The New Power of Attorney Laws: What Health Care Facilities Need to Know to Avoid Liability

by Senior Associate Dana Walsh Sivak

New York State recently passed legislation simplifying the Power of Attorney (POA) document and its execution.  Every Power of Attorney executed on or after June 13, 2021 must comply with the new rules. The new laws leave health care facilities facing potential exposure when handling resident funds through the use of a POA.

Among the changes to the law governing New York’s Powers of Attorney are: 

• The New York Statutory Power of Attorney Form must be used in order for the POA to be valid. 
•  A typographical error in the Power of Attorney will not invalidate the entire document.
• The Statutory Gifts Rider has been eliminated. In addition, the basic statutory gifting amount has been increased from $500 to $5,000.
• The Power of Attorney requires two witnesses to verify that the principal signed the POA. 
• Banks and other institutions can no longer reject a POA without valid grounds or require their own document. Under the new law, financial institutions must accept or reject a POA within    10 days of submission. If the POA is rejected, the financial institution must provide a valid reason in writing. 
• A financial institution which unreasonably refuses to accept a POA can be sued, and the aggrieved party can be awarded damages and attorney fees.

Health care facilities may be considered “institutions,” particularly when managing residents’ or patients’ funds (such as personal incidental allowance or “PIA” accounts), and are required to comply with these provisions, namely, indicating in writing, within 10 days of presentation of a POA for use at the facility that the facility is rejecting the POA and will be required to provide a valid reason for its rejection.  It is also important to note that a facility cannot “frivolously reject” a Power of Attorney – or else it may cause the facility to incur steep penalties. If a facility has any doubt as to whether a Power of Attorney is valid, the facility should have it reviewed by its attorneys at Cona Elder Law immediately, so that you can ensure the POA complies fully with these laws and your facility is protected.