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Written by Melissa Aristizabal

We sprang forward into spring on March 8th but have been diligently cooped up #stayhome dreaming of brighter days to come. Planning for the future (well, further out than this public health crisis, of course) often includes having a plan in place so that another person — someone you trust – may legally act on your behalf. This is especially important if you’re unable to do so. This grant of legal rights is known as a Power of Attorney (POA).

A POA is a legal document that, under New York law, allows you, the ”Principal,” to appoint an another individual as your “Agent” to act and make legal decisions on your behalf. The authority granted to the Agent can cover multiple areas or can be narrowed to one such as real estate transactions. You, the Principal decides this agency scope.

So when can the Agent begin acting on your behalf? Either immediately or on the happening of a specific event or date. Simple enough, right? Not so fast. This determination can have drastic consequences.

Durable Power of Attorney. A durable POA is one that grants rights immediately to the agent which will survive even if the principal becomes incapacitated—meaning when you no longer have the ability to physically or mentally make legal, financial, or personal decisions for yourself. A Durable POA will last until the principal revokes it or passes away. If the principal decides to revoke a durable POA, the principal must notify any third parties in writing that the agent cannot act on their behalf. So what’s the main issue here? This type of POA is indefinite.

Springing Power of Attorney. On the other hand, a springing POA comes into play when a specific event or a specific date occurs. To create a springing POA, an event or a date must be spelled out in the POA at the time of signing. An issue that arises here is that, if the event never occurs or the Principal loses capacity before the specific date, then the POA is of no use and the Agent cannot act on behalf of the Principal. The Agent cannot act on behalf of the Principal and the Principal does not have the capacity to enter into a new durable POA unless and until the event or date occurs. However, this does not ring true for springing POA’s where the event is in fact a determination of incapacity – then the POA becomes a durable POA.

Worried about abuse of power? New York state law allows you to appoint a watchdog to keep tabs on your Agent. Your monitor can – under Section 5-1509 of the General Obligations Code – request receipts and records of all transactions made by the Agent and on your behalf. The monitor can also request a copy of the POA. This helps to ensure that the Agent is acting with your best interests and within the power given under the POA.

Now, It’s Up to you.

As the Principal, it is ultimately your decision on the type and scope of your POA . Thinking about obtaining a POA? Good. Just be  sure to contact your New York estate planning attorney to help you work out the specifics.

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