New Power of Attorney Legislation Effective September 1, 2009
Governor Paterson has signed legislation extending the effective date for the new Power of Attorney statute from March 1, 2009 to September 1, 2009. This provides an additional six months to learn about the significant amendments to GOL 5-1501, which were summarized in a previous posting.
A Sop For Cerberus
My post dated December 31, 2008, concerned the trust created by Leona Helmsley, specifically, the two page “mission statement” in which she expressed her desire that the trust funds be used for the care and welfare of dogs and “such other charitable activities as the Trustees shall determine.” My previous post discussed the possibility that the mission statement would not be viewed as a legally binding directive.
While Leona may have been steadfast in her commitment to helping man’s best friend, an article in the New York Times dated February 25, 2009, reports that it is now official -- the mission statement is “all bark, no bite.” In an Order dated February 18, 2009, Surrogate Troy K. Webber (of Surrogate’s Court, New York County) confirmed that the trustees can distribute the money as they deem appropriate. Her determination was grounded in the fact that in addition to expressing Ms. Helmsley’s preference for canine causes, the mission statement also gave the trustees discretion in spending the money.
Getting to Know New York's New Power of Attorney Law
Thanks in large part to the efforts of individuals and organizations advocating to curb the epidemic of financial abuse of the elderly, New York Governor, David Paterson, signed into law a broad transformation of Title 15 of the New York General Obligations Law pertaining to Powers of Attorney on January 27, 2009, apparently targeted directly at a reduction in “DPA” or “Durable Power of Attorney Abuse” in New York State.
This new legislation, which was unanimously approved on December 15, 2008 in the senate, is currently scheduled to take effect on March 1, 2009. However, in light of the drastic modifications which this new law portends, many in the legal community are clamoring for a six month reprieve in order to fully digest the implications of this sweeping change. In order to avoid the mass chaos that a retroactive repeal would bring, the new law mercifully provides that these changes do not affect the validity of any power of attorney executed prior to the effective date of this new law. Nevertheless, it is certainly advisable for estate planners and elder law attorneys to familiarize themselves with the new law and incorporate it in into their practice as soon as possible.
Executor Granted Advance Payment Of Commissions Despite Prohibition In Will
There really is no substitute for good old common sense.
In Matter of Goldberg, NYLJ 1/15/09, a recent case emanating from the Surrogate’s Court, Nassau County, the court was called upon to decide a fiduciary’s petition seeking the advance payment of his executor’s commission during the administration of the estate.
The court began its analysis with reference to SCPA 2311, which allows a fiduciary to make an ex parte application for advance payment of commissions during the administration of an estate. The court noted that a petition seeking advance payment must allege that absent such payment, either the fiduciary or the estate would “be deprived of substantial advantages under the income tax laws of the United States or the state of New York or that [the fiduciary would] suffer inconvenience or hardship or that all persons whose rights and interests would be affected by the payment applied for applied for are persons under no legal disability and have by acknowledged instrument consented thereto” (SCPA 2311).
In the case before the court, the petitioner alleged that he desired advance payment of commissions for purposes of income tax planning, and because of the potential income tax savings associated with payments spread out over separate calendar years. Moreover, the petitioner alleged that the federal and state estate tax returns were filed; that he elected to pay a portion of the estate taxes in installments pursuant to Internal Revenue Code section 6166; that the undeferred portion of the estate taxes has been paid; and that all specific bequests under the decedent’s will have been paid. Moreover, all the beneficiaries -- none of whom was under a disability -- consented in writing to the application.
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New Law - Powers of Attorney in New York
Take a look at the new law applicable to powers of attorney in New York. You will have to go to the New York State Legislature search page , type in the bill number (A06421B), select 2008 from the pop-up menu, and check off the box for "Text." The effective date is currently March 1, 2009 - so you have a month to get up to speed!
