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What is a power of attorney?

On Behalf of | Jun 6, 2024 | Estate Planning

Choosing people you trust to make decisions on your behalf if you are no longer able to make your own is an essential step in the estate planning process. You may do this by creating powers of attorney (sometimes referred to as POAs).

There are several types of POAs available to New York residents, but most fall under one of two categories: medical or financial.

  • A medical POA or “health care proxy” is used to appoint someone to make healthcare decisions on your behalf if you become incapacitated for health reasons.
  • A financial POA is used to appoint someone to make financial decisions and handle financial transactions on your behalf if you become incapacitated for health reasons. In New York, there are also specific types of financial POAs available (tax, real estate and vehicle).

You must also determine whether you would like your POA to be durable, nondurable, or springing.

  • Durable POA: The agent will maintain his or her power even if you are incapacitated.
  • Nondurable POA: If you become incapacitated, the POA will no longer be in effect.
  • Springing POA: The POA goes into effect if you become incapacitated or if other criteria is met.

It is important that you follow all state requirements to ensure that your POA is valid. In New York, these requirements include the following:

  • When you create your POA, you must be at least 18 years old and have the mental capacity to understand what a POA does.
  • Your POA must include the requisite statutory language.
  • Your POA must be typed or legibly written, signed in front of two uninterested witnesses, and notarized.
  • Your agent must be at least 18 years of age and have the requisite mental capacity.
  • Your agent must sign the POA.

Creating POAs is important to the estate planning process. Having a POA in place can give you peace of mind to know that your affairs will be taken care of even if you are not physically or mentally able to handle them.