POA estate deed validations and denials in NY surrogate court have been an issue of concern in estate planning. Imagine your drafted POA being denied! It is so costly and disheartening. Well, NY surrogate court rules governing validation of P.O.A changed in Mid-December 2020 then started to operate on 13th, June 2021. These changes were effectuated by the high number of denied POAs following the past rules that were somewhat too harsh for the validation of the estate planning tool. New P.O.A rules have eased this harshness by altering the previous rules in some way, therefore, leading to more ready acceptance and validation of P.O.A currently. The reviewed laws do not only affect a POA but also your statutory gift rider (SGR). Among the revisions on the P.O.A rules are; significant compliance level, Separation of SGR, imposing fines upon denial of a valid POA, and protection of the third party in good faith.
About Reviewed Rules and Acceptance of P.O.A
Significant Compliance Level
This rule reduces the harshness of the previous rule which required the P.O.A deed to adhere strictly to the statutes. In other words, the previous rules demanded the P.O.A to be matching line after line and character after character with the statutes. This led to many P.O.A being invalidated for irrelevant errors like punctuation mistakes, spelling errors, formatting errors, etc.
The revised version of the previous rules of strict adherence to the statutes only requires your POA to comply with the statutes to a significant level. This has saved many P.O.A from being denied by the NY surrogate court because of insignificant mistakes hence leading to more ready acceptance of the P.O.As.
Separation of SGR
In a usual sense, the P.O.A estate deed is composed of two sections; statutory-short-form P.O.A, and the SGR. Due to fraud and misuse of powers witnessed, the current P.O.A law makes it possible for a grantor to permit gifts on the very P.O.A deed. The new law allows a grantor to make gifts over $5000 in a year and also gift themselves. Eradication of confusion between SSF-POA and SGR has led to more validation of POAs.
Imposing fines upon denial of a valid P.O.A
The previous rules provided ineffective consequences upon institutions denying a valid P.O.A for irrelevant reasons. Due to this, financial firms unreasonably denied statutory procedures then demand their own P.O.A. The new rules presume the validity of a P.O.A. Therefore, it provides for fines upon denial of a valid POA. This consequence makes it difficult to deny a valid P.O.A hence more validation.
protection of a third party acting in good faith
The new P.O.A rules provide protections for third parties in a POA agreement under the Uniform P.O.A Law provision. The third party that acknowledges the P.O.A in good faith is protected in case it’s rendered invalid later. However, conditions for protection are; Approved and verified signature of the grantor, the third party must not have real knowledge of the mistakes.
NY surrogate court P.O.A rule changes has minimized the invalidation of P.O.A for insignificant reasons in various ways among the ones explained. Therefore, more validation or acceptance of P.O.A is witnessed currently. This is a significant move in ensuring you have confidence in this estate planning tool.
What does SGR mean?
SGR (statutory gift rider) was a part of P.O.A but currently operates as a separate deed that gives an agent authority to make gifts of the grantor’s assets.
Is updating a P.O.A necessary?
Revisiting your P.O.A over time is crucial for making it be up to date for acceptance and compliance with the NY surrogate court rules.
What are the ways to update my P.O.A?
When you need to make changes in P.O.A, consider revoking your current P.O.A deed first. This can be done with the help of a revocation P.O.A deed then simply drafting a new P.O.A deed that incorporates the changes you need. This way, you would have updated the P.O.A.
Do I need witnesses for my P.O.A agreement?
According to the new surrogate court rules in NY, at least two witnesses must be present upon execution of the Powers of attorney. These two witnesses mustn’t be named as agents in the P.O.A or an allowed gift recipient whatsoever.
Where do I get the P.O.A form?
For the POA form and help in filling the same, reach to our estate planning law firm near you in NY. Our free attorney consultation enables you to ask any questions on estate planning matters and more.