is a legal device used to grant and recognize the authority of another individual in the stead of another.

What is a Power of Attorney Used For?

The Agent, the individual given Power of Attorney, has the ability to make financial, property, or other legal decisions for the person they are representing. The person granting this power to the agent is referred to as the Principal. The Principal can give their Agent very broad or narrow authority, depending on the needs of the individual. Power of Attorney is often employed to offer representation in the event that the Principal becomes ill or disabled; or in cases where the Principal cannot be in attendance to sign legal documents.
Common tasks of an Agent include property management, buying/selling real estate, banking transactions, making legal claims, conducting litigation, filing taxes, retirement affairs, making gifts/donations on your behalf, and managing investments.

Can a Power of Attorney Cover Medical Decisions?

In New York State, the Power of Attorney is not the same as a Health Care Proxy. While an individual may name someone as both, they will need to establish them as such separately. It is very common for a spouse or child to act as both an Agent and a Health Care Proxy.

Types of Power of Attorney

Under the most recent revisions to the New York General Obligations Law as they relate to Power of Attorney documents, there are no longer non-durable and springing Power of Attorney documents.
A Power of Attorney can have very limited powers or very expansive powers. The document must now be signed by the agent in the presence of a notary.
The Standard Power of Attorney limits gifts to $500.00. In order for the agent to make gifts in excess of $500.00, a statutory gifts rider (SGR) must be part of the Power of Attorney document. This SGR must be signed by the Principal in the presence of two witnesses.

Selecting an Agent

Choosing an agent is an important task. You should choose a close and trusted family member, friend, or professional with a reputation for honesty. You should not grant Power of Attorney to someone that you do not fully trust. You should be confident that they will have your best interests at heart.
You can appoint more than one Agent. When assigning multiple Agents, you must decide whether they can act separately, or if they must act together in your affairs. This is commonly used by parents to grant all or some of their children a say in their affairs. However, when multiple agents have to agree on something, it may delay the process or bring it to inaction.

Can I Still Make My Own Legal/Financial Decisions?

Appointing someone Power of Attorney does not negate your ability to make financial or legal decisions. They are your representative, not your boss. As long as you have the legal capacity to make decisions, you can direct your agent to act as you wish.

For more than 40 years, our firm has been assisting people like you with long term care and estate planning needs. We bring you the knowledge and resources to protect you and your family. Armstrong & Lamberti, PLLC does not provide tax, legal, or accounting advice by articles. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Call 718.477.7700 or contact us online to schedule a free initial consultation with an estate planning attorney at Armstrong & Lamberti, PLLC. We proudly serve Staten Island, Brooklyn and the other boroughs of New York City.