In New York, the power of attorney is an important document, to say the least. It has far-reaching consequences which it is why it is crucial to understand the misconceptions about this document.
Generally speaking, my powers of attorney (POAs) that are executed in New York are “durable’, which means that they take effect immediately upon execution (signing) by both the person conferring the power (principal) and the person assuming said responsibility to manage the affairs of the principal (agent). Quite often, people are under the assumption that the power of attorney becomes effective only upon the incapacity of the principal. This assumption does not apply with the standard durable power of attorney. If you read through the document you will note that this important document takes effect immediately upon due and proper execution. The only instance where the power of attorney takes place at a later date occurs when the less frequently used “springing” power of attorney is drafted.
If this should occur the power of attorney takes effect only upon the incapacity of the principal. The reason why I rarely have clients use this type of POA is that in the unfortunate event of “incapacity” of the principal, there may be a disagreement among medical personnel as to whether the principal is truly incapacitated and cannot make important financial/banking/insurance decisions on their own. To avoid the prospect of unnecessary litigation, I recommend the use of the durable power of attorney.
A second common misconception about the durable POA is that it can be used for medical decisions as well. It is important to note that the POA in New York can be utilized for almost every other enumerated power except for advance directives regarding medical care. Instead, a separate Living Will and Health Care Proxy must be executed wherein an individual can state their advanced directives regarding medical care in the instance of incapacity and to confer the power to make medical decisions to somebody (the proxy).
In any event, it is so critical to appoint someone you trust 110% to be either your principal for the POA and/or proxy for the Living Will/Health Care Proxy.