U.S. Tax Attorney

Viacheslav Kutuzov, Esq.

NEW YORK
POWER of ATTORNEY

A Power of Attorney (PoA) is arguably the most powerful non-testamentary document in an individual's estate plan, allowing a trusted person to manage finances and legal affairs during the principal's lifetime. Governed by Article 5, Title 15 of New York’s General Obligations Law (GOB), this instrument is a cornerstone of modern financial planning.

The document is executed by the Principal, who grants authority to an Agent (or attorney-in-fact) to act on their behalf. This authority is immense; the Agent is empowered to spend the Principal's money and manage their property, though the Principal does not lose their own authority to act. The Agent is held to a fiduciary relationship, requiring them to act in the Principal’s best interest and according to any specific instructions provided.

Navigating the Types of Powers of Attorney

New York Power of Attorney Law.pdf

In New York, the Power of Attorney generally falls into two categories: the standardized Statutory Short Form and custom-drafted documents.

The Statutory Short Form Power of Attorney is New York’s state-approved, standardized document, created to promote ease of use and institutional acceptance. For a document to be valid under this statute, its wording must substantially conform to the language set forth in the General Obligations Law. This "substantially conforms" standard was a key legislative change in 2021, replacing the prior, more restrictive "exact wording" rule.

By selecting powers from a statutory checklist (e.g., banking, real estate, legal claims), the Principal grants the Agent broad, defined authority over those selected areas. Critically, this form is durable by default, meaning the Agent's authority continues even if the Principal becomes incapacitated, unless the modifications section of the form explicitly states otherwise.

Custom-Drafted Powers of Attorney (General and Special). A custom Power of Attorney is drafted by an attorney to fit the Principal’s unique needs. These are often categorized by the scope of authority they grant:

General Power of Attorney: Grants the Agent sweeping, broad authority to act for the Principal in virtually all financial, legal, and business matters.
Special (Limited) Power of Attorney: Restricts the Agent's authority to a specific, limited task, such as selling a single piece of property or handling a specific tax return. Authority often expires upon the completion of that task or on a specified date.

The Crucial Differences. The primary difference lies in standardization and enforceability. The Statutory Short Form provides a uniform document backed by powerful statutory enforcement mechanisms. Third parties, such as banks and title companies, are generally required to accept a validly executed Statutory Short Form, and new law provisions allow for the recovery of damages and attorney fees if a third party unreasonably refuses it. Custom-drafted POAs, while flexible, do not carry the same statutory obligation of acceptance and may face greater scrutiny from financial institutions.

Formalities of Execution and the Witness Requirement

for Power of Attorney, executed after June 13, 2021

To be legally valid in New York, a Power of Attorney must adhere to strict execution formalities. These requirements apply primarily to documents intended for general financial and estate planning purposes, which are governed by GOB, Article 5, Title 15. A single Power of Attorney document cannot be executed by multiple Principals; however, one Principal is legally permitted to appoint several Agents within that single document.

Mandatory Statutory Language for All GOB Title 15 Powers of Attorney: for a Power of Attorney to be valid under New York General Obligations Law (GOB) Title 15 – which covers the Statutory Short Form, as well as custom-drafted General and Special Powers of Attorney used for consumer purposes – the document must satisfy all execution formalities and substantially conform to the wording of two critical informational clauses. This mandatory inclusion applies to a statutory short form power of attorney, or a non-statutory power of attorney, provided it is not one of the commercial or business-specific powers excluded by GOB § 5-1501C.

The document must include the mandatory language of:

The "Caution to the Principal" (GOL § 5-1513(1)(a)): This section serves to inform the Principal that they are granting the Agent authority to spend their money and manage property during their lifetime, and that the Principal does not lose their own authority to act.
The "Important Information for the Agent" (GOL § 5-1513(1)(n)): This section outlines the Agent’s strict fiduciary responsibilities, including the duty to act in the Principal's best interest, the requirement to keep records, and the necessary step of the Agent signing the Power of Attorney before a notary public before exercising any authority.

