What Powers Will the Power of Attorney Grant?

In one of my previous articles, I pointed out the importance of having a Power of Attorney (POA). It’s also important to decide what powers the principal wants to give to the agent in the Power of Attorney.

The standard Power of Attorney form in New York State lists broad categories of powers that a person can grant—but it’s always a good idea to delve more into specifics regarding what the agent will and will not be able to do.

Any changes to the standard POA are done in Section (g) Modifications of the New York Power of Attorney statutory form. If the agent will be given compensation for handling financial affairs, spell out that the agent may be compensated and how the hourly rate of that compensation is determined.

Some of the powers that I like to add to Section (g) include:

• Hiring and compensating attorneys, financial advisors, accountants, brokers, and health care-related individuals, including, but not limited to, nurses, home health aides, and geriatric care managers;
• Entering into a promissory note or annuity contract on behalf of the principal as a means of developing an asset preservation plan;
• Receiving private medical and healthcare information (protected by HIPAA) on the principal’s behalf;
• Signing and filing tax returns;
• Representing the principal in discussions with the Internal Revenue Service, the Social Security Administration, the Veterans Administration, and various New York State agencies;
• Accessing all the principal’s digital assets;
• Taking care of the principal’s pets;
• Making decisions regarding the principal’s domicile or place of residence;
• Serving as guardian of the principal or their property;
• Changing bank accounts;
• Naming beneficiaries; and
• Accessing the principal’s safe deposit box.

An agent never has the power to make and sign a will for the principal.

For any powers involving gifting, attach a Statutory Gifts Rider to the Power of Attorney. Include any related changes under section (b) modifications of the rider. Under section (c) always specify under what circumstances the agents may make gifts to themselves.

The standard regarding gifting should be what is in the principal’s best interest; for example, the gifting could cause a reduction in estate taxes or protect assets against the cost of any future nursing home expenses. Also spell out how trusts should be handled.

Specify the following gifting powers for the agent under Section (b) of the rider:

• Creating, funding, amending, adding to or terminating a revocable or irrevocable inter-vivos trust so that the trustee will have the power to determine the standard for distributions from the trust;
• Making gifts to charities or individuals, as long as such gifts are consistent with a previously established pattern of giving;
• Entering into any life insurance contract or annuity contract with the same powers that the principal would have in dealing with the terms of an existing policy; and
• Creating or contributing to any individual retirement account, pension, or employee benefit plan that the principal owns or has an interest in and taking all actions the principal could, including the power to change beneficiaries.

If you have questions or comments, please contact us today.

Robert W. Shaw, Esq.
(914) 328-1222
E-mail Bob

Tags: Bob Shaw, inter-vivos trust, Power of Attorney