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July 24, 2013

The Law and You: July 24, 2013

(Continued)

The designation does not give the agent the right to take your property for themselves. By law, the agent must always act in the “best interest” of the principal. The agent must also keep the principal’s property separate from their own and keep a record of all transactions done with the power of attorney. It allows the principal to appoint a “monitor,” with authority to request these records.

A power of attorney becomes effective on the date that the agent signs it. In all powers of attorney signed on or after Sept. 1, 2009, it is clear that the agent can make gifts of only minimal amounts, totaling up to $500 per year.

The principal can choose to grant greater gifting authority to the agent by initialing a special box on the Statutory Short Form Power of Attorney and at the same time signing a Statutory Gifts Rider.

Even with older powers of attorney that allow larger gifts, the agent must still act in the principal’s best interest. The power of attorney does not change the principal’s property into the agent’s. The money and assets still belong to the principal, and that agent must act as a “prudent person dealing with the property of another.” 

Thus, gifts to the agent or others still must be in the best interest of the principal.

NOT TOTAL CONTROL

A power of attorney does not give the agent authority to make health-care decisions. It is only for financial matters. In New York, granting another person the right to make health-care decisions comes under the Health Care Proxy Statute, Public Health Law section 2981.

Having another person’s power of attorney does not make you all-powerful and does not give you total control over that person and their money. You are required to make decisions as if you were the principal, applying the person’s best interests, not your own.

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