The compliance standard, established by GOB § 5-1501B(1)(d), dictates that these clauses must be included to validate the instrument and ensure all parties are properly advised of their roles and risks.

Legibility requirement: the power of attorney must be typed or printed using letters which are legible or of clear type no less than twelve point in size, or, if in writing, a reasonable equivalent thereof. GOB § 5-1501B(1).

Principal's Signature and Acknowledgment: the Principal must sign and date the Power of Attorney. This signature must be acknowledged before a Notary Public. The law also permits the document to be signed by another person at the direction of the Principal.

The Two-Witness Mandate: following major legislative changes effective June 13, 2021, all Powers of Attorney intended for consumer and estate planning use (including General, Special, and Statutory Short Form PoAs) must be attested to by two witnesses. These witnesses must not be named as agents or successor agents in the instrument, and one of the two witnesses may also serve as the Notary Public. The law does not require the Principal to sign the power of attorney in the presence of the witnesses; instead, it only mandates that the Principal must affirm their signature (acknowledge it) to the witnesses.

The Agent's Acknowledgment: the Agent is not required to sign the document at the same time as the Principal. However, the Agent cannot legally act on the Principal's behalf until after they have signed the Power of Attorney before a Notary Public, acknowledging their legal responsibilities to the Principal.

Electronic signature and Remote notarization are not allowed: Executive Law § 135-c(a)(1)(i) permits Remote Online Notarization (RON) only if the relevant document "may be signed with an electronic signature under applicable law." Because Technology Law § 307 explicitly excludes Powers of Attorney (POA) from documents that can be electronically signed, RON cannot be applied to their notarization. This consequently upholds the traditional requirement for a wet signature and the physical presence of the notary and witnesses, as mandated by the General Obligations Law § 5-1501B.

Exclusions from the formalities for specific powers: the portion of the New York General Obligations Law (GOB § 5-1501C) that excludes certain types of Powers of Attorney from the execution formalities of Title 15 (such as the two-witness rule and mandatory cautionary language) is extensive, as these powers are typically commercial or specialized. The excluded powers are those given primarily for a business or commercial purpose (including a power coupled with an interest, a power for the benefit of a creditor, or a power to facilitate the transfer of specific stocks or other assets), a proxy or delegation for voting or management rights concerning an entity, a power created on a government-prescribed form for a governmental purpose, a power authorizing a third party to file a document with a government or other third party, a power authorizing a financial institution or employee to take internal account action, a power given by an individual in their capacity as an officer, director, partner, or manager of a commercial entity, a power contained within a partnership, operating, or trust agreement governing internal entity affairs, a power given to a condominium managing agent for unit operation, a power given to a licensed real estate broker for a listing, a power authorizing the acceptance of service of process, and a power created pursuant to another state or federal statute, such as a power to make health care decisions or decisions involving the disposition of remains.

Agent’s Fiduciary Duties and Responsibilities

An agent who accepts authority under a New York Power of Attorney (POA) undertakes a fiduciary relationship with the principal, obligating the agent to act with loyalty, care, and good faith. Under New York General Obligations Law § 5-1511 and related statutory provisions, an agent must act within the scope of authority conferred by the POA, prioritize the principal’s interests, and avoid any self-dealing or conflicts of interest. These duties are continuous and enforceable for the duration of the POA.

The agent is required to manage the principal’s affairs prudently and in accordance with the terms of the instrument. This includes maintaining accurate records of all transactions, retaining receipts, and documenting financial and legal decisions to ensure accountability. Proper recordkeeping is not merely procedural; it serves as evidence that the agent has fulfilled their fiduciary obligations and protects against claims of mismanagement.

