New York residents are allowed to give another person the power to make decisions on their behalf. A language contained in a power of attorney can be as narrow or as broad as the principal wants it to be. For instance, an agent may only be allowed to make monthly mortgage payments as opposed to making all financial decisions. An agent may be allowed to exercise his or her powers right away or at some predetermined point in the future.
With a durable power of attorney, the agent is allowed to exercise the powers immediately and until the terms of the document are changed. Individuals who create springing power of attorney documents specify when their agents are allowed to act on their behalf. Generally, an agent’s powers spring into effect when the principal becomes incapacitated. It is important that the document specifically states what it means to be incapacitated and the protocols that must be taken to determine that a person is not of sound mind.
Typically, one or two medical professionals will have to sign a document saying a person is mentally incapacitated. It is important to point out that banks or other financial institutions may still refuse to acknowledge an agent’s power even if this occurs.
Creating a power of attorney is one of many possible estate planning steps a person may need to take. It may also be a good idea to create a will, trust and an advance medical directive. Estate plans will ideally be reviewed at least once a year or whenever a significant life event such as a birth, death or marriage takes place, and an attorney can be helpful in this regard.