New York law recognizes that an agent exceeding their authority or acting in bad faith may be subject to civil liability, removal by the court, or, in certain cases, criminal penalties. Even in the absence of malfeasance, agents are expected to exercise reasonable diligence and to communicate material actions to the principal when competent, or to co-agents or the court when necessary.

In sum, the role of an agent is not discretionary or administrative; it is a legally enforceable stewardship requiring fidelity, transparency, and adherence to the principal’s best interests. Fiduciary accountability under NY GOL § 5-1511 reinforces the principle that agents are custodians of the principal’s trust and assets, and any breach of these duties carries significant legal consequences.

Revocation and Termination

New York law does not mandate a fixed expiration date for a power of attorney. As a default provision, a Power of Attorney is valid during the Principal's lifetime and may be fully revoked anytime, provided the Principal retains capacity ("sound mind") at the moment of revocation.

Revocation: the Principal may revoke the Power of Attorney at any time for any reason. The most prudent way to revoke is by providing written notice of the revocation to the Agent(s) and to any third parties who may be relying on the document (such as financial institutions).

Irrevocable Power of Attorney: based on the New York General Obligations Law (GOB § 5-1511), a Power of Attorney intended for general financial and estate planning purposes cannot be made legally irrevocable by the principal. The statute explicitly maintains the principal's right to terminate the document at any time, for any reason, by delivering a signed, dated revocation notice to the agent, provided the principal is of sound mind. While the concept of a Power of Attorney "coupled with an interest" remains a common law exception and is specifically excluded from GOB Title 15's execution rules, for the standard consumer-facing POAs, the principal's statutory right to revoke supersedes any language within the document that attempts to claim irrevocability.

The termination of a Power of Attorney (PoA) is a multi-faceted legal event governed comprehensively by New York Consolidated Laws, General Obligations Law - GOB § 5-1511. A PoA ceases to be effective when one of the following events occurs:

1. Automatic Termination of the Power of Attorney

The Power of Attorney itself terminates upon these events, ending all authority for all agents:

Death of the Principal (1)(a): This is the ultimate and absolute terminating event. All powers cease immediately upon the principal's death.
Non-Durable Incapacity (1)(b): If the document is a non-durable Power of Attorney, it terminates automatically if the principal becomes incapacitated. Conversely, the Statutory Short Form PoA is durable by default, meaning the principal's incapacity does not terminate the document; it is designed to survive incapacity and ensure management continuity.
Accomplishment of Purpose (1)(g): If the Power of Attorney was a Special (Limited) PoA granted for a single, specific task, the authority terminates once that task is fully accomplished.
Court Order (1)(h): A court can revoke the PoA, typically through a proceeding under GOB § 5-1510 or a guardianship proceeding under Mental Hygiene Law § 81.29, if the Agent is found to have acted improperly or if the document is otherwise invalid.
Principal's Revocation (1)(c): The principal's act of revocation terminates the entire instrument (see Revocation below).

2. Termination of an Agent's Authority

While the entire Power of Attorney may remain in force, an individual Agent’s authority terminates under these specific circumstances (which typically triggers the authority of any named Co-Agent or Successor Agent):

Agent's Death, Incapacity, or Resignation (1)(e), (2)(b): The Agent's authority ends if they die, become incapacitated, or choose to resign. If no co-agent or successor agent is named, the entire PoA terminates.
Principal's Revocation of Agent (1)(d), (2)(a): The principal can revoke the authority of a specific agent without revoking the entire PoA if co-agents or successor agents are available to serve.
Termination of Marriage (2)(c): An Agent's authority is automatically revoked if their marriage to the principal is terminated by divorce or annulment, unless the Power of Attorney expressly provides that the authority continues despite the divorce. This authority is revived if the principal remarries the former spouse.

3. Revocation by the Principal (The Act of Termination)

The Principal retains the absolute statutory right to revoke the Power of Attorney at any time, for any reason, provided they have capacity (are of sound mind).

Method of Revocation (3): The principal may revoke the document by delivering a signed and dated revocationto the agent either in person or by mail, courier, electronic transmission, or facsimile.
Agent Compliance: The agent must comply with the principal's revocation even if they believe the principal is incapacitated, unless the principal is subject to a formal court-ordered guardianship under Article 81 of the Mental Hygiene Law.

Termination Notice to Third Parties: termination is only effective against an agent once they receive the notice of revocation (5)(b). Crucially, termination is not effective as to any third party (like a bank) who has not received actual notice of the termination and acts in good faith under the PoA (5)(a). For financial institutions, "actual notice" is deemed to occur only after they have a reasonable opportunity to act on a written notice of revocation received at the appropriate office. For real property transactions, the revocation should also be recorded in the county clerk's office where the PoA was recorded (4).

My services

A properly executed Power of Attorney (POA) is a foundational legal planning instrument. It grants a trusted agent (your Attorney-in-Fact) the immediate or conditional authority to manage your financial, legal, and/or medical affairs. Our services focus on providing robust legal certainty across the entire lifecycle of your POA, from initial drafting to enforcement.

1. Drafting, Execution, and Expertise. We specialize in crafting legally sound POA documents that are customized to your specific needs and fully compliant with state statutes, particularly New York law.

Customized Drafting: We draft the specific instrument required, whether it is a Durable Financial Power of Attorney (for assets and business) or a Health Care Proxy (for medical decisions). We ensure the document precisely defines the scope of authority, prevents inadvertent broad grants of power, and incorporates necessary mechanisms like successor agents.
Seamless Execution: We oversee the signing, witnessing, and notarization process to guarantee the POA is valid, legally binding, and will be accepted without dispute by third parties and institutions.
Legal Expertise: Our advice is informed by deep experience in estate planning and elder law, ensuring your POA integrates smoothly with other documents, such as your Last Will and Testament or Trust agreements, creating a cohesive protective plan.

2. Legal Opinion on POA Validity. When a third party is asked to accept an acknowledged and witnessed Power of Attorney (POA), the New York General Obligations Law (GOL) §5−1504 permits them to request, and subsequently rely upon, the following documentation without the need for further investigation:

1) Agent's Certification: An agent's certification under penalty of perjury regarding any factual matter concerning the principal, agent, or the Power of Attorney.

2) Opinion of Counsel: An opinion of counsel as to any matter of law concerning the Power of Attorney, provided the person making the request offers a reason for the request in a writing or other record.

An opinion of counsel requested under this section must be provided at the principal's expense. This expense shifts away from the principal only if the request is made more than ten business days after the Power of Attorney is presented for acceptance.

The refusal of a request for a certification of facts by the agent or an opinion of counsel (if properly requested) is considered reasonable cause for a third party to refuse to honor the Power of Attorney.

We provide authoritative legal opinions to principals, agents, and financial institutions regarding the validity and interpretation of an existing POA document.

Institutional Acceptance Review: We issue formal legal opinions addressing the proper scope of the agent's authority to act in specific transactions (e.g., selling real estate, accessing a retirement account, or engaging in gifting). This opinion helps financial institutions and title companies overcome internal hesitancy and enforce the POA as intended.
Incapacity Determination: We advise on the proper legal steps required to activate a "springing" POA, which only becomes effective upon your incapacity, often requiring a formal statement from a physician or legal counsel.

3. Enforcement & Damages (Litigation Support). When a dispute arises, we represent the Principal or the Attorney-in-Fact in litigation to enforce the POA or seek redress for its misuse.

Enforcement Actions: We file necessary legal actions to compel a reluctant third party (such as a bank or title company) to accept and honor the agent's authority under the valid POA.
Damages and Recovery: We represent principals or beneficiaries in actions seeking to recover funds or assets where an agent has breached their fiduciary duty, committed fraud, or exceeded the scope of their granted authority. This includes seeking court orders to impose damages and ensure the restoration of misappropriated assets.